Trading Symbol: SXR - Toronto Stock Exchange, JSE Limited (Johannesburg
stock exchange)
TORONTO, ON and JOHANNESBURG, South Africa, Jan. 17 /CNW/ - sxr Uranium One Inc. ("Uranium One") today announced an updated mineral resource estimate for its Dominion uranium project in South Africa. The updated estimate shows a 37% increase in the Indicated uranium resources over the estimate reported in June 2006.
In addition, Uranium One has declared for the first time an Indicated uranium and gold resource in the surface waste dumps located on the Dominion property (the Dominion Dumps). The processing of material from the dumps is expected to result in greater production and lower treatment costs during the first three years of plant operation than projected in the independent technical report on the Dominion project prepared by SRK Consulting, as amended and filed on SEDAR on October 26, 2006.
Revised Mineral Resource Estimate
Dominion and Rietkuil Sections
The primary focus of the current and ongoing diamond exploration drilling program is to upgrade existing Inferred resources into Indicated resources such that mine planning can be expedited for production purposes. This has been achieved by delineating the down dip extensions of previously identified higher grade channels. Ongoing drilling is primarily aimed at targeting further extensions to these known ore-shoots, as well as identifying additional ore-shoots in the current Inferred resource areas. Focused drilling on newly identified ore-shoots is being undertaken for conversion to Indicated resources, with a view to maximizing the resource and reserve base for mine planning purposes and to assess the ability of the Dominion uranium project to potentially support an expansion to approximately 7.0 million pounds of U(3)O(8) production per annum by 2015.
The updated mineral resource estimate for the Dominion uranium project shows an Indicated uranium resource of 36.4 million tonnes at a grade of 0.81 kg/tonne, containing 64.9 million pounds U(3)O(8). This represents a 37% increase in the number of contained pounds of uranium within the Indicated uranium resource base relative to the most recent Dominion resource estimate (contained in the June 2006 independent technical report on the Dominion property prepared by SRK Consulting and available on SEDAR) of 26.0 million tonnes at a grade of 0.83 kg/tonne, containing 47.5 million pounds U(3)O(8) in the Indicated category.
The updated mineral resource estimate shows an Inferred resource of 219.4 million tonnes at a grade of 0.38 kg/tonne, containing 183.6 million pounds of U(3)O(8) compared to 178.4 million tonnes at a grade of 0.51 kg/tonne, containing 199.2 million pounds of U(3)O(8) in June 2006. The increase in contained pounds of U(3)O(8) in the Indicated resource, and the corresponding decrease in contained pounds of U(3)O(8) in the Inferred resource, reflects the focus of the drilling carried out in connection with the resource update.
The decrease in the average grade of the Inferred uranium resource is largely due to several higher grade ore-shoot extensions being incorporated into the Indicated resource, resulting, at this stage, in an overall lower Inferred uranium resource grade. In line with our experience to date, it is anticipated that ongoing drilling at the site would lead to the identification and delineation of additional higher grade ore-shoots in the Inferred resource, which would both increase the average Inferred grade and provide additional targets for conversion to Indicated resources. Furthermore, during the conversion of Inferred to Indicated resources, the reefs are optimized with respect to economic mining widths and grade. This process considers the selection of an optimal mining cut (thickness) to maximize uranium grades and associated contents. Currently, Indicated resources are quoted over selective mining cuts (grade optimized), while Inferred resources are quoted over full channel widths (grade diluted over total, thicker, reef units).
In addition, the revised mineral resource estimate shows an Indicated gold resource of 36.4 million tonnes at a grade of 0.91 g/tonne, containing 1.1 million ounces of gold. This represents a 17% increase in the contained ounces within the Indicated gold resource base relative to the June 2006 resource estimate of 26.0 million tonnes at a grade of 1.09 g/tonne, containing 0.9 million ounces of gold. Inferred gold resources have increased from an average grade of 0.63 g/tonne to 0.67 g/tonne, resulting in a 32% increase in Inferred contained gold ounces, from 3.6 million ounces to 4.8 million ounces.
In all cases, mineral resources have been reported in accordance with the classification criteria of the South African Code for Reporting of Mineral Resources and Mineral Reserves ("SAMREC").
The tables below summarize the revised resource estimate by category:
Dominion Uranium Project - Uranium and Gold Resources Summary
(Effective 31 December, 2006)
Dominion Reefs: Dominion and Rietkuil Sections
Indicated Mineral Resources(1)
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Contained Contained
U3O8 Gold
Tonnes U3O8 Grade (thousands Gold Grade (thousands
Reef Unit (thousands) (kg/tonne) of lbs) (g/tonne) of ozs)
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Dominion
Upper 13,735 0.74 22,497 0.65 287
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Rietkuil
Upper 11,215 0.86 21,246 0.93 335
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Dominion
Lower 9,382 0.86 17,710 1.36 410
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Rietkuil
Lower 2,053 0.76 3,436 0.43 28
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Total
Indicated 36,385 0.81 64,889 0.91 1,060
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Inferred Mineral Resources(1)
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Contained Contained
U3O8 Gold
Tonnes U3O8 Grade (thousands Gold Grade (thousands
Reef Unit (thousands) (kg/tonne) of lbs) (g/tonne) of ozs)
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Dominion
Upper 71,662 0.32 50,303 0.49 1,128
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Rietkuil
Upper 48,331 0.55 58,796 0.44 683
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Dominion
Lower 54,552 0.27 32,836 0.91 1,594
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Rietkuil
Lower 44,830 0.42 41,695 0.93 1,347
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Total
Inferred 219,375 0.38 183,630 0.67 4,752
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(1) Mineral resource estimated by Dr. Carina Lemmer of Geological &
Geostatistical Services and reported to a cut-off of 30 cm.kg/tonne
U(3)O(8) for both Dominion and Rietkuil, and 0.00 g/tonne gold.
Mineral resources are reported in accordance with SAMREC. Mineral
resources are not mineral reserves and do not have demonstrated
economic viability.
The drilling campaign conducted from May 6, 2005 to November 21, 2006 comprised 209 BQ- and NQ-calibre diamond drill holes, totaling 91,076 metres. Of these, 164 boreholes (93 and 71 boreholes at the Rietkuil and Dominion sections, respectively) have been utilized for the current resource update (data received and verified prior to October 15, 2006). This represents an additional 59 boreholes since the June 2006 resource declaration. The assay results from the boreholes considered for the resource estimate are summarized in a schedule that can be accessed at the Corporation's website (www.uraniuml.com). This schedule is accompanied by a map indicating the drill hole locations at the Dominion Property.
Previously defined (June 2006) geological domains have been refined and extended based on the new drilling information. The estimation technique employed considers ordinary kriging in all the Indicated resource areas. Over the much larger portion of the resource that was classified as Inferred, stationarity was considered sufficient to apply simple kriging in a few cases where there was a paucity of data; otherwise, ordinary kriging was also applied. Mean values for panels of 240m x 240m were kriged in the Indicated resource areas, based on a 160 cm maximum mining width. Kriging in the Inferred resource areas was based on the full channel width. For both the Indicated and Inferred resources, a minimum mining width of 100 cm is considered. The cut-off values employed in the estimate are marginally different from the values employed in the June 2006 estimate, based on minor price variations (US$46.50/lb for U(3)O(8) and US$580/oz for gold, versus US 45.00/lb for U(3)O(8) and US$528/oz utilized in June 2006). The influence of the co-product gold values was also considered in the cut-off determination.
Since the previous resource declaration, the methodology for dip estimation has been revised (considering discrete dip domains as opposed to regional dip applications), allowing for more accurate tonnage estimates. Selective mining units of 30 m(2) have been applied, which more closely resembles actual planned mining panel dimensions. Resource classification was largely based on data quality, density and statistical parameters.
The revised resource estimate for the Dominion Reefs was prepared by Dr. Carina Lemmer of Geological and Geostatistical Services, independent geoscience consultants to Uranium One, and the underlying geological modeling was prepared by Dr. Richard Stewart, Pr.Sci.Nat. (SACNASP), MGSSA, Regional Exploration Geologist, Uranium One. Both are qualified persons for the purposes of NI 43-101. The data for the resource estimate was verified by Dr. Richard Stewart. Analytical verification was completed through the analysis of certified reference materials, duplicate sample and barren sample analysis. Geological and assay data is obtained from a central exploration database, where logging, sampling and data entry procedures are checked and verified.
Dominion Dumps Area
An auger drilling exploration program and associated evaluation of the Dominion Dumps was undertaken between May and November 2006. The Dominion Dumps comprise a cluster of four dumps generated by historic mining and milling activity on the Dominion property. Two of these (Areas 3 and 4) contain an Indicated resource of 3.4 million tonnes, at a grade of 0.16 kg/tonne uranium and 0.51 g/tonne gold, containing 1.2 million pounds of U(3) O(8) and 55,000 ounces of gold.
Dominion Dumps
Indicated Mineral Resources (2)
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Contained Contained
U3O8 Gold
Tonnes U3O8 Grade (thousands Gold Grade (thousands
Reef Unit (thousands) (kg/tonne) of lbs) (g/tonne) of ozs)
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Area 3 2,376 0.12 636 0.47 36
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Area 4 999 0.25 559 0.58 19
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Total
Indicated 3,375 0.16 1,195 0.51 55
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(2) Mineral resource estimated by Mr. Charles Muller, B.Sc.(Hons),
Pr.Sci.Nat, of Global Geo Services (Pty) Ltd. The dumps are reported
at 0 cm.kg/tonne cut-off and are inclusive of the entire dump
material, i.e. zero selectivity. Mineral resources are reported in
accordance with SAMREC. Mineral resources are not mineral reserves
and do not have demonstrated economic viability.
Uranium One plans to process material from the Dominion Dumps in addition to the planned underground production from the Dominion Reefs disclosed in SRK's October 2006 independent technical report. The introduction of tailings material is intended to maximize the use of the available plant capacity while underground tonnage is being ramped up. During the 2007 - 2009 period, Uranium One expects to process approximately 1,000,000 tonnes of slimes, at an average grade of 0.16 kg/tonne. The introduction of dump material is expected to reduce the plant unit cost over the 2007 - 2009 period, with the largest benefit expected in the early part of this three year period. Uranium One will provide guidance on expected production increases, later in the year, subsequent to the commencement of production.
The Dominion Dumps drilling program was completed on June 7, 2006. A total of 365 boreholes were drilled on the four areas totaling 1,643 metres. Of these, 67 boreholes (768 metres) were drilled on Dump 3 (50m x 50m drilling grid) and 216 boreholes (679 meters) on Dump 4 (30m x 30m drilling grid). Drilling was achieved using hand-held auger drills with 50 mm outer diameter pipes. Samples were collected at 1.5 metre depth intervals. These yielded samples of approximately 3.5 kg each. A total of 517 and 489 samples were collected and analyzed at the Dump 3 and 4 areas, respectively.
The boreholes were used to create a 3D wireframe of the dumps, which were filled with regular blocks of 2.5m x 2.5m x dump vertical thickness and used as the starting model for regularized blocks of 25m x 25m x 3m. The uranium (kg/tonne) and gold (g/tonne) values were interpolated into the regularized block model (using ordinary and simple kriging as the estimation technique). For the final model, sub-cells were created to represent an accurate volume. All drill data obtained and verified during the drilling program were considered for the resource estimate.
In evaluating the economic viability of the Dominion Dumps for resource classification purposes, the commodity prices applied for the Dominion Reefs resource estimates were utilized. Extraction ratios of 89% and 79% for gold and uranium, respectively, were based on test work undertaken at Mintek Laboratories, an accredited metallurgical laboratory in South Africa.
The resource estimate for the Dominion Dumps was prepared by Mr. Charles Muller, B.Sc. (Hons), Pr.Sci.Nat. of Global Geo Services (Pty) Ltd., independent geoscience consultants to Uranium One, who is a qualified person for the purposes of NI 43-101. Databases and analytical data were verified by Dr. Richard Stewart through the analysis of certified reference materials, duplicate sample and barren sample analysis.
The revised resource estimate for the Dominion Reefs, and the resource estimate for the Dominion Dumps, have been audited by SRK Consulting and will be contained in an independent technical report being prepared by SRK Consulting for filing in accordance with the requirements of NI 43-101.
Dominion Exploration and Drilling
Dominion and Rietkuil Sections
Drilling at Rietkuil and Dominion is ongoing, with an estimated 75,000 metres scheduled for 2007. The objective of this program is to further delineate the down-dip extensions of the identified high grade zones, as well as confirm and delineate the newly identified high grade ore-shoots. Exploration will also be undertaken in extension areas not currently classified as resources.
Additional Prospecting Rights
Surface mapping has indicated a continuation of the Dominion Group, outcropping to the west of the Dominion area. Based on the existing geological modeling completed at Dominion, combined with surface mapping and limited historic exploration data, a potential Dominion Reefs strike extension of approximately 60 km to the west of the Dominion project area has been identified.
In the process of applying for additional uranium prospecting rights Uranium One identified and prioritized the area to the west of the existing Dominion project area as the most important. Prospecting rights covering this projected extension of reef development, from surface to depths of approximately 500 metres, have been defined, comprising an area of 74,380 hectares. Uranium One has been formally granted prospecting rights over some 57,565 hectares of the 74,380 hectares; prospecting rights over the balance of this area are currently pending but applications have been accepted by the Department of Minerals and Energy. Exploration in this area is planned to commence early in 2007 and will include aerial-geophysical surveys, surface mapping and surface exploration drilling. A map showing the areas covered by the new prospecting rights as well as the existing project area is available on the Corporation's website at www.uranium1.com.
The newly acquired prospecting rights have increased the strike extent of the Dominion Reefs being explored at the existing Dominion Project by more than 400%, an area comparative to that of the West Wits Line in the Carletonville Goldfield (Witwatersrand Basin), hosting some of the major South African gold mines.
Quality Assurance and Quality Control
The Dominion project drilling program, including the Dominion Dumps drill program, is being carried out under the direction of Mr. M.H.G. Heyns, Pr.Sci.Nat. (SACNASP), MSAIMM, MGSSA, Vice President, Geology and Exploration, Uranium One, and Dr. R.A. Stewart, Pr.Sci.Nat. (SACNASP), MGSSA, Regional Exploration Manager, Uranium One, both qualified persons for the purposes of NI 43-101.
Exploration data is acquired by the Corporation and its consultants under strict quality assurance and quality control protocols. Half-core assay samples are collected by appropriately qualified personnel. Core samples are prepared at an onsite preparation facility managed by Superlabs Ltd. and are assayed at the Set Point Laboratory located in Johannesburg, South Africa, which is accredited under SANAS and ISO/IEC 17025. Gold assays are performed using conventional fire assay procedures with an inductively coupled plasma optical-emission spectroscopic ("ICP-OES") finish on 50g aliquots, and uranium assays are performed using X-ray fluorescence spectrometry on a pressed powder pellet or a borate fusion disc. Quality control procedures follow industry standard protocols and include the use of blind control samples.
About sxr Uranium One
sxr Uranium One Inc. is a Canadian uranium and gold resource company with a primary listing on the Toronto Stock Exchange and a secondary listing on the JSE Limited (the Johannesburg stock exchange). The Corporation owns the Dominion Uranium Project in South Africa and the Honeymoon Uranium Project in South Australia, and is actively pursuing growth opportunities in the uranium sector in the western United States. The Corporation holds an approximately 71.4% interest in Aflease Gold Limited, which owns the Modder East Gold Project in South Africa. Through a joint venture with Pitchstone Exploration Ltd., the Corporation is also engaged in uranium exploration activities in the Athabasca Basin of Saskatchewan.
Cautionary Statement
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
This News Release includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian legislation. All statements other than statements of historical fact included in this release including, without limitation, statements regarding potential mineralization, reserves, resources, estimates of future mining, recovery, production rates and operating costs, and future plans and objectives of Uranium One, are forward-looking statements (or forward-looking information) that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors could cause actual results to differ materially from Uranium One's expectations. Such factors include, among others, the actual results of exploration activities, actual results of reclamation activities, the estimation or realization of mineral reserves and resources, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, availability of capital required to place Uranium One's properties into production, conclusions of economic evaluations, changes in project parameters as plans continue to be refined, future prices of commodities, possible variations in ore grade or recovery rates, failure of plant, equipment or processes to operate as anticipated, accidents, labour disputes and other risks of the mining industry, delays in obtaining governmental approvals, permits or financing or in the completion of development or construction activities, Uranium One's hedging practices, currency fluctuations, title disputes or claims limitations on insurance coverage, as well as those factors discussed under "Risk Factors" in Uranium One's Annual Information Form and Management's Discussion and Analysis as filed with securities regulatory authorities in Canada. Although Uranium One has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended.
There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Uranium One does not undertake to update any forward-looking statements that are included herein, except in accordance with applicable securities laws.
In addition, this news release uses the terms "indicated resources" and "inferred resources" as defined in accordance with the SAMREC Code (South African Code for Reporting of Mineral Resources and Mineral Reserves prepared by the South African Mineral Resource Committee) ("SAMREC") under the auspices of the South African Institute of Mining and Metallurgy effective March 2000 or as amended from time to time. A mineral resource is a concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the earth's crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge. A measured mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes that are spaced closely enough to confirm both geological and grade continuity. An indicated mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes that are spaced closely enough for geological and grade continuity to be reasonably assumed. An inferred mineral resource is that part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited exploration and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes. Mineral resources which are not mineral reserves do not have demonstrated economic viability.
The indicated and inferred resource estimates provided herein in accordance with SAMREC will be reconciled to the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Mineral Reserves, adopted by CIM Council on August 20, 2000, as may be amended from time to time by the CIM, in accordance with National Instrument 43-1 01 - Standards of Disclosure for Mineral Projects, ("NI 43-101") in the independent technical report being prepared by SRK for filing in accordance with the requirements of NI 43-101.
Investors are cautioned not to assume that all or any part of the mineral deposits in the Measured and Indicated resource categories will ever be converted into reserves. In addition, "Inferred resources" have a great amount of uncertainty as to their existence and economic and legal feasibility. It cannot be assumed that all or any part of an Inferred mineral resource will be ever be upgraded to a higher category. Under South African rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies or economic studies except under conditions noted in SAMREC. Under Canadian rules, estimates of Inferred mineral resources may not form the basis of feasibility or pre-feasibility studies or economic studies except for preliminary assessments as defined under NI 43-101. Investors are cautioned not to assume that all or any part of an Inferred resource exists or is economically or legally mineable.
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