Bluerock sets sights on production

Vancouver — Bluerock Resources( BRD-V, BRDSF-o)knows what it wants: to be the next uranium producer in the North America.

With that goal in mind, the junior has picked up a handful of past-producing mines in Colorado and Utah and is working hard to breathe life back into each one. And the company has already lined up access to a mill, which means production can begin as soon as ore starts coming out of the ground.

Though it is working to restart its mines, the most important development for Bluerock in recent months is a toll milling agreement with Denison Mines (DML-T, DNN-x). The agreement positions Bluerock to become a producer before developing its own mill.

The deal allows Bluerock to deliver 60,000 tons of uranium ore to Denison’s White Mesa mill in southeastern Utah this year, and 100,000 tons of ore in the next two years. Denison will buy the first 25,000 tons of ore each year under its ore purchase program, where the price paid per ton is based solely on uranium grade. Subsequent ore deliveries will be processed under a toll milling agreement whereby Bluerock will pay the direct costs to mill its oreplus a feeper ton ofore, linked to the long-term uranium price.

The program gives Bluerock the potential to generate cash flow and manage the marketing of most of its uranium production without the cost and time required to build a mill.

Bluerock envisions pulling ore from four projects in the Colorado plateau to feed the milling agreement.

The company’s fully permitted J-Bird mine is under development –the first development blast took place in mid-January. The mine plan sees Bluerock initially exploiting a mineralized body some 45 metres from the portal entrance. A 17-hole, 1,230-metre reverse- circulation (RC) drill program late last year confirmed and expanded known mineralization. The best intercept came from hole 12, which returned 2.1 metres grading 0.11% U3O8 from 41 metres down-hole. J-Bird is fully permitted for mining operations.

In early 2007, Bluerock acquired the Tramp mine, another past-producing property in Montrose Cty. In a recent 70-hole drill program, 31 holes were sufficiently anomalous to warrant down-hole gamma logging. Some of the better results included 1 metre grading 0.126% U3O8 in hole 52 and 0.5 metre grading 0.244% U3O8 in hole 54. The drill program confirmed expected grades and widths in the project’s two known zones and identified a third zone within 11 metres of existing underground workings.

Tramp produced uranium-vanadium ore intermittently between 1947 and 1984, with reported grades of 0.28-0.32% U3O8 and 1.5-1.7% V2O5. Bluerock hopes to move the mine back into production this year, making use of the trackless mining mechanisms installed during the mine’s latter years of production.

In the longer term, the company hopes to source ore from the past-producing Sunbeam mine and from its Cone Mountain exploration project.

Farther afield, though still in Utah, Bluerock is also working away at the PSC project, in the Orange Cliffs mining district of south-central Utah. The company recently completed 118 holes for 4,188 metres of RC and diamond drilling. The program targeted shallow Chinle formation structures identified in field mapping. Just over half of the drill holes produced readings warranting third-party gamma probe logging; some 20% of those probed returned intersections grading better than 0.025% U3O8.

Hole 54 returned 1.1 metre grading 0.201% U3O8 from 25 metres depth. Hole 44 cut 1.2 metres grading 0.189% U3O8 from 24 metres. All mineralized intersections came from above 30 metres depth.

The PSC project encompasses two past-producing mines, called the Silver Bell and Andrew Lloyd mines. It is located 150 km from Green River, Utah. Though Bluerock is currently focused on the Uravan district in support of its toll milling agreement with Denison, the company wants to develop uranium resources across the state to support the development of its own milling complex there.

And Bluerock is also exploring in Mongolia, where its project involves seven different land packages. The project, which is a joint venture with Uranerz Energy (URZ-T, URZ-X) with Bluerock as operator, hosts two historic uranium deposits. In the 2006 and 2007 field seasons Bluerock expanded one of the historic deposits and defined two new uranium targets and a coal target.

Bluerock confirmed the presence of uranium mineralization at the historic Khavtsal deposit. Drill holes returned grades ranging from trace to 0.026% U3O8 over 1.9 metres, with five intervals over 0.014% U3O8. Assays from trenching samples returned grades of up to 0.265% U3O8 over 0.75 metre. The results expanded the zone to the south and north.

The Khavtsal drill program also identified coal seams more than 10 metres thick over a 1 by 3-km area. Eighteen of 30 drill holes returned intervals of coal greater than 1 metre. Bluerock notes that since the drill program was designed to identify and measure uranium mineralization, it was not optimal for coal recovery. The company is planning a coal-focused drill program for the near future.

And an airborne radiometric survey on the Uvur Bel project, in the East Tamtsag area of Dornod province, produced three distinct radiometric anomalies, all in the south-central portion of the licence. Two of the circular anomalies are more than 5 km in diameter; the third has a diameter closer to 1 km.

Magnetics data indicates that one of the anomalies is likely related to an intrusive unit, however, the other anomalies have no magnetic correlation and occur within the sedimentary basin. Bluerock plans to follow up with on-the-ground prospecting.