Mineralogy May Now Be The Key To Unlocking Real Value At Uranex's Manyoni Project In Tanzania.
By Our Man in Oz / www.minesite.com
It's not often that mineralogy overtakes geology as the centrepiece for a mining investment story. But that's fast becoming the situation at Uranex, where the physical location of the uranium in its top ranked orebody could be about to make a world of commercial difference. Rather than being encased in the ore, or trapped in some chemical or physical way, the uranium at the company's Manyoni project in Tanzania appears to be coated around the outside of the sandy clay found in what's known as "playa" structures. To a layman that might be of little consequence. For mineral processing purposes it could mean everything.
Rather than requiring extensive crushing, grinding and separation in a series of tanks and other expensive items of equipment, as would be the case in most other projects, the Manyoni ore might best be treated by heap leaching - one of the easiest and cheapest mineral extraction routes known to the industry. At its simplest, and Uranex is yet to reveal any plant designs, a heap leach would involve minimal processing and then stacking and irrigating the ore with sulphuric acid. The uranium-rich run off liquid would then be trapped and concentrated.
For Minesite's Man in Oz, this talk of processing at Manyoni was one of the highlights of a personal visit to the company's head office in Melbourne. Initially planned as not much more than a social call, it turned out to be a delightful half-hour of discovery chatting to Uranexs non-executive chairman, Andrew Daley. A career mining man, Andrew was appropriately cautious with his enthusiasm, but there was an unmistakable sense of breakthrough in what he had to say about possibly lowering process costs, and as regards the recent upgrade in the resource at Manyoni.
Investors, who have been on a roller-coaster ride with ASX-listed Uranex over the past few years, are yet fully to grasp the significance of what's afoot at Manyoni, possibly because their attention has been diverted by regular management changes. Last year saw the departure of Terry Ward as chairman, and next month will see the retirement of managing director, John Cottle. Filling the gap, while a search is conducted for a new chief executive, is Andrew. And so it fell to Andrew to highlight the key facts in the Manyoni resource upgrade statement which was filed at the ASX on June 30th, but which wasn't widely reported at the time. " There are three key facts in that report," Andrew said. " First, that we have achieved a 53 per cent upgrade in the overall resource to 92 million tonnes containing 29 million pounds of U3O8. Secondly that much of the upgrade is in the C1 deposit which could have the potential to be a stand alone development without the need for satellite orebody development. And thirdly that heap leach treatment is starting to look quite attractive."
Before explaining those points in detail, a potted picture of the Manyoni project area is important. All of the uranium discovered so far is in playa structures. These are essentially ancient lake beds where heavy minerals, such as uranium, have been deposited after being washed down from surrounding mineralised granite. The ore is unconsolidated, which means it has not been compacted, and that it will be very easy to mine. Indeed, the word "gardening" might be an accurate term for stripping the top off a playa lake.
In the Manyoni area Uranex has identified a series of uranium-rich playa structures and tested them for mining purposes using cut-off grades of 150 parts per million (ppm) and 100 ppm. Until the June 30th upgrade announcement was made, the plan had been to mine a number of the playa systems, trucking the ore to a central processing plant. But with the C1 playa now known to contain 49 million tonnes of indicated and inferred resources, with 11.6 million tonnes in the higher rated indicated category, there should be sufficient material to start a heap-leach mine on C1 alone, given that this single resource boils down to 15.9 million pounds of uranium.
Andrew declined to talk costs. " Too early," he said. Nor could he be precise as to the timing of the next step: "We might need to do some more tests." But, what long-time followers of Uranex can take comfort from is that a preliminary feasibility study into a mine development should be completed around the end of the current September quarter, with a bankable feasibility wrapped up in the New Year. A back-of-the-envelope sketch of the future might well show Manyoni heading towards a first-stage operation producing between 500 and 700 tonnes of uranium a year from a very cost efficient plant.
With discussion of the resource upgrade out of the way Andrew flicked the switch to mineralogy, never a simple topic for investors, and Minesite's Man in Melbourne makes no claims to being an expert in mineral separation technology. However, what was described is a simple concept. It seems that as the uranium has been transported into the playa lakes it has formed a coating around the clay-like sand, also known as saprolite. The original treatment plan called for grinding, and treatment in an acid solution in tanks. Now it appears that minimal washing will be required of the material, which metallurgists are describing as quite unique.
More work is needed before Uranex can issue a "eureka" statement and tell the world more about the nature of the Manyoni ore and the relative ease with which the uranium can be extracted. But, one thing is clear, Manyoni is clearly at the top of the company's development plans, especially as mastery of the process could see it applied at other playa structures. Under that arrangement, there'd be no need to haul the ore to a central plant, instead a truck would transport the uranium in resin form to a central facility, a method already used at some mines in the US. All that needs to happen now is for the market to re-rate a company which has significantly expanded its resource base, focussed in on a single-site development to start production, and found a cost-cutting treatment method. Who said mineralogy was boring?
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