Three high grade and near surface sandstone-hosted uranium prospects in Central Sweden are together known as the Kapell project. They are located within fifteen kilometres of each other in the Berg community of the Jämtland province and are held by three 100% owned permit applications which total 4,374 hectares.

The projects were discovered and explored by the Swedish Geological Survey (SGU) in the 1970's during the country's energy self sufficiency program and were more recently held by a third party company. Historic exploration highlights include:

	Åviken	2.65 m @ 1.54% eU3O8 from 21.8 m (drill hole AVI75402)
		2.65 m @ 1.05% eU3O8 from 3.2 m (drill hole AVI75401)
	Sölvbäcktjärn	1.55 m @ 2.38% eU3O8 from 8.35m (drill hole SOL75008)
	Tossåssjön	18 mineralized outcrops over 1.6 km strike length, 392 uranium mineralized boulders, never drilled

click on image to view enlarged

Topographical and Outline of Mawson Permit Area in the Kapell Area

The Kapell projectare held by three 100% owned permit applications which total 4,374 hectares.

The prospects, together known as the Kapell project, are located within fifteen kilometres of each other in the Berg community of the Jämtland province and are held by three 100% owned permit applications which total 4,374 hectares.

Mineralization at the three localities is developed within a sequence of conglomerates and heavy mineral bearing sandstone that form the lowermost stratigraphic units of the Caledonide age "Särve Nappe" suite. A regional scale diabase intrusion (the Ottfjäll diabase) overlies the mineralization. The Särve Nappe rests unconformably upon the allochthonous "Offerdal Nappe", which consists of strongly deformed sedimentary rocks. Uranium occurs in the form of pitchblende. eU3O8 values provided are equivalent uranium oxide values as determined by downhole radiometric logging equipment. Radiometric logging was carried out by the Swedish Geological Survey geophysical staff during 1975, using calibrated probes and protocols of the day. Core intervals will be assayed by Mawson to confirm historic eU3O8 results.

Åviken
The Åviken prospect was discovered in 1973 with the discovery of 401 mineralized boulders in three distinct boulder trains over a 1200 metre by 600 metre area. Mineralization is hosted by a porous sandstone bound by limestone and calcareous shale. Historic work includes detailed boulder tracing, resistivity and IP-surveys. The source of the boulder trains was targeted by 17 percussion holes and 36 diamond drill holes during 1975 and 1976. Eleven diamond drill holes intersected significant mineralization, with better results including 2.65 metres for 1.54% ppm eU3O8 from 21.8 m (drill hole AVI75401) and 2.65 metres for 1.05% ppm eU3O8 from 3.2 m (drill hole AVI75402).

Sölvbäcktjärn
The Sölvbäcktjärn prospect was discovered in 1973 where mineralization is again hosted by porous sandstone. The initial discovery consisted of high grade uranium and copper mineralized boulders. Work by the SGU outlined a boulder train of 57 boulders, which was followed up with radon, IP and resistivity surveys. The radon survey delineated several anomalies which were tested by 216 percussion drill holes (average 22 metres deep) and 15 diamond drill holes. Drilling confirmed widespread, but erratic uranium mineralization controlled by faulting and folding with a best result of 1.55 metres for 2.38% eU3O8 from 8.35m (drill hole SOL75008).

Tossåssjön
The Tossåssjön prospect was discovered by the SGU in 1975 during regional geochemical surveys. Mineralization is hosted by a heavy mineral bearing sandstone and a 0.5 to 2 metre thick conglomerate. Detailed boulder tracing and geological mapping conducted by the SGU discovered 18 mineralized outcrops and 392 mineralized boulders with strong radioactivity. The uranium mineralized outcrops lie over a strike length of 1.8 kilometres whilst mineralized boulders extend over a greater distance. Geochemical assays from five outcrops ranged from 0.13% to 1.39% U3O8 and averaged 0.48% U3O8. The mineralization in both outcrop and boulders is associated with significant Cu and Ag, with assays ranging from 9 ppm to >13,000 ppm Cu and from nil to >100g/t Ag. The Tossåssjön project is yet to be drill tested.

World Nuclear Association Brief on Sweden

Sweden has an estimated 15% of the world's uranium deposits. Ten nuclear power reactors provide approximately 50% of its electricity.

Swedish mining legislation allows exploration for uranium and places no special restriction on mining where the uranium grade is less than 200 ppm or the production is less than 5 kg. When higher uranium grades are present, permitting will follow a process concerning "nuclear technical activity". Such permitting must pass before the Swedish government for decision making.

Sweden has been an enthusiastic supporter of measures to improve world environmental quality. Among many others, Sweden in 1992 committed itself to stabilise carbon dioxide emissions at 1990 levels by 2000, and this was reaffirmed in Berlin in 1995. The fact that those levels in 1990 were only 60% of 1970's was due to nuclear energy replacing most oil for electricity generation.

Both the Energy Commission report and that of an independent economist, W.D.Nordhaus, project that a full nuclear phase-out would increase Sweden's carbon dioxide emissions by about 50% above the 1990 level. This is why European Union proposals for 1997 climate change negotiations allowed for a 5% increase in Sweden's emission levels due simply to the proposed Barsebäck reactor closure.

One problem with closing any reactor is that in the short run the replacement generation or imports would be fossil fuelled. Local back-up capacity is mostly oil-fired, as indicated in the 1996 figures when hydro production was much less than normal.

Sweden has its nuclear waste management well in hand. A dedicated ship moves the wastes from power plants to repositories. Some low-level waste is disposed of at reactor sites, some is incinerated at Studsvik. A final underground repository for intermediate-level waste (SFR) has been operating near Forsmark since 1988. The CLAB interim repository for spent fuel (treated as high level waste) has been operating since 1985 at Oskarshamn, and its 5000 tonne capacity is being expanded to 8000 tonnes to cater for all the fuel from all the present reactors. The spent fuel is stored under water in an underground rock cavern for some 40 years. It will then be encapsulated in copper and stainless steel canisters for final emplacement packed with bentonite clay in a 500 metre deep repository in granite.

The Kapell project offers a new and attractive style of uranium mineralization for Mawson in Sweden and complements the Company's extensive uranium portfolio in Scandinavia. Sandstone hosted systems can form large, good grade and metallurgically amenable orebodies. At Kapell high grade mineralization over 1% U3O8 has been discovered near surface at all three project areas, which lie within 15 kilometres of each other. Further geological mapping, scintillometer surveying and ground magnetics will be undertaken during this summer before drill testing. The prospects remain open in all directions and form high merit exploration targets.