Wednesday 26th October 2016

Resource Clips

Athabasca Basin and beyond

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Ur-Energy boosts uranium resources at Wyoming’s Lost Creek ISR mine

Measured resources increased 16%, indicated decreased 8% and inferred jumped 65% at Ur-Energy’s TSX:URE Lost Creek property in Wyoming. An update to an April 2012 estimate, the November 18 announcement results from exploration and delineation drilling at the mine and its contiguous LC north, south, east and west areas. The program coincided with the installation of in-situ recovery wells for Mine Unit 1, which began operation in August.

Using a 0.02% cutoff, the 16,187-hectare property now shows:

  • measured: 4.29 million short tons averaging 0.057% for 4.85 million pounds uranium oxide-equivalent (eU3O8)

  • indicated: 4.04 million tons averaging 0.048% for 3.8 million pounds

  • inferred: 4.72 million tons averaging 0.051% for 4.74 million pounds
Ur-Energy boosts uranium resources at Wyoming’s Lost Creek ISR mine

Drilling at Lost Creek’s Mine Unit 1 contributed to
a 16% increase in measured resources.

The company attributed the indicated category decrease to resources that were re-categorized within Mine Unit 1 and a planned second mine unit. Some 1,036 holes preceded the installation of MU1 wells, adding 671,655 measured pounds and revealing “that mineralization is thicker, of higher grade and more extensive than previously estimated,” Ur-Energy stated. The 65% expansion to the inferred category came largely from widely spaced drilling at LC East. In addition to 180 exploration and infill holes, LC East had 26 monitor wells installed as part of the permitting process.

Breakdowns for five of the property’s six areas show:

Lost Creek

  • measured: 3.12 million tons averaging 0.058% for 3.59 million pounds eU3O8

  • indicated: 2.35 million tons averaging 0.052% for 2.44 million pounds

  • inferred: 1.84 million tons averaging 0.057% for 2.08 million pounds

LC East

  • measured: 1.17 million tons averaging 0.054% for 1.26 million pounds eU3O8

  • indicated: 1.69 million tons averaging 0.04% for 1.36 million pounds

  • inferred: 1.66 million tons averaging 0.046% for 1.53 million pounds

LC North

  • inferred: 489,100 tons averaging 0.049% for 481,600 pounds eU3O8

LC South

  • inferred: 710,000 tons averaging 0.042% for 602,600 pounds eU3O8

LC West

  • inferred: 17,200 tons averaging 0.11% for 37,400 pounds eU3O8

The company currently plans to process one million pounds from Lost Creek but has a nameplate capacity twice that amount.

In late October Ur-Energy closed a US$34-million Wyoming state loan after having previously borrowed $35 million from RMB Australia Holdings Ltd.

In brief…

European Uranium Resources TSXV:EUU announced the resignation of director Philip Williams on November 18. With six directors left the company doesn’t intend to replace him immediately. Two weeks earlier EUU renegotiated a private placement for $1.25 million. The company is waiting for a decision on its Kuriskova exploration licence in Slovakia.

Paladin Energy TSX:PDN managing director/CEO John Borshoff will stay on until the end of next year, with an option to extend for another year or two, the company announced November 19. Two days later Paladin reported AGM support for all resolutions despite “what I feel has been speculative and sensationalised media reporting” about the money-losing company, chairperson Rick Crabb said. The previous week Paladin released its Q3 report.

Also on November 19, Uracan Resources TSXV:URC announced a private placement of up to 10 million flow-through shares at $0.10 for $1 million and five million non-flow-through units at $0.10 for $500,000. Each non-flow-through unit consists of one share and one-half warrant, with each whole warrant exercisable at $0.15 for a year. Proceeds will go to the company’s Black Lake and Pipewrench Lake projects in Saskatchewan, and for general working capital. As part of its 60% earn-in from UEX Corp TSX:UEX, Uracan plans Black Lake drilling and ground geophysics in early 2014. The company also announced that founding director Clive Johnson, president/CEO of B2Gold TSX:BTO, has been appointed Uracan chairperson. Jeremy Crichton has been named CFO and corporate secretary.

On November 21 Khan Resources CNSX:KRI stated an International Arbitration Tribunal has asked for two post-hearing briefs before making a decision on Mongolia’s expropriation of Khan’s Dornod project in 2009. The first brief is expected to be delivered in January, the other in March.

Noka Resources TSXV:NX announced on November 21 its Frankfurt listing under the symbol 2NK. The company is a partner in the Western Athabasca Syndicate and holds a 100% interest in the Clearwater and Athabasca North property groups.

On November 22 Jet Metal TSX:JET confirmed plans to move to the TSXV by year-end, after having fallen below the TSX minimum market cap. The company hopes to avoid a trade interruption. Jet holds interests in a Labrador uranium-vanadium resource and a Wyoming uranium resource.

Goldman Sachs getting out of uranium trading

Low prices and increased oversight have prompted Goldman Sachs Group to put its uranium trading desk up for sale, media reported on November 22. The story was broken by the energy news website

According to Reuters, “The move comes as other U.S. banks, including JPMorgan Chase & Co and Morgan Stanley, look to exit physical commodity trading in the wake of increased government scrutiny, squeezed trading margins and forecasts for tepid demand in certain markets.”

The news agency added, “Goldman’s two-person uranium desk, which it inherited with the purchase of U.S. utility Constellation Energy’s London-based trading operation in 2009, is among just a half-dozen major traders in the niche physical market for uranium, according to an industry source at a rival firm.”

The insider said that Goldman and other trading firms stockpile uranium in warehouses, including Cameco’s Port Hope facility in Ontario. Citing info from the World Nuclear Association, the news agency said about 80% of uranium is sold through long-term contracts. The rest goes through the spot market.

Other traders include the Japanese firms Marubeni Corp and Itochu Corp, Cameco’s Nukem, Deutsche Bank AG and the North American unit of the metals and mining trading firm Traxys, Reuters stated.

Namibian drought threatens Paladin, Rio, Guangdong mines

Uranium producers in Namibia face water shortages as the country suffers its worst drought in three decades, Bloomberg reported November 19. Neither the national water utility nor AREVA’s desalination plant can supply sufficient water for continued operations. A government spokesperson said the situation could improve by the end of November.

Affected are Paladin’s Langer Heinrich mine, China Guangdong Nuclear Power’s Husab project and Rio Tinto’s NYE:RIO Rossing complex, Bloomberg stated.

See previous uranium news updates:

Read analyst David Talbot’s insights about uranium and the Athabasca Basin in a global context.

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