An area located on the southern margin of the Frome Embayment has been acquired to explore for Tertiary roll-front sedimentary uranium deposits. Within the Frome Embayment this style of mineralisation has been sought since 1969, and the Goulds Dam uranium occurrence was discovered in 1973 within the Billeroo Palaeochannel situated further to the east. The probable existence of another similar palaeochannel within the subject area has been known for a long time because limited historical drilling had intersected palaeochannel sediments, however, no serious exploration work has been done there to date. Southern Cross Resources presently holds both EL 2978 Katchiwilleroo and the adjoining EL 2956 Goulds Dam to allow it to fully evaluate the uranium potential of palaeochannel sediments in the southernmost Frome Embayment. The history of basement exploration within the subject area is essentially non-existent, as the indicated depth to reach prospective Willyama Supergroup rocks is in excess of 450 m, due to the presence of both Adelaidean and Cambrian metasedimentary cover sequences. Exploration activities in the first year of tenure of EL 2978 comprised the acquisition during May-June 2002 of a 658 line km airborne EM survey, using the 25Hz Tempest™ system, over the majority of the licence area along east-west flight traverses spaced 1 km apart, using a 120 m mean sensor height above ground. The new AEM data, which appeared to record a coherent response down to about 250 m depth, successfully mapped the Early Tertiary palaeodrainage and highlighted a number of exploration targets. These occur within the ~10 km wide buried braided channel Curnamona palaeodrainage system where inferred geologically controlled heterogeneities in the original channel water flow velocity could have caused an increased accumulation of organic material, thus providing a vital component for the redox trapping mechanism that could later precipitate dissolved uranium from groundwater. Southern Cross Resources' planned further work includes refining the AEM data interpretation by the use of cutting edge new geophysical inversion techniques, collecting more detailed infill gravity data to help define the basement topography, and conducting exploratory rotary drilling and downhole wireline geophysical logging with accurate direct measurement equipment (e.g. the PFN tool), to test and quantify the sedimentary uranium content in palaeochannel targets identified by interpreting the AEM data. At the end of licence Year 1, approximately 34% of the area of EL 2978 was relinquished after it was determined that it probably did not contain prospective palaeochannel sediments. The ground concerned lies in the north and north-west, where it was thought that only blanket very thin sands are likely to occur in the Tertiary sedimentary sequence.