Drawing comparisons to similar types of uranium deposits in Australia and Namibia, Blue Sky Uranium (BSK-V) believes its new grassroots uranium find in the Rio Negro province of Argentina has the potential to be economically attractive at grades less than 0.03% U3O8.
The company has spent the summer and fall proving up the Anit uranium discovery with an aggressive exploration campaign that has included some 5,000 metres in 204 holes of aircore drilling, as well as ongoing surface pitting and trenching.
Sitting at, or very close to surface, the Anit uranium mineralization is hosted in paleo-channels of poorly consolidated sand and gravel. A 2007 airborne radiometric survey over the area first identified a 15-km-long and up to 1.5-km-wide anomaly.
“We got into the area because we saw a regional opportunity, no one had been there, and these style of deposits were prevalent,” Blue Sky’s President Sean Hurd told The Northern Miner. Anit and the nearby Santa Barbara prospect are in the northern portion of the Patagonia region in Argentina’s Rio Negro province. The property has year-round access through a well maintained gravel road, and is in a semi-arid area with low rainfall and a low population density. The area around Anit sits at an elevation of about 200 metres, with small and gently rolling hills.
“The area is so flat you can watch your dog run away for a week,” Hurd jokingly remarked.
The company’s field activities in Argentina are guided by Jorge Berrizo, who has 22 years of in-country experience in uranium exploration and production, including 14 years as a senior uranium geologist with the Argentine government.
During the company’s first ever visit to the Anit area, visible yellow-coloured uranium mineralization was discovered in several rock samples along a freshly-graded gravel road. “We got some good numbers and then started the permitting process,” said Hurd. “In Rio Negro, there had been no-one exploring for uranium so we did a lot of socio-economic activity to get the government on board.”
For descriptive purposes, the 15-km-long airborne radiometric anomaly has been sub-divided into the West, Central and East zones. Blue Sky initially completed 109 hand-dug test pits in the West and Central zones, of which 83 pits encountered uranium and vanadium mineralization along a strike length of at least 6 km. The grade of some 280 samples taken from the 83 pits averaged 0.045% U3O8 across a 1.7-metre interval from surface.
Work on the East zone uncovered sediment-hosted uranium mineralization as well, but the company believes that it occurs at a lower stratigraphic level than the West and Central zones, suggesting the potential for stacked mineralized horizons.
In follow-up mechanized trenching, four trenches totaling over 1,400 metres in length have tested the West and Central zones. The trenches were dug to a depth of about 2 metres and designed to test the lateral continuity of the mineralized paleo-channel defined by the pit sampling.
The first trench was positioned across the centre of the West anomaly, returning 358 metres averaging 0.052% U3O8 and 0.159% V2O5, including a higher-grade 30 metres of 0.397% U3O8 and 1.47% V2O5. Trench 2 tested the interpreted break between the West and Central zones and showed 114 metres of 0.019% U3O8 and 0.082% V2O5. The third trench cut the centre of the Central anomaly and yielded 375 metres averaging 0.04%U3O8 and 0.057% V2O5, including 38 metres running 0.155% U3O8 and 0.092% V2O5.
Blue Sky revisited the area between the West and Central zones, where the radiometric anomaly appears to constrict, and completed a fourth trench perpendicular to trench 2. Trench 4 cut 91 metres along strike grading 0.066% U3O8 and 0.105% V2O5, including a higher-grade 33 metres averaging 0.154% U3O8 and 0.105% V2O5.
In March of this year, Blue Sky began drill testing the 6-km-long horizon with aircore drilling.
Of the 97 holes completed during the first phase, 81 holes returned a weighted average 2.6-metre thickness grading 0.03% U3O8 and 0.075% V2O5. In the thickest intercept drilled to date, hole 85 averaged 10 metres of 0.036% U3O8 and 0.045% V205, including a 6-metre section of 0.056% U3O8 and 0.047% V2O5.
The company has since completed an additional 107 holes in 2,580 metres of drilling that was designed to test for extensions of the Anit West and Central zones. Selected highlights included 4 metres of 0.078% U3O8 and 0.107% V2O5, from the West zone, and 7 metres of 0.037% U3O8 and 0.028% V2O5 in the Central area. The mineralized intercepts start from surface.
The second round of drilling also targeted the East zone and a number of radon gas targets. “We drilled more randomly on the rest of the anomaly,” explained Hurd.
Blue Sky reports that it uncovered large areas of lower-grade mineralization while drilling the East zone. Just 22 of the 81 holes drilled on Anit East and other target areas exceeded a cutoff grade of 0.006% U3O8. Mineralized intercepts ranged from 1 metre of 0.006% U3O8 and 0.08% V2O5 to 4 metres of 0.028% U3O8 and 0.064% V2O5.
Of the eight regional radon targets drilled, only one showed any promise, returning 1 metre of 0.017% U3O8 and 0.08% V2O5 at 8 to 9 metres under cover. This particular target is 1.6 km north of Anit. “So far, the radon gas targets haven’t yielded much,” said Hurd.
Blue Sky believes aircore drilling is a cost effective and fast method of locating mineralization, but doesn`t consider it to be an optimal sampling method. A review of the variation between pit and drill hole sampling results suggests that drilling may have under reported actual U3O8 grades. This preliminary analysis was based upon the assay results from pits dug at 25 drill hole sites that on average yielded significantly higher U3O8 grades than the corresponding drill hole over the same 3-metre interval.
All of the uranium-vanadium mineralization discovered to date at Anit is hosted in a matrix of unconsolidated to loosely consolidated sand, gravels, gypsum and clay sediments, predominantly occurring within 6 metres of surface.
Carnotite, an oxide mineral containing both uranium and vanadium, is hosted unbound in dry loose sands and gravels. Based on the results of the variability review, Blue Sky believes conventional drilling methods are unable to adequately capture all of the fine-grained material so uranium grades are being understated.
“Envision trying to drill on a beach and imagine what your recoveries would be like,” explained Hurd.
In response, the company has established a new sampling protocol whereby exploration will focus on pit and trench sampling for targets less than 6 metres in depth. “We are relying heavily now on backhoe,” said Hurd. “The sample quality that we get from trenching and pitting is much, much better.”
Drilling will still be used to test deeper targets, while the holes will be checked with calibrated gamma probe logging for grade confirmation.
While the unconsolidated nature of the Anit uranium find is posing some sampling issues, it offers the potential for low mining costs as drilling and blasting will likely not be needed and ore crushing should be minimal. “It’s more like a gravel operation,” said Hurd.
Furt
her, since the mineralization is hosted by a fine sand component and non-mineralized gravel comprises a significant percentage by weight, removal of the coarse material by simple sieving, or washing, could significantly increase the grade of the material prior to processing.
Hurd believes their new uranium find is similar in style to deposits found in Namibia and Western Australia. The Langer Heinrich mine in Namibia, owned by Paladin Energy (PDN-T, PDN-A), is expected to produce 3.7 million lbs. uranium oxide in 2010. Located in the Namib Desert, Langer Heinrich is a calcrete-hosted, secondary uranium deposit associated with valley-filled sediments in an extensive paleo-drainage system. It is host to a proven and probable ore reserve of 110 million tonnes grading 0.055% U3O8, equivalent to 134 million lbs. U3O8.
The deposit is comprised of seven contiguous zones over a 15-km length of the paleo-drainage system. Mineralization is near-surface, between 1 and 30 metres thick and ranging from 50 to 1,100 metres wide, depending on the width of the paleo-valley. Uranium occurs as carnotite, deposited as thin films lining cavities and fracture planes, and as grain coatings and disseminations.
French energy giant Areva is bringing the Trekkopje uranium deposit into production in 2012. The Namibian project is expected to produce some 6.6 million lbs. of yellowcake annually over a mine life of at least 12 years. The project is a very large, low-grade, shallow uranium resource that consists of two uranium deposits, Klein Trekkopje and Trekkopje, situated approximately 7 km apart. The Klein Trekkopje deposit is roughly 15 km long and between 1 and 3 km wide, while the Trekkopje deposit is 5.5 km long and of similar width. Both deposits extend to a depth of 30 metres and are covered by a 1-to-2-metre thick layer of overburden.
The broad, shallow deposits are hosted in calcium carbonate cemented (calcrete) conglomerates of Tertiary age. When Areva acquired the project in 2007, measured and indicated resources stood at 335 million tonnes 0.015% U3O8, equivalent to 110 million lbs. uranium oxide.
The big difference between the Namibian deposits and Anit is that they are mostly hard rock hosted. “They are the same kind of system but they are 80% hard rock. They have been consolidated and they have to blast,” explained Hurd. “Anit is unique because it is pure sand and gravel.”
Blue Sky has hired Independent Metallurgical Operations, out of Australia, to carry out beneficiation work and basic metallurgical testing of the Anit mineralization.
“The grade that we have gotten so far on the first 6 km of the target is in the economic range,” said Hurd. “On the other half of the target, the grade is starting to get low and it’s getting down to the Trekkopje level. If Trekkopje can make a go of it and, granted they are huge, what are the implications for us being in this sand-gravel matrix right at surface?”
In the meantime, the company is continuing to define Anit with additional trenching and pit sampling. Hurd notes that work will soon shift to the Santa Barbara prospect, about 60 km away, where the 2007 airborne survey identified three parallel, northeast-trending anomalies of 11 km, 6.5 km and 5 km in length.
“Santa Barbara was the first area that we discovered,” said Hurd. “Anit was just a more obvious target to start from.”
Limited auger hole and pit sampling on the linear features at Santa Barbara have so far revealed thin zones of generally less than 1 metre of anomalous uranium mineralization. The best value of 0.087% U3O8 came from 0.5-metre-wide sample. The company will continue to prospect and sample the large Santa Barbara concession with trenching and drilling as it searches for thicker zones of higher grade.
“In the big picture, we are looking at a regional play where we could set up one processing facility to service satellite deposits,” explained Hurd. “The expectation is that a go/no go decision for production is about 10 million lbs. uranium oxide for this style of environment.”
Blue Sky took to the skies this summer and completed an airborne radiometric survey across more than 20,000 sq. km in the Rio Negro province. The survey targeted areas of similar geology to the Anit and Santa Barbara prospects. Based on the airborne work, the company has applied for new concessions covering 72 sq. km over three new target areas.
With 74.1 million shares outstanding, or 97.7 million on a fully diluted basis, Blue Sky is trading at 25 cents in a 52-week range of 20-94 cents. The junior closed a $2.6-million private placement priced at 25 cents per unit in September. Ross Beaty’s Lumina Capital owns a 15% stake of Blue Sky.
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