Source: Ferret's Stock to Watch: CURNAMONA ENERGY LIMITED 09:49, Tuesday, 31 March 2009
URANIUM EXPLORER HAS FUNDS TO BUILD A TRIAL FIELD PLANT
Sydney - Monday - March 31: (RWE Aust Business News) ****************************************************
OVERVIEW ********
Shares of uranium explorer Curnamona Energy Ltd (ASX:CUY) rallied sharply yesterday in a belated reaction to last Thursday's announcement that it was all systems go on the Oban field trial. The company is 45 per cent owned by Havilah Resources NL. The latter company announced that the Mining and Rehabilitation Program (MARP) for the proposed Oban field trial has now been approved by South Australia's Primary Industries and Resources (PIRSA), an agency committed to the economic development of the state. The MARP is a comprehensive document that outlines the proposed field trial activities for uranium recovery on Retention Lease 123, the likely effects on the environment, required risk mitigation measures and final closure procedures. Subject to payment of a rehabilitation bond to PIRSA and procurement of several Environmental Protection Authority (EPA) approvals, including a Radiation Management Plan and a Radioactive Waste Management Plan, the field trial can proceed. In the meantime, negotiations are continuing for the design and construction of the field trial treatment plant with experienced consulting engineering groups. Following receipt of outstanding EPA approvals, Curnamona Energy will move as quickly as possible to construct the trial treatment plant and carry out the planned test work, for which it has the funds in hand. Subject to a successful outcome of the test, Curnamona Energy will then apply for a Mining Lease and proceed to obtain an Export Licence and other approvals required for commercial uranium mining. A proposal for a mining lease will require assessment under the Environment Protection and Biodiversity Conservation Act and the South Australian Mining Act to cover the situation of a full scale in situ recovery (ISR) mining operation. At the AGM back in December, chairman Dr Keith (Bob) Johnson told shareholders the company remains confident that the Oban resource will sustain a modest but very profitable in situ recovery operation for a number of years. "We have developed a good geological understanding of where to search for the sand hosted uranium deposits and throughout the year we have selectively acquired additional exploration ground in the Curnamona Craton where we believe the prospects are good for new uranium discoveries," Dr Johnson said. He told shareholders that uranium was one of the first commodities to be driven by the whims of speculators in recent times as first it rose to excessive heights, only to be dumped as these same speculators beat a hasty retreat barely twelve months later. The decimation of uranium stocks, including Curnamona Energy, has been completed by the present world financial market turmoil. "Yet ironically, the outlook for uranium has never been brighter, with large numbers of new nuclear power stations being constructed around the world and many more on the drawing boards," the chairman pointed out. Most Asian and European countries really have no choice but to build nuclear generating capacity if they are to meet their projected future power demands. Therefore, while uranium prices have weakened in the short term, the long-term outlook is strong as many new nuclear power plants come on stream. Curnamona said in its second-quarter activities and cash flow report that its focus was on in-situ recovery trial at Oban uranium deposit. Highlights included: * Advancing approval process for Oban in situ recovery trial; * Detailed design of trial treatment plant being studied; and * Exploration drilling further expands mineralisation at Oban. Curnamona invested considerable effort during the quarter in seeking approval from PIRSA for the MARP field trial. The MARP is a comprehensive document that must be approved by PIRSA before it will allow the ISR trial to proceed. It is required to include considerable technical information as well as base line monitoring surveys. It is a blueprint for the safe conduct of the ISR field trial operation and the subsequent rehabilitation upon completion. The timing for approval of the ISR field trial is still uncertain owing to the rigorous approval process applied by PIRSA. In the meantime, engineering design plans for the ISR trial treatment plant have been received from an Adelaide-based consulting engineering firm and work on cost estimates is underway. The Oban uranium discovery is hosted by a coarse-grained sandy palaeochannel aquifer, and the purpose of the ISR field trial is to demonstrate that the deposit is amenable to low cost extraction methods. Knowledge of the critical ISR recovery parameters, which the ISR field trial is also designed to establish, should allow publication of a resource for the Oban deposit. Curnamona Energy remains confident, based on its extensive drilling to date, that Oban contains sufficient sand hosted uranium to support a profitable ISR operation for many years.
SHARE PRICE MOVEMENTS *********************
Shares of Curnamona Energy yesterday rose 9.5c to 47c. Rolling high for the half year is 50c, struck yesterday in moderate trading. Low for the same period is 3.5c. The company has 66 million shares on issue with a market cap of $31 million. Drilling in outlying areas around Oban continued to identify significant uranium mineralization as previously reported in drillhole CEY376 which intersected more than 5m of uranium mineralisation (above 100ppm eU3O8) with a grade thickness of 0.28 metre per cent eU3O8. Curnamona Energy's primary objective is to commence the Oban field leach trial as soon as possible upon receipt of all required approvals. Concurrently it is planned to drill several promising uranium prospects in more remote areas to the north of Oban in the coming quarter, once suitable access and drilling water supplies are established. As at January 31 the company had available funds of about $7.7 million. Expenditure on exploration and related activities for the December quarter was $416,000 and is expected to be at a similar level for the current quarter.
BACKGROUND **********
Curnamona Energy joined the Australian Stock Exchange list on April 19, 2005. The company is an uranium explorer focused in the Curnamona Craton in South Australia with its major prospect the Oban deposit. The Oban prospect is located 60km north of the Honeymoon uranium deposit. Mineralisation is hosted by similar palaeochannel sand formation as Honeymoon and the recent Beverley Four Mile uranium discovery of Alliance Resources/Quasar Resources, with mineralised intervals up to 6.5m thick and grades up to 0.44pc eU3O8 discovered. Through its wholly owned subsidiary Oban Energy Pty Ltd, Curnamona Energy commenced the drilling program on the northern Yarramba Palaeochannel lying to the west of the Oban uranium deposit in February 2008. The company has defined an in-situ recovery uranium deposit at Oban potentially sufficient for several years production. The field leach trial is planned to start as soon as government permitting allows - with the company aiming for the first half of 2009. ENDS
CUY Price at posting:
47.0¢ Sentiment: Buy Disclosure: Held
