Uranium news from Saskatchewan and elsewhere for August 2 to 8, 2014
by Greg Klein
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High grades, wide intervals from neighbours Fission and NexGen
Nearly simultaneous announcements from two adjacent projects once again evoke a sense of wonder about the Athabasca Basin’s southwestern rim. Fission Uranium’s (TSXV:FCU) Patterson Lake South still comes out ahead with an August 7 best result of 12.12% U3O8 over 27 metres. Still, NexGen Energy’s (TSXV:NXE) same-day best of 3.42% over 22.35 metres can hardly be dismissed. Fission also retains the shallower depths. But NexGen’s relatively recent Arrow discovery suggests something big might have spread beyond Fission’s 31,039-hectare property.
First, a look at NexGen.
Two days after announcing the “strongest and shallowest mineralization to date” from Rook 1’s Arrow zone, the company rushed to market with two stock-propelling assays from a single hole. Announced August 7, the results come from AR-14-15, the zone’s 15th hole so far. NexGen released the numbers in a sort of Russian doll formation of intervals within intervals, showing ever-higher grades as the widths contracted:
- 3.42% uranium oxide (U3O8) over 22.35 metres, starting at 564 metres in downhole depth
- (including 10.72% over 6.85 metres)
- (which includes 15.74% over 4.5 metres)
- (which includes 26.1% over 2.6 metres)
- (which includes 55.8% over 0.45 metres)
- 1.52% over 32 metres, starting at 594 metres
- (including 2.98% over 15.85 metres)
- (which includes 10.4% over 3.15 metres)
- (which includes 43.7% over 0.35 metres)
True widths weren’t provided but the hole was sunk at a dip of -70 degrees.
The assays follow an August 5 batch of radiometric readings. Those eight holes, which included AR-14-15, extend Arrow’s strike by 45 metres to about 515 metres in length for a zone that’s up to 180 metres wide and open in all directions. Encouraged by a near 100% hit rate, the company has increased its summer program from 13,500 metres to 18,500 metres of drilling.
These results come from a handheld scintillometer that measures gamma radiation from drill core in counts per second. They’re no substitute for assays.
The zone’s shallowest finding came from hole AR-14-20, which showed a composite of 51.3 metres of mineralization within a 284.45-metre section starting at 118.55 metres in downhole depth. True widths weren’t provided.
The strongest results came from AR-14-15.
Two regional holes totalling 558 metres at Rook 1’s Area K failed to find mineralization. The company now plans regional drilling at Area A on an electromagnetic conductor that NexGen interprets to be PL-3B, which hosts the PLS discovery. Rook 1 has two other conductors as well.
Not including one abandoned hole, the eight Arrow holes bring the zone’s total to 22 so far. Just one failed to find mineralization. Radiometric results have been reported previously for the first six summer holes, while assays have been released for last winter’s eight-hole campaign.
With Arrow clearly the project’s focus, NexGen has changed Rook 1’s protocol for identifying holes. Arrow hole numbers now begin with the letters AR, while regional holes retain the prefix RK.
AR-14-15’s assay came out with remarkable speed. Both NexGen and Fission use the same lab (SRC Geoanalytical Laboratories in Saskatoon). But while Fission is still releasing assays from last winter’s drilling, months after publishing their radiometric results, NexGen somehow released a summer assay just two days after reporting the same hole’s radiometrics.
Fission hits with six holes from winter, 12 from summer
As has been the case for most of last winter’s PLS drilling, the half-dozen holes released August 7 came from the project’s R780E zone, the middle and largest of five zones along a 2.24-kilometre potential strike. Fission’s most outstanding results showed:
- 2.51% U3O8 over 12 metres, starting at 128 metres
- (including 5.6% over 5 metres)
- 12.12% over 27 metres, starting at 149 metres
- (including 26.41% over 12 metres)
- 0.54% over 43 metres, starting at 132.5 metres
- (including 1.54% over 7.5 metres)
- 2.65% over 10 metres, starting at 229 metres
- (including 11.57% over 1.5 metres)
- 0.59% over 35.5 metres, starting at 251.5 metres
- 4.05% over 34 metres, starting at 147.5 metres
- (including 11.37% over 11 metres)
True widths weren’t provided. One additional hole on the R00E zone failed to find significant mineralization. Still to come are assays for another 17 holes from last winter’s 92-hole program.
Like NexGen, Fission’s assays followed radiometric results by two days. And, like NexGen, those measurements expand the size of a zone. Taking advantage of barge-based angle drilling, a new technique first announced the previous week, the crew sunk 12 angled holes into the lake, all of them showing wide mineralization.
Hole PLS14-248 expanded the zone’s eastern half approximately 40 metres south while PLS14-236 showed mineralization about 50 metres north. The usual scintillometer disclaimer applies.
The $12-million, 63-hole summer program continues its progress towards a December resource.
U3O8 Corp Argentinian PEA sees payback in 2.5 years
U3O8 Corp TSX:UWE emphasized low cash costs as the company announced a preliminary economic assessment for its Laguna Salada deposit in Argentina on August 5. The deposit’s characteristics would make it “competitive with low-cost in-situ recovery uranium projects and with high-grade deposits in the Athabasca Basin,” the company stated.
Taking into consideration a vanadium credit and a 3% NSR, cash costs for the 10-year mine life would average $21.62 per pound of uranium. The study estimates even lower initial cash costs of $16.14 a pound as production starts in higher-grade zones, bringing payback in just 2.5 years.
Using U.S. dollars for all figures, the PEA forecast a $134-million capex and used a 7.5% discount rate to calculate a net present value of $55 million and an 18% post-tax internal rate of return. The numbers were based on presumed prices of $60 a pound U3O8 and $5.50 a pound vanadium.
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