As we approach the 40th anniversary of the first major, high-grade uranium discoveries of the 1960s in Saskatchewan’s Athabasca basin, a unique resurgence is taking place.
In the past year, uranium has once again captured investors’ attention as international demand for a clean, reliable source of energy casts the spotlight on nuclear power. As well, growing nuclear-power programs in developing countries such as China and India, combined with worldwide supply shortages, have pushed the spot price of uranium up more than 165% in only 24 months.
But this time around, the rush for uranium is different. A whole new cycle of uranium exploration has begun. New players using new methods are tapping into the world’s best uranium resources.
Situated in northern Saskatchewan and northeastern Alberta, the Athabasca basin hosts the world’s richest source of uranium with average grades up to 21.2% uranium (25% U3O8).
To put this into perspective, the reserve grade at Eldorado Mining and Refining’s Uranium City operation in northwestern Saskatchewan was 0.19% uranium (0.22% U3O8) at the end of 1963. In 1966, when uranium exploration in the basin first began, an average grade of 0.1% U3O8 would have been considered quite respectable.
Early explorers had no idea that high-grade unconformity deposits deep in the basin existed. Traditional exploration methods were used, which involved the identification of mineralized boulders or radiometric anomalies caused by uranium mineralization.
The first major uranium discovery at Rabbit Lake in 1968 was found this way by Gulf Minerals Canada, as were others at Cluff Lake (1969-1980) and Key Lake in 1975. The deposit’s expression on the land surface around the periphery of the Basin resulted in these early finds being termed “easy discoveries” or “easy finds.”
Nonetheless, the discovery risk for explorers in the 1960s was exceptionally high because of a lack of geological knowledge, and the scant availability of assessment files for the bulk of the area being worked. Although oil companies were common among the earliest explorers, over time, the predominant players became government-owned or large utility-based corporations that were either nuclear or exploration based.
Companies such as France’s Amok, Eldorado Nuclear (which eventually merged with Saskatchewan Mining and Development to become the current day
In the late 1960s, unlike today, the play in and around the basin contained a high proportion of people who had previously never worked in the province. The harsh working conditions in the bush prevalent in the “bad old days” improved after the Gulf Minerals’ Rabbit Lake discovery in 1968.
During the 1970s boom, caused by Uranerz’s 1975 discovery at Key Lake, the town of La Ronge, Sask., became the main staging area for most of the basin. Here, shortages in essential services such as hotel rooms, catering and charter aircraft, prompted local businesses to sprout up in order to meet the demand as the uranium rush intensified. Job opportunities flourished as an urgent need for everything from line cutters to geologists ballooned.
The Key Lake discovery demonstrated the “unconformity model” to explain the basin’s uranium deposits. The industry now understood that high-grade deposits could be found at the contact between the basin’s sandstones and underlying graphitic crystalline basement rocks.
Application of this model also led to the re-evaluation of the Collins A Zone (1976), the discovery of Collins B Zone (1977), West Bear (1977), Midwest deposit (1978), Dawn Lake 11 and 14 Zones (1978), McClean (1979), Cigar Lake (1981), Jeb deposit (1982) and Sue Zones (1988). Clearly, uranium deposits existed in deeper parts of the sandstone basin.
The basin’s infrastructure also began to develop and expand during the boom of the 1970s. Today’s roads into the northern regions around the basin can be directly attributed to uranium. The winter-access road to Black Lake, Sask., for example, has had a tremendous influence on the expansion of that area. Transportation costs have been cut significantly and there is a wider range of goods and services now available in the local centre, Stony Rapids, Sask., which is the staging area for the basin’s northern portion.
1980s decline
By the early 1980s, however, depressed uranium prices had resulted in a drastic decline in exploration expenditures in the region. Many of the original players abandoned projects in midstream. The level of activity remained low between 1985 and 2003.
Mine operators Cameco and
During this era, the few exploration companies that did remain in the basin shifted their focus from the shallow basin edges towards deeper targets — a trend that continues today.
Exploration for “blind” deposits, found where the basin’s sandstone exceeds 400 metres in thickness, marked phase two of uranium exploration in the basin. These deposits exhibit little or no surface expression except for subtle geochemical variations reflecting geochemical haloes surrounding mineralization. More sophisticated geophysical methods opened up large, deep areas of the basin and led to the discovery by Cameco of the massive McArthur River P2N orebody northeast of Key Lake in 1989.
Basin ‘renaissance’
Today, the region around the basin is experiencing what might be termed a renaissance, as activity heats up once again around uranium. Exploration-related growth has been accelerating since 2003. Saskatchewan Industry and Resources has projected total 2004 exploration expenditures in the basin at $26 million ($16 million spent by Cameco and
However, while the town has traditionally been known for well-trained aboriginal field workers, an increased demand in the last two years has outstripped supply. Most notably, the bulk of the workforce has aged, and are now in their 40s and 50s, sprinkled with a few old-timers who have come out of retirement to take advantage of the recent boom. This phenomenon can be attributed to the preceding lean years, when younger locals looked to other industries and regions for regular work.
Local businesses that supply goods and services to the exploration industry such as charter-aircraft supply companies (helicopter and fixed wing), expediters, fuel, grocery and hardware stores, are also enjoying a brisk trade these days. One such business reported an increase in staff to 44 from six employees in two years. Points North Landing, which didn’t exist in the 1970s, supplies both aircraft and accommodation in the Athabasca basin. During the past year, it has been continually over-booked, as have facilities in Stony Rapids.
The initial Athabasca basin uranium discoveries at Rabbit, Key, Cluff and McClean Lakes were all mined as open pits, which involved the removal of overburden and waste rock. However, since these shallower deposits have been exhausted, the deeper underground deposits are now being mined.
Conventional mines have a mill where the ore is crushed, ground and then leached with sulfuric acid to dissolve the uranium oxides. Most of the ore remains undissolved in the leaching process, and these solids or “tailings” are then separated from the uranium-rich solution, usually by allowing them to settle out. At the mill of a conventional mine, or the treatment plant of an in-situ-leach operation, the uranium is then separated by ion exchange before being dried and packed.
In transition
Canada produced about 30% of the world’s mined uranium in 2004, worth about $800 million, according to the World Nuclear Association. We are currently in the midst of a transition from the open-pit and underground uranium mines started between 1975 to 1995, to deep, high-grade mines, all in northern Saskatchewan.
Cameco, for example, operates the McArthur River mine, where production started at the end of 1999. McArthur ore is milled at the Key Lake mill. The Key Lake deposits, with original reserves of 73,900 tonnes uranium (192.13 million lbs. U3O8) grading 2% uranium (0.24% U3O8), are now mined out. Cameco’s other former mainstay, Rabbit Lake, still has 2004 reserves of 6,924 tonnes uranium (18 million tonnes U3O8) and 2004 production of 2,077 tonnes uranium (5.4 million tonnes U3O8). Mining continues at Eagle Point.
McArthur River is the world’s largest high-grade deposit with reserves and resources of 167,879 tonnes uranium (436.8 million lbs. U3O8) grading 21.2% (25% U3O8) at a depth of 640 metres. Opening at the end of 1999, non-entry, remote-control raise-boring is the sole mining method. The ore is trucked as a slurry 80 km south to the modified Key Lake mill, which produced 7,193 tonnes uranium (18.7 million lbs. U3O8) in 2004. Tailings are deposited in the mined-out Deilmann pit. Cameco is the operator and majority owner, with Areva as its partner. Application has been made to increase licensed capacity to 8,462 tonnes uranium (22 million lbs. U3O8).
Cigar Lake is the world’s largest undeveloped high-grade deposit with the main orebody about 430 metres below surface. Proven and probable reserves are 89,045 tonnes uranium (231.5 million lbs. U3O8) averaging 16.16% uranium (19.06% U3O8), primarily for phase one. Resources, primarily for phase two, are estimated to be 46,157 tonnes uranium (120 million lbs. U3O8). Total reserves and resources are about 134,626 tonnes uranium (350 million lbs. U3O8).
Drifts will be developed on two levels in basement rock beneath the orebody. The ore will be frozen and mined from the upper production level using a water-jet boring, non-entry method. The high-grade ore will be trucked as a slurry for initial processing at an expanded McClean Lake mill — the majority of the solution will then be trucked to Rabbit Lake for final processing. Production from Cigar is possible in 2007.
Areva, in joint venture with
A feasibility study is in progress on Areva’s Midwest deposit. If the company decides to mine the deposit, the ore will be processed at the McClean Lake mill. Targeted annual production is 2,200 tonnes uranium (5.7 million lbs. U3O8) per year for six years. The project was approved by a joint federal-provincial panel in 1998.
When world leaders began reconsidering nuclear power as an option about five years ago, a few adventuresome junior explorers began to pick up where some of the earlier players had left off.
Purepoint is currently planning a 9,000-to 10,000-metre drill program on its Turnor Lake and Red Willow projects during the 2005-2006 winter season. In addition, detailed ground geophysical surveys will be performed on targets at Purepoint’s McEwen, Umfreville and South Newnham properties in preparation for drilling the following year. Purepoint has been staking key properties with historic significance since December 2002.
Unlike the 1960s, when there were little to no assessment files to access, there is now ample information for companies to sift through. In fact, the Saskatchewan Industry Resources office now has a problem managing all of the information that exists — some files are reportedly over a foot thick. Databases set up by the Saskatchewan Mineral Deposits Index (SMDI) offer today’s explorers summaries of many prospects, providing them with a basis or rationale for spending exploration funds on sophisticated geological techniques.
Access to this information is giving the raft of new players in the basin a leg up that early explorers just didn’t have. Along with the majors, such as Cameco and Cogema, there were at least 25 junior companies active in the area by the end of January 2005. These junior explorers are banking on using old information with new technology to locate opportunities that may have been previously identified, but not capitalized on. As well, these new players are not averse to investigating difficult areas of the basin. Traditionally, explorers have focused on the eastern edge, however, the recent
The rush for uranium is on and all eyes are on Canada as the world’s richest source. Happy times are here again for many businesses in the Athabasca Basin — and this time, it’s looking like the good times are here to stay.
— Andrew Gracie is vice-president of northern affairs with Purepoint Uranium and has held senior positions with the Saskatchewan Department of Mineral Resources, Saskatchewan Energy and Mines, and Saskatchewan Industry and Resources over the past 35 years. Michael Lederhouse is vice-president of field operations with Purepoint Uranium, and has managed exploration projects for Cameco, Areva (Cogema), Noranda, Cominco, Placer Dome and Phelps Dodge.
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