Ucore eyes Alaskan uranium production

SITE VISIT

KETCHIKAN, ALASKA — Old-time prospector Bob Dotson is anxiously watching the exploration program under way by Ucore Uranium( UCU-V, UURAF-O) on the past-producing Bokan Mountain uranium property, on southeastern Alaska’s Prince of Wales Island. Dotson is optimistic he will see the project return to operation to feed a strong domestic demand for the energy metal.

Ucore, which recently merged with its project partner Landmark Minerals, has seen Bokan propelled to flagship status within its mineral property portfolio — in part due to the high-grade past production and remaining historic resources at the project.

The joint-venture partners inked a deal early last year with the Dotson family and others for rights to the project — consolidating the land package for the first time in over 40 years.

The first order of business was to get a handle on the complex geology at Bokan. Uranium plus significant rare earth element mineralization occurs in an unusual style at the project — hosted within or near a circular Jurassic-aged A-type peralkaline intrusive complex (the Bokan Mountain granite). The body has several concentrically zoned phases of intrusive ranging from sodic granites to porphyries and pegmatites.

“It’s in this peralkaline granite and there’s some old reports that refer to it as a breccia pipe –but there’s no breccia, it’s just a complex system of fractures and veinlets on a pipe-shaped deposit,” explains geologist Harmen Keyser, Ucore’s vice-president of project development.

The intrusive-generated mineralization also imparted intense wall-rock replacement and alteration by albite, chlorite, calcite, fluorite and hematite. Uranium mineralization (uraninite, uranothorite and coffinite) occurs in irregular, structurally controlled pipes, in shear zone-related pods or lenses and in pegmatitic-felsic dykes. Additionally, the rocks host significant concentrations of thorium, niobium, tantalum, beryllium, zirconium, and both light and heavy rare earth elements.

The company believes the pipes could be a degassing structure, but hasn’t been underground yet to investigate and can’t see much at surface.

“The pipe is actually marked by a change in grade more than anything,” Keyser says.

Ucore’s exploration team studied a considerable inventory of past data (both production and exploration oriented) showing more than 35 uranium prospects on the ground — including the historic Ross Adams mine — and compiled targets for follow-up.

From 1958 to 1971, operations on the Ross Adams mine area churned out a total of about 1.3 million lbs. U3O8 from material averaging 0.76% U3O8.

Several operators extracted uranium ore over that period. Climax Molybdenum, enticed by incentives from the U.S. Atomic Energy Commission, is reported to have mined roughly 13,500 tonnes of ore grading about 1% U3O8 in the late 1950s from a small open pit — producing around 315,000 lbs. of yellowcake — before dropping its interest.

The early 1960s saw Bay West pick up the baton, driving a decline (the 700-level) into the wall of the open pit and beneath the mineralized zone. Standard Metals then stepped in, purchasing Bay West’s lease, and produced about 13,500 tonnes of ore yielding roughly 300,000 lbs. U3O8, once processed at a mill in Utah.

In 1968, a division of Newmont Mining(NMC-T, NEM-N) leased the ground from Standard Metals — launching a fairly aggressive two-year exploration effort before driving a second adit (the 318- level) into the orebody. The major mined about 50,000 tonnes of ore that was shipped and processed in Spokane, Wash., yielding 687,000 lbs. U3O8 for a recovered grade of 0.62% U3O8.

On weakening uranium prices, Newmont wound down its operations in 1971, but not until it identified significant expansion potential in the historic resource. It discovered occurrences of vein and shear-hosted uranium mineralization (dubbed the I&L zone) adjacent to the main Ross Adams zone.

A late 1980s study by the U.S. Bureau of Mines assessed strategic mineral resources on nine prospects at Bokan Mountain, calculating a historic resource of roughly 34 million tonnes containing 11.8 million lbs. U3O8 — equating to an average grade of 0.016% U3O8. The historic resource tally also showed considerable amounts of niobium oxide (96 million lbs.), thorium dioxide (28 million lbs.), yttrium oxide (133 million lbs.), zirconium oxide (638 million lbs.), and 241 million lbs. of rare earth elements.

Ucore’s initial 2007 drill campaign targeted the I&L zone as an area where it might delineate some tonnage potential. With nine holes completed on the zone, the junior has cut some significant uranium grades. Some of the company’s core samples saw delays in shipping to the assay lab due to high radioactivity.

The initial hole cut a 33.3-metre interval (from 4.7 metres down-hole) grading 0.57% U3O8 and included high-grade sections of up to 2.43% U3O8 over 3.9 metres.

Hole 2 delivered 3.1 metres of 0.62% U3O8 within a wider 16.8- metre interval grading 0.18% U3O8.

Hole 5, also on the I&L zone, returned 15.2 metres of 0.42% U3O8, including a 5.3-metre section of 0.95% U3O8.

I&L is a system of at least nine narrow and irregular pegmatite dykes with quartz cores that are controlled by fractures and jointing in the country rock. The dyke system is predominantly vertical and strikes, discontinuously, over at least 2.6 km.

Jim McKenzie, Ucore president and CEO, says the company will drill the zone aggressively this year, with infill and stepout holes. Drilling is aimed at testing the extension of the high-grade mineralization at depth and along strike.

Ucore’s drill results from I&L appear to correlate well with those of Newmont’s 1970 drill program on the zone.

Another area that warrants drilling is the downward projection of the mineralized pipe structure around the Ross Adams mine, however, the program would likely require some rehabilitation of underground workings to establish drill stations.

Prospector Dotson claims to have identified the pipe structure in a creek near sea level, well below the past workings.

Additionally, the mineralized envelope around the old mine workings presents a potential target. Unmined mineralization — falling below the reported historic cutoff grade of 0.5% U3O8 — remains as a halo flanking the mined material. One historic report discusses a zone of “fringe ore” with about 1 million contained pounds of yellowcake in material grading 0.27% U3O8.

“If things go according to plan, we hope to be drilling inside the mine (this year),” McKenzie says.

A recent airborne radiometric survey over the property also returned several significant anomalies for investigation.

Looking at a location map for Bokan Mountain — on a sparsely populated, isolated island in southeastern Alaska — one gets the impression that remoteness and infrastructure challenges could be an issue.

But a recent visit to the project dispells some of these concerns. The project is accessed by a short flight on a de Havilland Beaver floatplane from the town of Ketchikan. A floating lodge moored in the western arm of Kendrick Bay

–previously used as a tourist fishing/

outfitting facility — serves as a more than sufficient self-contained exploration camp for Ucore’s current crew. A planned land-based camp will accommodate the anticipated increase in exploration and development staff.

The project enjoys a well-maintained and permitted mine-era road network — courtesy of Newmont’s work 40 years ago, along with later maintenance by Dotson. Vehicles can access the main portions of project, near tidewater and shipping channels. Additionally, the two underground mine haulage levels appear to be in good condition.

This all plays into Ucore’s development plans. With delineation of sufficient high-grade uranium ore in the past workings and at I&L — it envisages a potential direct-shipping sc
enario within three to five years, with no on-site processing necessary.

Ucore says it has had nothing but positive input from the locals for putting a mine into production. The nearby community of Ketchikan, with a population of 18,000, has a largely seasonal economy as a port-of-call in the Alaskan cruise ship industry for roughly three months every summer. About 10 years ago, a pulp and paper mill — a major employer in the town — shut down.

So Dotson and Ucore may not be the only ones eager to see his uranium claims resume production.