Uranium news from Saskatchewan and elsewhere for March 8 to 14, 2014
by Greg Klein
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Innovation overcomes epic struggle to put Cameco’s Cigar Lake into production
With an ore grade 100 times the world average, Cameco Corp TSX:CCO overcame tremendous challenges to put Cigar Lake into production. Indeed the project’s first ore shipment on March 13 suggests that high grade is the mother of invention.
Among other tribulations, flooding in 2006 and 2008 stalled the eastern Athabasca Basin mine, which dates back to a 1981 discovery and began construction in 2005. Last year’s planned start-up hit another delay with leaks from tanks built to hold the run-of-mine slurry. Around the same time the McClean Lake mill faced delays of its own with modifications to the leaching circuit.
Cameco devised innovative techniques of bulk freezing and jet boring to extract the deposit lying 410 to 450 metres below surface, “where water-saturated Athabasca sandstone meets the underlying basement rocks.”
To prevent flooding, the company freezes the ore and surrounding rock “by circulating a brine solution through freeze holes drilled from both surface and underground.”
To extract the ore, Cameco developed a method of high-pressure water jet boring “after many years of test mining” that keeps operators safely distant from the enormously high-grade deposit.
The company’s targeting 18 million pounds a year at full production, making it the world’s largest high-grade uranium mine after the Cameco/AREVA (70%/30%) McArthur River operation. But even 33 years after Cigar Lake’s discovery, the company anticipates further difficulties: “As we ramp up production, there may be some technical challenges which could affect our production plans.”
As of December 31, Cigar Lake capital expenditures came to $2.6 billion. Over 600 people will staff the mine.
Milling will take place at McClean Lake, 70 kilometres northeast. Operator AREVA Resources Canada says the plant “is expected to produce 770 to 1,100 tonnes of uranium concentrate from Cigar Lake ore in 2014. Its annual production rate will ramp up to 8,100 tonnes as early as 2018.”
Cigar Lake shows proven and probable reserves averaging 18.3% for 216.7 million pounds U3O8. Measured and indicated resources average 2.27% for 2.2 million pounds. The inferred resource averages 12.01% for 98.9 million pounds.
Cigar Lake is a joint venture of Cameco (50.025%), AREVA (37.1%), Idemitsu Canada Resources (7.875%) and TEPCO Resources (5%).
The McClean Lake JV consists of AREVA (70% ), Denison Mines TSX:DML (22.5%) and OURD Canada (7.5%).
Fission Uranium reports Patterson Lake South’s second-best radiometric results, $25-million bought deal
Patterson Lake South’s momentum continued on March 10 as Fission Uranium TSXV:FCU released its third batch of radiometric readings in five days—this time boasting one hole with “the second strongest off-scale results recorded at PLS to date, placing it amongst the best holes drilled in the Athabasca Basin.” The four new holes also continue the winter program’s 100% hit rate and further encourage the company’s quest to connect the six zones along a 1.78-kilometre potential strike.
The most recent star hole is PLS14-164, whose intervals showed a total of 30.08 metres of off-scale readings at 9,999 counts per second, the maximum amount of gamma radiation that the hand-held scintillometer can measure. The readings, taken from drill core, are no substitute for assays, which will follow.
Another hole showed a composite 2.1 metres of off-scale radioactivity. Of the four holes, the mineralized intercept closest to surface started at 56 metres, while the deepest stopped at 380.5 metres.
Oddly enough, Fission Uranium’s March 10 release says one of the new holes “has narrowed the distance between zones R390E and R585E to approximately 60 metres.” That’s the same distance between the same zones reported by the company on March 7.
Already 40 holes have been completed in the $12-million winter campaign that began in mid-January. The company plans about 85 or 90 holes totalling around 30,000 metres on the ice-bound lake before spring. While one rig explores outside the mineralized area, Fission Uranium hopes its four other drills will fill the gaps between the project’s six zones.
Just before the March 10 closing bell Fission Uranium announced a $25-million bought deal. A syndicate of underwriters led by Dundee Securities agreed to buy 15.65 million warrants, exercisable for one share each, at $1.60. The company expects to close the private placement by April 1. The underwriters may buy an additional 15%.
Fission Uranium surpassed its 52-week high March 10, opening three cents above its previous close, reaching $1.71 and then settling on $1.67 when trading was halted at the company’s request minutes before the $25-million announcement.
Trading resumed the following day. The company closed March 14 on $1.59. With 330.12 million shares outstanding, Fission Uranium had a market cap of $524.89 million.
NexGen repeats success with second hole at Rook 1’s new area
With radiometric results from a second hole on Rook 1’s Arrow prospect, NexGen Energy TSXV:NXE repeated last month’s success. On March 13 the company released dozens of tiny intervals ranging from 0.05 to 0.45 metres that showed “significant” readings over 500 counts per second. One intercept of 15.05 metres (not true width) showed almost continuous significant results.
The measurements, which are no substitute for assays, were obtained by scanning drill core with a hand-held radiation detector.
Significant intervals for RK-14-27 started at 224.45 metres in downhole depth and ended at 435.9 metres. Drilling stopped at 576 metres. About a dozen small intervals hit the device’s maximum possible reading of 10,000 cps. Arrow’s mineralization now extends at least 32 metres down dip across two holes, NexGen stated.
Three other holes failed to find significant radiation but “analysis of structures in these holes meant that hole 27 was successfully planned to intersect the interpreted mineralized zones both along strike and down dip.” The company plans to sink RK-14-29 40 metres southwest along strike. Now in progress, RK-14-28 is testing a gravity low roughly 200 metres west of RK-14-27.
The company has two drills working the Arrow area, now the focus of the PLS-adjacent Rook 1 project. A third rig will join by summer.
Fission 3.0 stakes 42,000 additional hectares in and around the Basin
Three acquisitions and one property expansion add nearly 42,000 hectares to Fission 3.0’s (TSXV:FUU) portfolio. Announced March 13, the newly staked properties indicate “there remain many under-explored areas of the Athabasca Basin,” according to COO and chief geologist Ross McElroy.
Not all the new turf actually lies within the Basin. But neither does PLS. The 20,826-hectare Perron Lake property is about 20 kilometres north of the Basin and has benefited from regional lake sediment sampling that showed strong uranium anomalies.
The 9,168-hectare Cree Bay property sits within the northeastern Basin, where historic airborne geophysics suggest potential for hydrothermal and structure-related deposits.
Within the southeastern Basin, the 4,354-hectare Grey Island property is located about 70 kilometres from Key Lake, the world’s largest high-grade uranium mill.
Manitou Falls enlarges by 7,589 hectares to a total of 10,529 hectares. The northeastern Basin property was originally staked last May when the spinco was just a gleam in Fission Uranium’s eye. Historic data shows six radiometric anomalies and multiple basement electromagnetic conductors.
Fission 3.0’s portfolio now numbers nine Saskatchewan and Alberta properties in and around the Basin and one in Peru’s Macusani uranium district.
Purepoint finds new zone at Hook Lake JV
March 10 news from Purepoint Uranium TSXV:PTU heralded a new zone of mineralization at its Hook Lake joint venture five kilometres northeast of PLS. Although two of four holes failed to find mineralization, the other two prompted the company to move its second rig to the new Spitfire zone.
The single interval released from hole HK14-09 showed:
- 0.32% uranium oxide (U3O8) over 6.2 metres, starting at 208.9 metres in downhole depth
- (including 1.1% over 0.5 metres)
Thirty metres northwest, HK14-11 showed:
- 0.11% over 2 metres, starting at 197.9 metres
- 0.05% over 3 metres, starting at 201.9 metres
- 0.57% over 0.9 metres, starting at 210.6 metres
True widths weren’t provided. These holes were drilled at a -70 degree dip.
All four holes targeted the 2.9-kilometre D2 electromagnetic conductor, which features “a large magnetic low, possibly indicative of hydrothermal alteration,” said VP of exploration Scott Frostad. “Now that the D2 conductor has been shown to be associated with uranium mineralization, we will increase our drilling efforts towards the northeast where geophysics suggests there is a more structurally complex setting.”
Purepoint holds a 21% interest in the 28,683-hectare project and acts as operator for partners Cameco (39.5%) and AREVA Resources Canada (39.5%). The work is part of a $2.5-million, 5,000-metre campaign that began in late January.
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