Universal opens up Lisbon Valley

Site Visit

Moab, Utah — With the resurgence in the price of uranium, Universal Uranium (UUL-V, UULFF-O) is going back to Utah’s famed Lisbon Valley.

While the district was home to 16 uranium mines, producing over 103 million lbs. of U3O8 — and accounting for 82% of all uranium produced in Utah — Universal believes there’s still plenty of ore left in the ground.

While most of the U3O8 mined in the area in the ’50s and ’60s was from the western up-thrown side of a fault line known as the Big Indian Wash, the same geological conditions exist on the down-thrown side, known as Lisbon Valley.

“We occupy an area most professionals in the business were well aware of for thirty to forty years,” says Universal’s senior technical advisor, Mark Steen. “Everybody always hypothesized that there was more uranium across the fault line.”

Steen has an intimate knowledge of the area. His father, Charlie Steen, was responsible for igniting the first uranium boom in the district back in the early ’50s with his discovery of the Mi Vida mine. Mi Vida was so rich in uranium that when it first went into production it accounted for 90% of all U3O8 pulled from the ground in the United States.

But if experts have known for so long that the eastern side of the fault was so prospective, why did it languish in relative inactivity for some forty years?

The reasons are varied, Steen says.

Most importantly, the roughly 200-million-year-old sandstone formation that hosts the uranium — the Chinle formation — lies down in the 2,250-ft. horizon on the eastern side. That was considered too deep back in the ’50s and ’60s, especially with so much U3O8 close to the surface on the western side.

Another factor suppressing exploration was the prospector holding the land — who had little money to drill, but was too stubborn to cut any deals.

Add the collapse of the uranium market, and the result is some of the more prospective land in the area lying relatively unexplored for almost half a century.

Lisbon Valley Renaissance

In the early ’90s, things began to change. The prospector who had faithfully renewed his stakes on the land for some three decades, finally let them lapse, and Mark Steen, ever watchful of the property, pounced.

When uranium climbed to US$11 per lb. from US$7, Steen claimed the stakes; when it went to US$23 from US$14 he brought the project to Universal’s president, Clive Massey; and by the time they signed a deal, the price had reached US$28. Uranium is currently trading in the US$45-per-lb. range.

“The thing to remember,” says Massey from Universal’s head office in downtown Vancouver, “is that Mark could have staked any ground he wanted to.”

Uranium in the district was deposited on either side of a giant anticlinal salt mound which once divided two rivers.

Flooding in Triassic times brought uranium-hosting volcanic ash from higher flatlands to settle on either side of the anticline. That was some 210 million years ago and the activity helped form the Chinle formation — as evidenced by the volcanic ash contained in the upper portion of the Chinle. It’s hypothesized that uranium leached downwards from the ash into the thick sandstone known as the Moss Back member of the Chinle.

Moss Back is the host rock and it is believed the uranium stayed in the rock because of its reducing conditions.

At the site, vice-president of exploration Richard Dorman showed off samples from a recent reverse-circulation (RC) drill program.

Dorman points to the carbon and pyrite that drilling has hit as indicators of the reduction necessary for a uranium deposit to occur.

The presence of carbon and pyrite, Dorman says, indicates that not as much oxidization occurred because the environment was reduced.

Later faulting thrust the eastern portion of the anticline downwards and the western portion upwards.

While the big discoveries in the 1950s on the western side bear the theory out, thus far, only one discovery has been made on the eastern side — Rio Algom’s Lisbon mine, which went into production in 1972.

Universal has completed 12 of 30 planned RC holes in an effort to find a second orebody on the eastern side. Assay results are pending.

In advance of the results, Steen says the drill program did not intersect a second orebody, but that the holes show positive geological conditions. He adds that further drilling will continue to search down the flank of the anticline.

“We have to find the thicker sandstone unit; uranium is not often in the thin sandstone,” says an undeterred Steen. “If dad would have drilled eighteen feet from where he did, he would have altogether missed the orebody that became Mi Vida.”

This is because, unlike many other uranium deposits, orebodies in Lisbon Valley lack a halo of lower-grade U3O8.

With $4.5 million in the kitty, Universal can push ahead with drilling without diluting shares by rushing to the market for funds.

The company currently has a market capitalization of roughly $12 million with just under 32 million shares outstanding.

It also has two other projects that will absorb some of its cash this year: The Artillery Peak property in Arizona and the Labrador Central Mineral Belt joint venture with Nova Scotia-based Silver Spruce Resources (SSE-V, SSEBF-O).

Artillery Peak is composed of 71 claims and stretches over 6.3 sq. km; it lies 88 km northwest of Phoenix, Ariz.

According to Universal, 71 of 200 historical drill holes in the region hit upon strongly mineralized intercepts with an average grade of roughly 0.12% U3O8.

The company is planning a $500,000 program for the area, and will begin drilling in the fall.

Universal’s other project, Labrador Central, will be 60% owned by Universal if it spends $2 million over the next three years, with $1 million being spent this year.

The properties lie along strike and close to properties held by Aurora Energy Resources (AXU-T, AUEGF-O), which recently announced intersections of a number of wide, higher-grade uranium intervals — the best being 59.4 metres (from 442.6 metres down-hole) of 0.18% U3O8, including an 11.4-metre interval averaging 0.25% U3O8.

Universal is in the process of flying airborne radiometric surveys over its 1,240 sq. km of claims.

But Lisbon Valley remains the company’s primary focus, and for Steen, a passion.

A tour through the uranium museum here in Moab — a dusty town that has been run in turn by Mormons, uranium prospectors, and now extreme sports lovers — shows how vital the Steen name has been to the area.

Most of the museum is filled with pictures of Steen’s father, Charlie — from the tar-paper shack he rented for his family while doggedly drilling in the arid hills for uranium, to photos of the hilltop mansion and lavish parties that came after he finally struck pay dirt.

Moab was a town forever changed by Charlie Steen’s unflinching belief that there was uranium in these hills.

Regrettably, Charlie Steen died earlier this year, but if Universal has its way, another Steen will help usher in a new era of prestige for Moab — one fuelled by uranium, again.