Subject for new holders Stock Code ARU - ARAFURA RESOURCES NL Posted 30/03/06 19:33 Posted by macrae12 - Banana IP 61.69.xxx.xxx Hotcopper Radio ARU on BoardRoom Radio Post #982900 - 395 reads Start of thread
With apologies to kalmsg (an excellent poster) - some of these posts ar a little old but they are simply superb.
NOLANS BORE
IT IS CRITICAL TO READ 2005 ANNUAL REPORT TO ATTEMPT TO UNDERSTAND THIS PROJECT PROPERLY. THERE IS A LOT OF INFO AVAILABLE ON NOLANS, IT IS AN IMPORTANT RESOURCE.
"Nolans Bore is a unique deposit. It is a large fluoro-apatite vein that is host to a resource of phosphate, rare earth elements and uranium. It has the potential to be the worlds largest mine and highest grade of its type." (Arafura web site)
Chairman Peter Walker said, “Nolans Bore is clearly a major deposit by world standards containing over 575,000 tonnes of REO, 2.6 million tonnes of phosphate and 8.7 million pounds of U3O8”. (WED AGM)
-Within 5 km of a gas line -Within 15 km off a major highway -Within 60 km off the rail line -Feasibility 2006 -~80% recovery expected on REO and U -Processing rate = 500,000 tpa -Small grinding process and acid digestion -Mining rate @ 500ktpa -Strip Ratio -0.5 : 1 -No overburden -No waste in first 3 yrs -REO con (50%) @ US$1.75/lb= A$200/tn in ore -Uranium @ US$20/lb= A$20/tn in ore -Capital cost A$100m -Operating cost of A$50m pa ($100/tn ore) -80% recovery, hurdle rate 8%, A/US 0.75 -REO metal 15,000 tpa -Uranium 150 tpa -Revenue A$88m pa -NPV @ 8% = >A$250m & IRR >25% -payback of <5 years -EBIT +A$25m pa -Mine life +30 years ***Should turn out larger than even these figures. ***These figures are very conservative; eg U308 at US$20/lb when going rate today is US$34.25/lb ***Capital cost used to be estimated at $40m, $100m is a big jump but I suppose if you are playing with uranium it is going to get expensive (environ and security). ***Arafura quote good long term figures that will not lead you astray. ***Nolans is now big enough Arafura could/ can go to market without Chinese (extra profit in our pockets again)...
Resource >$5.0 billion? -Size is no longer an issue, it is big. -Waiting now on metwork from ANSTO, BUT; "The results of the test-work have recently been received and have determined that nitric acid is an effective process route for the digestion and processing of Nolans apatite rock and for the recovery of fertiliser, rare earth elements and uranium products. However the process flowchart used by Yara is specifically designed and optimised for low REO, low uranium, and low silicate Kola ore and is not optimised for Nolans Bore ore types." * Code for 'we can get out of paying royalties too...'? http://stocknessmonster.com/news-item?S=ARU&E=ASX&N=287793 -ANSTO also has a 'mini me' REO plant.
MARKET --RARE EARTHS Contrary to a few posts that I have seen around, the price for Rare Earths is not going down. From Arafura 2005 Annual report. "...China has recently made several changes in regulations in the rare earth market. Strict environmental controls on operations, strict operating safety standards, and the removal of VAT tax protections means that the rare earth producers in China are now more open to free-market influences. The changes saw a restriction in supply as operations were shut to improve producers’ environmental performance and compliance. The removal of tax relief resulted in prices increasing by almost 25%..." Arafura have a high grade mix of REO, refer Annual report.
--URANIUM I think everyone knows what is going on here, price is currently US$34.25/lb. I believe consensus is it will go up significantly.
--PHOSPHATE This is a difficult one to put a finger on, prices for phosphate will definately go up but this is more due to the impact of oil and gas prices. Not really a major issue as Arafura will just about give this stuff away (if you have been to a phosphate plant you will know they are big and expensive). I still stick to these comments from previous; "...Nolans has NPK phosphate which gets used in Asia more than Oz, Arafura had an agreement of sorts with Yara from Norway. Yara gets its materials from Russia and then sends the end product to Asia, imagine freight costs associated with that! Arafura is in a prime spot to send the stuff straight up north and into Asia..." Australia will also be getting phosphate from Nauru as it is much closer than alternative (phosphate) sources in north-west Africa (how much you going to be paying next year Yc). --THORIUM No concrete figures are given for this, it was quoted at approx 10 x U308, so 90m lbs may be realistic. Confusion reigns supreme over the current price, however there is no doubt that it is going to be part of the energy mix. Dont be surprised if Nolans gets off the ground sales of this pop out of nowhere.
MISC I would not be surprised if Nolans become a plant that processed uranium from many parts of NT. Certainly Yalyirimbi and Lagoon Crk would be posibilities, as would other regional uranium targets.
Technical report and 2004 drilling results http://www.arafuraresources.com.au/NolansB...stimateJGMk.rtf
What are Rare Earths? http://arafuraresources.com.au/documents/O...eEarths_000.pdf
DO PEOPLE TAKE IT SERIOUSLY? Well governments do... -Govt publication (pretty much all Arafura). http://www.aph.gov.au/house/house_news/mag...h24_Nuclear.pdf
-The House of Representatives Standing Committee on Industry and Resources inquiry "The Committee will receive evidence from six uranium exploration companies that have figured prominently in recent market interest in uranium, including Nova Energy, Arafura Resources, Deep Yellow and Paladin Resources. The Committee will also be hearing from the Areva Group, which is the world’s only corporation operating in every stage of the nuclear fuel cycle. Areva is the world’s second largest producer of uranium, with around 20 per cent of global market share. Areva has uranium exploration interests in the Northern Territory and South Australia."
-Part of NT Hansard 11 Oct 2005 (Mr VATSKALIS (Mines and Energy)) http://notes.nt.gov.au/lant/hansard/hansar...AC?opendocument "...Another point I wish to reiterate is that we view our clients as our business partners. Companies like Arafura Resources, Compass Resources, Northern Gold, Matilda Minerals, Olympic Resources and Territory Iron address many people who are here to sell their projects. In selling their projects they also sell the Territory. By working together with our clients, and arming them with the tools to promote the Territory in their presentation and annual reports we develop an excellent group of ambassadors and enormous coverage. Moreover, I would like to extend the promotion of the Territory's potential to overseas audiences next year, and meet with a number of prospectors and developers in international forums and also attend some exhibitions and conventions, especially in Canada, which are attended by hundreds of delegates from all over the world. I also propose to meet with Canadian-based companies operating in the Northern Territory..."
-And of course Alistair Stephens fired up the whole NT Nuclear Waste debate (guess that is why Peter Walker is the NT man lol..). "It was at one of these hearings in Perth Western Australia that Arafura Resources chief Alistair Stephens, one of the uranium mining companies supporting an expansion of uranium mining, told the Federal Parliamentary committee that, “Australia could be the best place for waste storage given our ideal geological locations, political stability and responsible attitudes.”
This claim has subsequently picked up and supported by a number of people, most notable being the former Labor Prime Minister Bob Hawke who said Australia should become the dumping ground for the world's nuclear waste.
He has been supported by the federal Science Minister, Brendan Nelson, who says there is some merit in former Labor Prime Minister Bob Hawke's call for Australia to store the world's nuclear waste.
WA Federal MP Dennis Jensen has also joined calls for storing nuclear waste in Australia after former Prime Minister Bob Hawke put the issue back on the agenda.
He was backed by State Liberal shadow lands minister Ken Baston who said his party could not sit on the fence on the issue. He said if Australia was going to export uranium it should be looking at making it a nuclear dump.
Federal member for O'Connor Wilson Tuckey also said he was not frightened of storing nuclear waste in Australia." http://perth.indymedia.org/index.php?actio...arentview=13782
SOME IN THE MARKET DO Patersons Fortune Fifteen by Tony Locantro http://integramining.com.au/web/investment...nUpdate0504.pdf
And of Course the Speculator from 'The Bulletin' agrees that this may be a reasonable investment. http://bulletin.ninemsn.com.au/bulletin/si...ate=domBulletin.
************ 8.7 million pounds of U3O8 JORC (Current In Situ Value >$500,000,000) Technical report and 2004 drilling results http://www.arafuraresources.com.au/NolansB...stimateJGMk.rtf
LAGOON CREEK--- NUMERO UNO SPECCIE U PLAY IN OZ, IMO. ********************************************** JV with Laramide (TSX.LAM.V). When this JV was announce the Arafura S/p did not move, Laramide went up significantly and for a long time. http://arafuraresources.com.au/documents/U...FactSheetDD.pdf http://arafuraresources.com.au/documents/R...reekUranium.pdf http://www.arafuraresources.com.au/documen...ofAgreement.pdf
"The Lagoon Creek uranium-gold prospect is located 400 km north east of Tennant Creek, Northern Territory, near the Queensland border. The host rocks and geological structures in Lagoon Creek area are similar to those in the nearby Queensland Westmoreland deposits, which are reported to host over 20,000 tonnes of contained U3O8. Prospectors in the 1970s mined narrow high-grade uranium lodes at Lagoon Creek. Previous exploration has defined mineralisation grading 2.4% U3O8 and 6.7 g/t Au over intervals of 1 to 20 metres. A joint venture agreement with Laramide Resources Ltd allows Laramide to farm-in to Lagoon Creek Prospect. Exploration using modern techniques will be used to delineate further extensions to known mineralisation and identify new targets for exploration."
****HOW PROSPECTIVE IS THIS AREA?**** Arafura are pretty modest folk and they say; "Previous exploration has defined mineralisation grading 2.4% U3O8 and 6.7 g/t Au over intervals of 1 to 20 metres." Now I think 2.4% is heading in the right direction (hopefully end those posts complaining about bad grades at Nolans). --One has to remember these were the days when drill holes went straight down, rather than the 60deg we see now.
BUT *****MAKE SURE YOU GO TO THE LOO BEFORE READING ON, I DONT WANT ANYONE WETTING THEMSELVES**** --Pandanus Creek/Eva is an old 'mine' south of Lagoon Crk but still in the Westmoreland region. "The uranium ore at Pandanus Creek was hand picked and trucked to Rum Jungle for treatment. The mine operated from 1960 to 1962, extracting about 3,300 tonnes of ore at an average grade of 1.8%, hand sorted to about 306 tonnes of concentrate at the extraordinary grade of 8.37%, producing a total of 26.1 tonnes of U3O8. The mine was developed underground to a depth of 83 feet (25.3 metres)". **Hand Picked.... Hand sorted...wonder where Workcover was...lol *** THEN "The spoil dump contains approximately 3,000 tonnes of of rock averaging over 1% U3O8 (about 30 tonnes U3O8)" ***THIS IS SPOIL!!!! http://www.sea-us.org.au/oldmines/ntabando...#PandanusCrkEva
--Cobar 2 is right on the Northern border of Lagoon Creek. It was not really a mine, more of a scratching, but did have some interesting grades... (The decimals are in the right spot). "The quantity of ore mined was about 78 tonnes with the extraordinary average grade of 10.52% U3O8, to produce about 8.2 tonnes of U3O8" http://www.sea-us.org.au/oldmines/ntabandoned.html#Cobar2 --Now we are heading into the grades I like the sound of 10.52%, yep that should be ok....
****Now there are no guarantees in this game, but as I think we are getting a bat at this for no cost (certainly not built into SP) and I can have these grades to the North and South, plus 40m lbs to the east then I am pretty comfortable with that.
This is very very very important for Laramide, they have >40 million pounds U308 sitting across the border in QLD. The QLD Govt is not about to let them start digging it up. If Laramide can get a mine going in NT then they can wait out QLD state govts.
Laramide have done the airbourne, have (or had) people on the ground (YES; ON THE GROUND) and will drill 2000mtr by mid next year. http://www.laramide.com/corporate/pres/LAM...ntation2005.pdf What do Laramide want to do 2005-06? --Compile all available public information on project areas. --Complete 20,000 km airborne magnetic and radiometric survey (done). –---100 meter flight line. Awaiting processing and targeting. ---–Geophysical program to guide 2006 program with pipeline of projects. -Mobilize field crews to project area (Sept 2005). ---–Exploration to focus on NT. Sampling and geological mapping
Part of the agreement was that Laramide had to be able to raise "A$4,000,000 within 90 days to consummate the agreement.".... What did Laramide raise... OVER $13,000,000
Are they excited about it? "URANIUM BULL MARKET - Perspective of a Canadian Junior Developer" http://www.laramide.com/corporate/pres/may2005analyst.htm
So I think we can class Lagoon Creek as a pretty reasonable low cost entry to the world of uranium exploration.
YALYIRIMBI ************************************ I was not overly excited about this area when Arafura announced the lease, since then we have had more info come to light and I have changed my mind somewhat. (As this page is getting bigger than anticipated I will use this for all the leases around here). http://arafuraresources.com.au/documents/Y...iUPotential.pdf http://arafuraresources.com.au/documents/Y...mbiPosterDD.pdf
"The Yalyirimbi prospect is located adjacent to Nolans Bore which is situated 135 km north of Alice Springs, Northern Territory. Initial exploration of the area has identified a number of individual prospects in the intrusive complex which contain significant grades of uranium mineralisation. The results include 940 ppm U3O8 at Gidyea Creek, 800 ppm U3O8 at Day Creek and 940 ppm U3O8 at Napperby Creek prospect. The presence of uranium-bearing source rocks, uranium mineralisation in prospects near the granite, and the composition and proximity of alluvial sediment sequences, all indicate that the tenement is highly prospective. Uranium targets include reduction-oxidation and calcrete styles in sedimentary rocks, as well as, Mary Kathleen style uranium mineralisation." -For Arafura to use the term 'significant' read that as us blokes would be jumping up and down.
No one will know what is here until the drills are put into the ground, what we can say is that if anything is found we will have a plant at Nolans that will be able to process it, hence very little capex. And hence we will be able to afford grades that others can not. One of the best items I have seen on this area is Gonnfishing's 'magnetic type image' of Napperby via SIM (thanks Gf, it is a ripper), I suggest if you have not seen it take a peek. http://tinypic.com/fkqjwm.jpg Like Gonnfishing, I would not be surprised to find that this is the host for Nolans and Napperby (DYL) uranium, again drilling will prove it one way or the other.
I would certainly class this are as prospective for uranium, would I invest in Yalyirimbi without Nolans? NO, Nolans removes a lot of risk from this play (and I am a pretty conservative sort of bloke).
SUMMARY I do not know of another spec stock on the ASX that has such exposue to uranium in the NT. Arafura have a massive amount of land, as at mid this year the only company with more uranium ground was Cameco. http://www.ecnt.org/pdf/mining_2005_07_08.pdf There are 8 projects; Nolans with over 8mill lbs, 1 in an absolute prime area, the other 7 are as good a ground as most exploration plays offer and more in qty. Mid next year we are going to be having a lot of entertainment, and the ARU thread may get a bit overwhelming.
IS ARAFURA TAKEN SERIOUSLY AS A URANIUM EXPLORER? Government seems pretty keen on them. -Govt publication (pretty much all Arafura). http://www.aph.gov.au/house/house_news/mag...h24_Nuclear.pdf
-The House of Representatives Standing Committee on Industry and Resources inquiry "The Committee will receive evidence from six uranium exploration companies that have figured prominently in recent market interest in uranium, including Nova Energy, Arafura Resources, Deep Yellow and Paladin Resources. The Committee will also be hearing from the Areva Group, which is the world’s only corporation operating in every stage of the nuclear fuel cycle. Areva is the world’s second largest producer of uranium, with around 20 per cent of global market share. Areva has uranium exploration interests in the Northern Territory and South Australia."
PINE CREEK TENEMENTS (Mt Porter & Frances Creek). MT PORTER "Mt Porter is located about 170 kilometres southeast of Darwin or 10 kilometres north of Pine creek. The Union Reef mill is 15 kilometers north of the prospect. The current ore resources, calculated using a 1.7g/t Au cut-off, are classified into indicated resources (300,000 tonnes at 3.1 g/t Au) and inferred resources (55,000 tonnes at 2.6 g/t Au) for a total of 355,000 tonnes at 3.0 g/t Au. The total contained gold is 34,200 ounces. The total identified mineral resource using a 0.5 g/t Au cut-off is 878,000 tonnes at 1.9 g/t Au or 53,100 ounces." (Arafura Website).
Notice of Intent lodged http://www.arafuraresources.com.au/pdfs/Pr...r%200362004.pdf
-Native title ok'd http://www.arafuraresources.com.au/pdfs/Pr...20NTT%20NLC.pdf "Native title groups and listed mining company Arafura Resources NL have reached agreement so the company can be granted a mining tenement, Mineral Lease 23839, over the Mt Porter gold deposit, near Pine Creek."
-PER work started. http://www.nreta.nt.gov.au/whatwedo/enviro...r/mtportergold/
This project is waiting on Union Reef Mill, this should happen 2006. GBS (TSX) have plenty of $$$ to get show on the road.
FRANCES CREEK Map (3.817M) http://arafuraresources.com.au/documents/F...RANCESCREEK.pdf
(From Arafura website). "The Frances Creek prospects are located 5 kilometers north-east of Mt Porter. The mineralization is associated with ferruginous quarts veins and crops out over a strike length of 2.5 kilometers. Drilling has defined high grade intersections above 10.0 g/t Au up to widths of one to five metres and a strike length of 390 metres. The drilling has only tested mineralization down to 30 meters below the surface and an extension of these high grades at depth is very promising." **This area has high grade small deposits, not a super pit but important and valuable all the same. I like how they say "...high grade intersections above 10.0 g/t Au...", when in fact intersections have been as high as 19.1 g/t... now is that conservative...
Frances Creek is prospective for vein style gold deposits and iron ore. Rock chip sampling has returned up to 54g/t Au.
http://www.arafuraresources.com.au/pdfs/Pr...es%20Ck%202.pdf Golden Honcho 5 metres at 19.1 g/t Au from 30 metres in FCRC053 3 metres at 11.0 g/t Au from 17 metres in FCRC052 3 metres at 10.1 g/t Au from 14 metres in FCRC029 3 metres at 9.25 g/t Au from 29 metres in FCRC051 2 metres at 13.3 g/t Au from 22 metres in FCRC031 2 metres at 9.48 g/t Au from 33 metres in FCRC037 Golden Slips 2 metres at 6.39 g/t Au from 12 metres in FCRC041. AND; "Arafura`s Chairman Mr Peter Walker in commenting on the drilling results stated “The intersections in holes FCRC 051 to 053 were particularly encouraging as they indicate depth continuity. For example, the 3 metre intersection at 9.25 g/t in FCRC051 is directly below the 3 metre intersection of 10.1 g/t in hole FCRC029, and the 5 metres at 19.1 g/t in FCRC053 is directly below the 3 metres at 11 g/t in hole FCRC052”."
"Drilling to date has covered a combined strike length of some 390 metres out of a total strike length of 2,400 metres of mineralised reefs at the prospect. The Golden Honcho deposit is open along strike to both north and south and at depth."
-One would think that it should not be too difficult to get approvals on this were Mt Porter to go ahead. -Frances Creek is open to become much larger. -Neither of these need large capex, should Arafura toll treat.
My personal view is that these may be sold off to someone like GBS, it would (imo) be preferable to keep them and go from explorer to producer, but cash in hand may be of more immediate benefit to Arafura. However it Would be good to get a couple of more high grade drill holes to cheer on the price a bit. It is potentially and physically bigger than I had realised.
KURINELLI This is the one that many of us are hanging out for, the real potential exists for this to be the company maker. When Arafura was first listed Peter Walker used to say it was the sleeper. Now days Arafura does not even mention the potential of Mt Porter and Frances Creek in the slides, it is all Kurinelli... eg: http://arafuraresources.com.au/documents/GoldFactSheetDD.pdf "Arafura Resources NL has a major ground position centred on the historic Kurinelli goldfield, which is located 150 kms south east of Tennant Creek in Australia’s Northern Territory. The Kurinelli project offers a unique opportunity to explore a goldfield that has not been the subject of modern, systematic exploration. Geochemical soil sampling results are very encouraging, defining six gold anomalies. The largest anomaly is over four kms long."
"history The Kurinelli goldfield has had limited geological exploration due to the tenement situation, which restricted tenure to individual prospectors only, mostly working with metal detectors. The region was first discovered in the 1890s but has never been systematically explored using modern exploration techniques. Over the last ten years prospectors have officially collected almost 5,000 ounces of gold. Nuggets up to 20 cm have been recorded and all gold is associated with quartz veins in a dolerite host." "current exploration Arafura Resources firstly collated aeromagnetic data of the Kurinelli area. The geophysical data was used to interpret an extensive, discrete geological entity that envelopes all the known Kurinelli mineralisation. A program of sampling on a 250 x 50 metre spacing has taken place. Three sites returned values in excess of 1000 ppb Au (1g/t Au) while 22 sites returned results between 100-1000 ppb Au and 259 sites returned results between 10-100 ppb Au. Strong gold anomalism with peak results to 2340 ppb Au (2.34 g/t Au) has been identified in the sampling over basement metadolerite rocks. This anomalism extends over line lengths of 250 metres (average 626 ppb Au) and 350 metres (average 474 ppb Au) on adjacent EW sample lines through the anomalous zones are off-set by about 500 metres."
-5000 oz removed by amatuer prospectors. -Nuggets up to 20cm... (wish I found those..)...
http://www.arafuraresources.com.au/pdfs/Pr...%2022112004.pdf "Our secondary focus is on our gold properties. We have now received all the results from the Kurinelli geochemical program. The results are highly encouraging with a core gold zone over 15 Km2 in areas with numerous other smaller discrete anomalies. Substantial follow up programs are necessary to define and test these anomalies which have exceeded our expectations in all respects. To conserve our funds we will be offering the opportunity to participate in this program to a major gold mining company." KEEP THEM MAJOR GOLD MINING COMPANIES AWAY...... We need a few drill holes to convince everyone not to take the offer from this "major gold mining company" coz if it is any size they will want the whole lot.
"Until recently the Kurinelli field was covered by a reserve which precluded company exploration. Arafura has the major ground position at Kurinelli with a land holding of approximately 1500 Sq Km."
LAGOON CREEK---Yep, has gold potential too. **********************************************
"The Lagoon Creek uranium-gold prospect is located 400 km north east of Tennant Creek, Northern Territory, near the Queensland border.... .....Previous exploration has defined mineralisation grading 2.4% U3O8 and 6.7 g/t Au over intervals of 1 to 20 metres. Gold mineralisation has gone up to 12g/t.
This is very very very important for Laramide (on the uranium front), they have >40 million pounds U308 sitting across the border in QLD. The QLD Govt is not about to let them start digging it up. If Laramide can get a mine going in NT then they can wait out QLD state govts. However it is also of a benefit for the gold.
ARU Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
(20min delay)