While uranium exploration isn’t what it was during its glory years a few decades ago, a high-grade discovery made by
Cameco’s discovery was the result of last year’s drilling program, which encountered uranium mineralization in grades of 8.2%, 19.1% and 29.9% U3O8 in three drill holes about 280 metres below surface.
The mineralization defined by these holes has an apparent strike length of at least 200 metres and is considered to be open along strike in one direction. The geological environment is described as being similar to the McArthur River and Cigar Lake unconformity deposits, also in northern Saskatchewan.
Additional drilling will test the discovery this year, says Cameco President Bernard Michel. “The results are encouraging for Cameco’s long-term commitment to exploration in an industry with lead times as long as 15 years from discovery to production.”
The La Rocque Lake claims are about 55 km northwest of Cameco’s Rabbit Lake operation, and about 750 km north of Saskatoon. The property is part of the Dawn Lake joint venture, owned 57.46% by Cameco, 23.08% by Cogema Resources of France, and 19.44% by PNC Exploration of Japan. Cameco is the operator of the joint venture, which dates back to 1977.
While the claims have been explored intermittently since 1970, previous drilling returned generally disappointing results until the new discovery was made last year. The excitement was triggered by hole 34, which hit 3.6 metres of 8.2% U3O8, hole 40, which returned 7 metres of 29.9% U3O8, and hole 42, which hit 2.5 metres of 19.1% U3O8.
Uranium mineralization in the three high-grade holes is predominantly pitchblende, ranging in style from heavy disseminations to massive vitreous forms. The dominant accessory mineral is chalcopyrite. However, other minerals occur in anomalous concentrations, including nickel, lead, cobalt and vanadium. These associations are not unusual for unconformity deposits, which are typically elongate, horizontal, sausage-shaped bodies.
The high-grade deposits of the Athabasca Basin are typically associated with the erosional boundary, or unconformity, between graphite-bearing metamorphic rocks of early Proterozoic age and middle-Proterozoic sandstones. The list of unconformity deposits includes the deposits at McArthur River, which has reserves totalling 255 million lbs. U3O8 in 668,000 tonnes at an average grade of 17% U3O8, and Cigar Lake, which has reserves of 353 million lbs. U3O8 in 1.2 million tonnes at an average grade of 14% U3O8. Cameco has a stake in both deposits.
McArthur River is known as the largest high-grade uranium deposit in the world. The underground mine began operations late last year. It is owned 70% by Cameco and 30% by Cogema Resources. In addition to the reserves mentioned above, the deposit has resources of 228 million lbs. in 859,000 tonnes at an average grade of 12% U3O8.
Once full production is achieved in 2002, it will produce 18 million lbs. annually. Production this year is expected to exceed 11 million pounds.
Cameco owns 50% of Cigar Lake. Production there is expected to begin next year or early 2002, with most of the ore processed at the Rabbit Lake mill.
Cameco is already the largest uranium producer in the world, operating both the Key Lake and Rabbit Lake uranium mines in the Athabasca Basin. Last year the company reported net earnings of $71 million ($1.24 per share) on revenue of $742 million.
Nuclear products and services account for more than 85% of total revenue, with the remainder coming from gold activities. With gold prices at near-record lows, the company wrote down its gold assets last year, which resulted in a $43 million charge to earnings. About $40 of this total relates to the company’s investment in the Kumtor gold mine in Kyrgyzstan.
Nearby exploration
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JNR assembled its ground with the help of Les Beck, a former regional geologist at La Ronge, who, in the early 1960s, wrote a paper citing the potential of the Athabasca Basin to host major uranium deposits.
“I phoned him up a while ago, after he retired, and asked if maybe we could do something together,” Hoffman says. “I told him I thought another uranium boom was coming and, after he thought about it a bit, he agreed. Now he heads our technical committee and selects all our ground.”
Hoffman said these efforts picked up steam last summer, when Cameco was rumoured to have made a discovery a short distance from one of JNR’s properties.
The junior went to form a “strategic alliance” with Kennecott Canada Exploration, owned by London-based
The partners recently staked four new properties: Lazy Edward Bay; Martin Lake; Cigar South; and Moore Lake. Two of these — Martin Lake and Cigar South — have been deemed “high-priority areas.”
Work has already started at Cigar North, which lies adjacent to Cameco’s La Rocque discovery. A geophysical survey was flown over the westernmost claims to map basement geology, structure and possible extensions of the basement graphite pelites that host the La Rocque mineralization.
JNR says the survey was successful in mapping a series of east-west and northeast-southwest structures that have been interpreted to control mineralization in the Athabasca Basin, and a series of weak basement conductors splaying off the main La Rocque corridor into the company’s claims.
JNR notes that illite-enriched sandstone boulders coincide with these conductors and may indicate a possible indication of a uraniferous hydrothermal system at depth. Line-cutting, followed by ground geophysics, will continue this winter, to be followed by drilling.
“We could be drilling as early as March,” Hoffman says.
Last year, the partners focused their efforts on the Mitchell Lake property. Five holes were drilled to test a geophysical anomaly trending from a known deposit 8 km to the west. While the holes provided important geological information, they did not yield significant results. More work is planned so that this target can be defined further.
Data pertaining to the Lazy Edward property, which was staked late last year, continue to be compiled. This will be followed by ground geophysics and drilling this summer and fall. Based on assessment reports, JNR believes the property is underlain by untested and/or poorly tested basement graphitic conductors.
Vancouver-based Pioneer Metals (PSM-T), another junior with deep roots in Saskatchewan, recently awarded contracts for a $800,000 winter program of geophysics and diamond drilling at its Riou Lake uranium project in the Athabasca Basin.
Most of the work will be carried out on the PM claims — a 6-claim block, covering 14,853 ha, which is currently under option to Cameco. The agreement, signed early last year, allows Cameco to earn a 60% interest by spending $6.5 million on exploration by the end of 2004, including at least $1.3 million in the first two years.
Quantec Consulting will carry out the geophysical program, which will include reconnaissance-style surveys designed to test for the presence of basement conductors and fault structures on the PM claims as well as on the remaining claims owned solely by Pioneer. However, the main goal of the program is to direct followup drilling in the vicinity of two holes that discovered reverse-faulting and graphitic meta-pelites at the unconformity during the winter of 1999.
The 5-hole, 3,500-metre program was awarded to Midwest Drilling. Four holes will test priority geophysical targets southeast of Rio
u Lake, while the fifth will test a pelitic corridor in the basement, which underlies radioactive springs discovered last year.
Pioneer has also joined forces with D.F. Exploration to explore their contiguous properties near Riou Lake. Under the terms of an agreement, signed last fall, Pioneer and D.F. were granted the right to buy a 25% working interest in each other’s projects for five years at a cost of $25 million.
D.F. Exploration is owned 75% by Daniel Faure, a uranium exploration expert who was previously involved in the discovery of the Cigar Lake uranium deposit in the early 1980s. A Paris-based French bank owns the remaining 25% interest in the private exploration company.
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The drill program is being supervised by PNC Exploration, which holds a 4% royalty on the property. A previous hole on the property is reported to have assayed up to 3.5% U3O8 at about 320-350 metres below surface, considerably shallower than the McArthur River and Cigar Lake deposits. The geological setting is described as similar to other deposits in the basin.
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