Paladin enlarges Langer Heinrich (November 09, 2005)

The planned mine at Paladin Resources‘ (PDN-T, PDN-A) Langer Heinrich uranium project in west-central Namibia just got bigger thanks to 11,534 metres worth of reverse-circulation drilling in 245 holes.

The drilling focussed on s of the Detail 2 and Detail 7 areas of a previously untested palaeochannel extending west from the project’s Detail 1 orebody.

Revised measured and indicated resources now stand at 32.3 million tonnes grading 0.07% U₃O₈, for 20,200 contained tonnes. Another 40 million tonnes of inferred material runs 0.06% U₃O₈, for 23,800 contained tonnes. The estimates employ a cutoff grade of 0.025% U₃O₈.

The company says the new measured and indicated resources represent a 24% increase over the previous estimate, while and a 52% increase in inferred resources when compared to the previous estimates made at a 0.03% cutoff.

At the old cutoff of 0.03% revised measured and indicated resources total 26.8 million tonnes of 0.07% uranium oxide, or 18,650 contained tonnes, with inferred resources tipping the scales at 32.3 million tonnes running 0.07%, for 21,600 contained tonnes.

Paladin says it switched to a 0.025% cutoff to comply with the cutoff grade used for reporting proven and probable reserves.

Mineralization is associated with calcrete cemented sediments in a large Tertiary paleo-drainage system. The principle uranium mineral is carnotite, a secondary oxidized uranium-vanadium mineral, which occurs as thin films lining cavities and fracture planes, and as grain coatings and disseminations in calcreted sediments. The deposit covers over 15 km of the paleo-drainage, with localized accumulations, or higher-grade pods. Mineralization is near surface, from 1 to 30 metres thick and covers the 50- to 1,100-metre width of the paleo-valley.

The company also says that resources may be further expanded as the Detail 3-6 areas remain open. Future drilling in these areas is planned. Additional drilling will also aim to convert a “considerable amount” of the inferred resources to measured and indicated.

Plans at the proposed open-pit mine call for annual production of around 1,180 tonnes of ₃O₈ during its first 11 years, slipping to 401 tonnes over a subsequent four years as lower-grade stockpiles are processed. First production is anticipated in the fall of 2006.

Average life-of-mine operating costs are projected at US$14.18 per lb. U₃O₈, and US$12.20 per lb. over the first six years, based on uranium prices ranging from US$26 per lb. to US$35 per lb. over the 15-year lifespan.

Paladin says those plans may change as it expects the new resource to significantly extend the minelife and boost production.

Langer Heinrich is situated located about 40 km south of Rio Tinto‘s (RTP-N) Rossing open-pit uranium mine, which has been in production since 1976. Rossing produced 3,582 tonnes (7.9 million lbs.) of U3O8 in 2004, with 2005 targeted output of about 3,800 tonnes (8.4 million lbs.).

Financing for construction is in place following an oversubscribed placement worth A$77 million (or US$58.1 million). The company also has a US$71-million project loan facility.

Shares in Paladin were 3, or 1.5%, higher at $2 in early afternoon trading in Toronto following the news on Nov. 9. The shares trade in a 52-week range of 86-$2.25.