Trading Symbol: SXR - Toronto Stock Exchange,
JSE Limited (Johannesburg stock exchange)
TORONTO, ON, and JOHANNESBURG, South Africa, Dec. 4 /CNW/ - sxr Uranium One Inc. announced today that its 71.6% owned Aflease Gold Limited ("Aflease Gold") affiliate has released an updated mineral resource and reserve statement for its Modder East Project and an updated resource statement for its Sub Nigel Project. The updated statements show an increase in both resources and reserves at Modder East and an upgrading of resources at Sub Nigel. The Modder East and Sub Nigel Projects are located in South Africa's East Rand goldfields, 30km east and 35km east-southeast of the city of Johannesburg, respectively.
Modder East Project
The revised statement shows a reserve tonnage of 7.69Mt grading 5.54g/t for 1.37 million contained ounces of gold in the probable category. This represents a 28% increase over the estimates contained in the August 16, 2006 Modder East feasibility study prepared by Turgis Consulting and audited by SRK Consulting (available on the Aflease Gold website www.afleasegold.com and on SEDAR). In addition, the revised statement shows a resource tonnage of 22.57Mt grading 3.31g/t for 2.40 million contained ounces of gold in the indicated category (a 19% increase from the 2.01 million ounces reported previously) and 13.32Mt grading 2.31g/t for 0.99 million contained ounces of gold in the inferred category (a 3% decrease from the 1.02 million ounces reported previously). The indicated resource tonnage at Modder East has remained essentially unchanged while the average grade has increased by 19% (from 2.79g/t to 3.31g/t). In all cases, mineral reserves and resources have been reported in accordance with the classification criteria of the South African Code for Reporting of Mineral Resources and Mineral Reserves (the SAMREC Code).
The increase in reserves and resources at Modder East reflects the results of the 2006 Phase II drilling program conducted on the property by Aflease Gold. The cut-off grades (Table 1 refers), gold price (US$430/oz) and exchange rate (US$1:R6.49) used in the assessment are the same as in the Modder East feasibility study. This was considered necessary to allow for a direct comparison to be made with the previous resource estimate, despite the recently improved outlook for the gold price going forward.
The main components of the Modder East Mineral Resource are: - The Black Reef Buckshot Pyrite Leader Zone (BPLZ). - The Black Reef Channel Facies (CF). - The Blanket Facies (BF). - The UK9A Kimberley Reef. - The UK5A Kimberley Reef.
The Black Reef comprises three facies. At the top is the higher grade BPLZ, which averages 0.5 metres in width and is the primary mining target. The BPLZ is a placer deposit, with gold present within a heavy mineral suite dominated by pyrite and hosted within a conglomerate. Continuity of mineralization in the target area has been confirmed, with the zone of mineralization clearly visible within drillhole cores. The BPLZ overlies the BF, a 1.3 metre thick quartzite which has not been targeted due to its very low gold grades. At the base of the Black Reef is the 3 metre thick, erosional CF. The Black Reef dips at around 3 degrees to the south.
The UK9A is a narrow channel reef, commonly characterized by the presence of kerogen, either as lamina partings or as flyspeck carbon within the conglomerate reef unit. The UK5A is a multi-stacked package of robust conglomerates. The reefs dip at around 12 degrees to the south.
The Black Reef is developed at approximately 300 metres below surface, while the sub-cropping Kimberley (UK9A and UK5A) reefs reach depths of around 600 metres. The mineralized horizons are considered to be structurally simple and generally well understood, as a result of a long history of mining the underlying Main Reef on the East Rand and the selective mining of the UK9A at the adjacent Petrex operations.
The BPLZ resource estimate is based on diamond boreholes drilled by Aflease Gold and the previous owners of the project Gencor, and declustered underground channel samples from the adjacent UC prospect previously operated by Petrex Mines ("Petrex"). The database consists of 51 drillholes (excluding deflections) and 238 underground channel samples declustered (i.e. averaged) within 50m X 50m squares from 16,694 sample points. The methodology employed in the resource estimation is similar to that applied in the previous resource estimate.
The CF consists of a sequence of pyrite-rich quartzites, pebbly quartzites and conglomerates, is approximately 3m in thickness, and is separated from the overlying BPLZ by the BF. The CF is erosional into its footwall and estimates have been developed for the Channel Facies over the footprint of the mineralized BPLZ that has been delineated.
Pillars remaining in the UC prospect area have been included in the resource estimate. The estimate is based on the declustered values obtained from Petrex as well as outlines of the remnants from Petrex plans. The pillars are all within the higher grade area close to the 'Shoreline' feature, and are generally surrounded by sampling data on all sides. Given the relative density of data, Ordinary Kriging has been applied rather than the Simple Kriging used in the other estimates.
In addition to the Black Reef, Aflease Gold has also delineated mineral resources on the UK9A and the UK5A reefs lying within the footwall of the Black Reef. A dataset consisting of 171,000 underground channel samples within stoping and development on Grootvlei Mine immediately south of the Modder East project area is available as an analogue to the payshoot that has been intersected on Modder East.
The estimation process for the Kimberley reefs is the same as that described above for the BPLZ, with 45 intersections (excluding deflections) being used in the estimate.
As noted above, there has been an increase in reserve ounces at Modder East. With respect to the BPLZ, the increase resulted from the following factors:
1. Borehole DD54, drilled in 2006, cut higher grade gold mineralization
within an area of previously relatively lower grade beach facies
material.
2. Marginal, lower grade BPLZ material, which was included in the
previous reserve estimate, has been removed from the November 2006
estimate. This is reflected by a drop in the reserve tonnage.
3. The BPLZ was remodeled (i.e. domained) based on new sample data. In
the previous resource estimate (February 2006) the BPLZ was sub-
divided into three domains. In the current estimate, the BPLZ has
been subdivided into four distinct domains based on metal
accumulation and channel width distributions as indicated by the
drillhole data. Notably, the higher grade beach facies, which forms
the basis of the reserve at Modder East, was modeled as a separate
domain.
The increase in UK9A reserve ounces at Modder East was caused by a significant increase in indicated tonnes. This resulted from the upgrading of the main UK9A channel in the south of the prospect area, together with the smaller Kimberley channel in the east.
2006 Phase II drilling program
The Phase II exploration drilling program at Modder East was completed in July 2006. Five holes were drilled to test the southerly continuity of the UK9A reef while one hole was drilled to confirm the northern margin of the BPLZ. Drillhole DD54, sunk on the BPLZ, intersected higher grade gold mineralization (795cmg/t) thus confirming both the northern boundary of the mineralized envelop and the sedimentalogical model used to direct exploration on the Black Reef at Modder East.
The five holes sunk on the UK9A (DD55, DD56, DD57, DD58 and DD59) confirmed the southward continuation of the gold mineralization, specifically the relatively higher grade central payshoot. Furthermore, a new potentially higher grade UK9A payshoot was identified near the southwest margin of the UC prospect area. Drillhole DD59, located near the southeast corner of the Modder East prospect area, unexpectedly cut BPLZ mineralization grading at up to 267cmg/t.
Further drilling will be carried out at Modder East in 2007 (Phase III) in order to:
1. Test for higher grade extensions to the BPLZ outside the current
resource envelope.
2. Test the BPLZ in the vicinity of DD59 in order to delineate the
extent of the mineralization intersected in the hole.
3. Delineate more accurately the new UK9A payshoot identified near the
southwest margin of the UC prospect area.
Resource and reserve statements for Modder East
The revised mineral resource and reserve estimates for the Modder East Project are shown in Tables 1 and 2, respectively. The BPLZ and UK9A reefs have been modeled at a minimum mining width of 1m.
Table 1. November 2006 Modder East resource statement
- cut-offs as per February 2006
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% increase/ Actual
decrease increase/
Metal in ounces decrease
Tonnes Grade Content Nov 2006 vs in ounces
(Mt) (g/t) (Moz) Feb 2006 (Moz)
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Indicated
(1)BPLZ+BF 6.46 6.35 1.32 18% 0.20
(2)Channel+BF 13.15 1.41 0.60 -8% -0.05
(1)BPLZ pillars 0.27 8.33 0.07 na 0.07
(3)UK9A 2.69 4.76 0.41 71% 0.17
(4)UK5A
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Sub Total Indicated 22.57 3.31 2.40 19% 0.39
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Inferred
(1)BPLZ+BF 0.43 2.08 0.03 -40% -0.02
(2)Channel+BF 1.06 2.60 0.09 na 0.09
(3)UK9A 2.43 4.09 0.32 -20% -0.08
(4)UK5A 9.41 1.82 0.55 -4% -0.02
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Sub Total Inferred 13.32 2.31 0.99 -3% -0.03
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(1) Quoted at a cut-off of 167 cmg/t
(2) Quoted at a cut-off of 379 cmg/t
(3) Quoted at a cut-off of 199 cmg/t
(4) Quoted at a cut-off of 496 cmg/t
Notes:
1. The mineral resources have been reported in accordance with the
classification criteria of the SAMREC Code.
2. The revised resource estimate was prepared by Charles Muller, B.Sc.
(Hons), Pr.Sci.Nat., of Global Geo Services, an independent
geoscience consultant to the Corporation. Charles Muller is a
qualified person for the purposes of NI 43-101. The resource was
audited by Mark Wanless of SRK Consulting.
3. In the opinion of SRK, the mineral resource classifications defined
in the SAMREC code are materially similar to those defined in
Standards on Mineral Resources and Reserves Definitions and
Guidelines adopted by Canadian Institute of Mining, Metallurgy and
Petroleum utilized by Canadian National Instrument 43-101.
4. Mineral resources are not mineral reserves and do not have
demonstrated economic viability.
The indicated resources detailed in Table 1 have been converted into probable reserves, as shown in Table 2, through a process of mine planning, economic modeling and the application of appropriate modifying factors, and are reported as delivered to the plant.
Table 2. November 2006 Modder East reserve statement
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% increase
in ounces Actual
Metal Nov 2006 vs increase
Tonnes Grade Content feasibility in ounces
(Mt) (g/t) (Moz) study (Moz)
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Probable
BPLZ+BF 5.18 6.43 1.07 20% 0.18
UK9a 2.51 3.72 0.30 67% 0.12
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Total Probable 7.69 5.54 1.37 28% 0.30
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Notes:
1. The revised reserve statement was prepared by Clive Brown of Turgis
Consulting and audited by Herbert (Wally) Waldeck of SRK Consulting.
The probable mineral reserves have demonstrated profitability when
included in a mine plan using industry accepted mining methods and a
gold price of US$430 per ounce and an exchange rate of US$1.00:R6.49.
Using these criteria, a pay limit was used to identify blocks of
ground for mining. Within these blocks of ground, a cut-off grade of
230cmg/t was applied to identify additional panels for mining. The
gold content figures are fully inclusive of mining dilutions and gold
losses and are reported as mill delivered tonnes and head grade.
Metallurgical recovery factors have not been applied to the reserve
figures.
2. Mineral reserves are included in mineral resources
sxr Uranium One's President and Chief Executive Officer Neal Froneman, who is also Chief Executive Officer of Aflease Gold, commented:
"The revised reserve statement for Modder East indicates that the value of the project has increased. We will update shareholders of any changes in the project's value in due course."
Quality Assurance and Quality Control
Exploration programs carried out by Aflease Gold are done so under the direction of Warwick Bullen, M.Sc., Pr.Sci.Nat., Vice President: Geology and Exploration, Aflease Gold, and a qualified person for the purposes of NI 43-101. Geological and geostatistical modeling is undertaken by two consultants, Peter Camden-Smith, M.Sc., G.D.Eng, MBL, Pr.Sci.Nat, and Charles Muller, B.Sc.(Hons.), Pr.Sci.Nat., both of whom are 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. All borehole collars are surveyed to within an accuracy of 0.1 metre and borehole density measurements are routinely performed on all intersections. Down-hole surveys are carried out on all surface drillholes by qualified personnel. Half-core assay samples are collected by appropriately qualified staff, the remaining half-core being retained for inspection by interested parties. All boreholes are routinely logged in detail according to a standard procedure. Samples are prepared and are assayed at the Anglo American Research Laboratory (renamed Anglo Research on 1 October 2006) located near Johannesburg, South Africa, which is accredited under SANAS and ISO 17025 certified. Gold assays are performed using conventional lead collector fire assay procedures, with an ICP-OES instrumental finish. Quality control procedures follow industry standard protocols and include the use of blind control samples.
Sub Nigel Project - Nigel Reef target
The November 2006 resource statement for the Nigel Reef target shows a resource tonnage of 1,539Kt grading 4.14g/t for 205,000 contained ounces of gold in the indicated category and 139Kt grading 2.99g/t for 13,000 contained ounces of gold in the inferred category (Table 3). The resources were estimated using a cut-off grade of 220cmg/t. This compares with a resource of 180,000 ounces in the inferred category grading at 5.37 g/t gold, as stated in the audited mineral resource statement for the Nigel Reef target prepared by SRK Consulting in December 2005. 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).
In light of the November 2006 resource statement, Aflease Gold has decided to proceed with a pre-feasibility study on the Nigel Reef target. The study is expected to be completed during the first quarter of 2007. The study will be completed internally, with outside consultants used where needed.
sxr Uranium One's President and Chief Executive Officer Neal Froneman, who is also Chief Executive Officer of Aflease Gold, commented:
"Sub Nigel represents a real opportunity to expand the gold mining profile of Aflease Gold in the short term. Given the excellent state of the existing infrastructure, we could possibly begin production at Sub Nigel even earlier than at Modder East, if our feasibility studies produce the expected positive results."
The Sub Nigel Gold Project consists of three targets - the Nigel Reef, the stratigraphically equivalent Main Reef, and the Erosion Channel. The Nigel Reef target is located at the dormant Sub Nigel gold mine, while the Main Reef target is located at the dormant Spaarwater gold mine situated immediately west of Sub Nigel. The Erosion Channel target is an erosional feature incised into shales of the Jeppestown Subgroup immediately below the Nigel and Main Reefs along the boundary between the two properties. The October 2006 resource statement includes mineral resources to a depth of 750m below surface.
Both the Sub Nigel and Spaarwater gold mines are owned as to 100% by Aflease Gold Limited.
The Nigel/Main Reef is a small-pebble conglomerate ranging from 15cm to 65cm in thickness. The reef is developed on a grey, banded shale footwall and is overlain by quartzite. Contacts between the hanging and footwall lithologies are sharp. The Erosion Channel varies between 200m and 500m in width, is some 150m in thickness, and contains bands of quartzite, pyritic quartzite and conglomerate fill. Gold mineralization occurs in the pyritic quartzites within the palaeo-channel.
The Sub Nigel mine produced an estimated 15 million ounces of gold from the Nigel Reef between 1909 and 1971. A total of 29.7 million tonnes of ore at an average head grade of 15.7g/t were milled during this period. The 900m deep Sub Nigel 1 Shaft on the property was recently re-commissioned and licensed and is fully operational. The Spaarwater mine, located immediately to the west of Sub Nigel, produced 850,000 ounces of gold from 2.56 million tonnes of ore at an average head grade of 10.4g/t between 1947 and 1969. All the gold was produced from the Main Reef.
Both the Nigel and Main Reefs are accessed from Sub Nigel 1 Shaft.
The table below summarizes the revised resources for the Sub Nigel Project by category.
Table 3. November 2006 Sub Nigel resource statement
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Actual
increase/
decrease
Metal in ounces -
Tonnes Grade Content Nov 2006 vs
(Kt) (g/t) (Koz) Dec 2005 (Koz)
-----------------------------------------------------------------
Indicated
(1)Sub Nigel
- Nigel Reef 1,539 4.14 205 205
Spaarwater
- Main Reef
Erosion Channel
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Sub Total Indicated 1,539 4.14 205 205
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Inferred
(1)Sub Nigel
- Nigel Reef 139 2.99 13 -167
Spaarwater
- Main Reef 1,258 4.08 165 0
Erosion Channel 1,301 5.71 239 0
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Sub Total Inferred 2,698 4.81 417 -167
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(1) Quoted at a cut-off of 220cmg/t
Notes:
1. The cut-off grade was determined using a gold price of US$620/oz and
an exchange rate of US$1:R6.50.
2. The mineral resources have been reported in accordance with the
classification criteria of the SAMREC Code.
3. In the opinion of SRK, the mineral resource classifications defined
in the SAMREC code are materially similar to those defined in
Standards on Mineral Resources and Reserves Definitions and
Guidelines adopted by Canadian Institute of Mining, Metallurgy and
Petroleum utilized by Canadian National Instrument 43-101.
4. Mineral resources are not mineral reserves and do not have
demonstrated economic viability.
The increase in resources at the Nigel Reef target reflected in the November 2006 resource estimate is the result of a re-evaluation of the resource using geostatistical techniques, in contrast to the December 2005 estimate which was based on classical statistical methodologies. Geostatistical techniques involve the statistical treatment of spatially arranged data using semivariograms, kriging and multivariate analysis. In addition, mined-out areas and associated development ends were captured in digital format for the first time, as was the historical assay database consisting of some 6,500 stretch values located along on-reef development drives and in stoped-out areas. The stretch values were checked against composited chip samples taken during 2006 from stope faces and along on-reef development drives. The decrease in grade at the Nigel Reef target is primarily a function of the higher stope width used in the November 2006 estimate - 90cm as opposed to 70cm used in earlier resource estimates.
The November 2006 resource estimate for the Nigel Reef target was prepared by Peter Camden-Smith, M.Sc., G.D.Eng, MBL, Pr.Sci.Nat. of Camden Geoserve, and Charles Muller, B.Sc. (Hons), Pr.Sci.Nat. of Global Geo Services, independent geoscience consultants to Aflease Gold. Both Camden-Smith and Muller are qualified persons for the purposes of NI 43-101. The resource estimation process was managed by Warwick Bullen, M.Sc., Pr.Sci.Nat., Vice President, Geology and Exploration, Aflease Gold and a qualified person for the purposes of NI 43-101. The resources were audited by Mark Wanless of SRK Consulting.
About Aflease Gold
Aflease Gold is a South African gold resource company listed on the JSE Limited (the Johannesburg stock exchange). The company owns the Modder East Gold Project, currently under construction, as well as the Sub Nigel, New Kleinfontein, Turnbridge and the Holfontein Gold Projects, all on the East Rand; the Ventersburg Gold Project in the Free State gold field; and the Etendeka Gold Project in Namibia. Aflease Gold was formed in January 2006 through the reverse takeover of Sub Nigel Gold Mining Company by New Kleinfontein Mining Company, a wholly-owned subsidiary of sxr Uranium One Inc. The company is currently owned as to approximately 71.6 % by sxr Uranium One and has a market capitalization in excess of R1billion.
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 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 approximate 71.6% 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
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 future plans and objectives of Uranium One and its Aflease Gold affiliate 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 or Aflease Gold'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 or Aflease Gold'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 or Aflease Gold'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, Management's Discussion and Analysis for the third quarter of 2006 and Uranium One's (final) short form prospectus dated October 26, 2006 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.
Statements in this release that are not historical facts are "forward-looking statements" involving known and unknown risk and uncertainties which are beyond the ability of the Corporation to control or predict and which could cause actual events or results to differ materially from those anticipated in such forward-looking statements.
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 reserve is the economically mineable part of a measured or indicated resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate at the time of reporting that economic extraction can be justified. A mineral reserve includes diluting materials and allows for losses that may occur when the material is mined. A proven mineral reserve is the economically mineable part of a measured resource for which quantity, grade or quality, densities, shape and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters to support production planning and evaluation of the economic viability of the deposit. A probable mineral reserve is the economically mineable part of an indicated 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.
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. 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 the SAMREC Code.
Investors are cautioned not to assume that all or any part of an inferred resource exists or is economically or legally mineable. Exploration data is acquired by the Corporation and its consultants under strict quality assurance and quality control protocols.
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
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