THE resurrection and potential production of a Namibian uranium project that one of the world's biggest mining houses walked away from 25 years ago is showing real promise among the plethora of new uranium hopefuls. By Mark Mentiplay, RESOURCESTOCKS*.
Uranium oxide samples
A view of the landscape at West Australian Metals' Marenica uranium project in Namibia
West Australian Metals plans to begin drilling its Namibian uranium project within months with the objective of defining a JORC compliant resource containing 8000 tonnes of uranium oxide before the end of the year.
WA Metals technical director and acting chief executive Leon Reisgys told RESOURCESTOCKS drilling on the Marenica Uranium Project was scheduled to begin in the next quarter of this year, the latest phase of a fast-track process begun only last year to validate and build the resource previously outlined by international precious metals major Gold Fields.
Back in April 2006, WA Metals executed an agreement to acquire 80% of the highly prospective Marenica project by spending $A335,000 on exploration. The remaining 20% is held by a Namibian citizen, who will be free carried through to a decision to mine. In light of current uranium prices, the existing resource, the project's geological signature and proximity to two major uranium mines, the entry price seems very attractive.
Gold Fields had previously estimated a palaeochannel related resource of around 40 million tonnes at 200 parts per million equivalent uranium oxide (eU3O8), containing 8000t (about 18 million pounds) of eU3O8 based on extensive exploration, including 32,000m of drilling.
Although not JORC code compliant (it didn't exist then), the estimate and uranium inventory summary was prepared and submitted to the Nuclear Development Corp of South Africa and conformed with the then internationally accepted protocol for reporting uranium mineralisation to the International Atomic Energy Agency.
Higher-grade zones within the mineralisation included 9.7m at 980ppm eU3O8, 8.1m at 500ppm eU3O8, 11.7m at 240ppm eU3O8 and 3m at 754ppm eU3O8.
The resource was found within the eastern half of the over 700 square kilometres now controlled by WA Metals in shallow palaeochannels and weathered basement rocks to a maximum depth of just 20m.
But the area explored by Gold Fields covered only 30% of WA Metals' exploration licence and did not include about 25km of the major Marenica palaeochannel interpreted to traverse the project area.
"I'm pretty confident about the Gold Fields work and have no reason to doubt the integrity of their data or numbers," Reisgys said.
"But they do require validation and that's what we have been doing over the last few months via trench, pit and rock geochemical sampling, radiometry and inputting historical data. The results are encouraging and confirm the presence of significant and widespread areas of near surface uranium mineralisation.
"I expect there will be higher grade resources within those outlined by Gold Fields, which we will target sooner, rather than later. That's what the drilling will be aimed at, as well as targeting other areas," he said.
Coupled with a low-cost entry project, WA Metals is nicely cashed up to the tune of about $2.5 million following a recent $1.9 million capital raising.
And the Marenica Uranium Project has a couple of successful, high profile neighbours. The Rio Tinto operated Rossing uranium mine, 60km to the south, has been in production since the late 1970s and produces about 6% of the world's uranium oxide.
About 100km to the southeast, just beyond the Rossing mine, is Paladin Resources' Langer Heinrich mine, 32Mt at 700ppm U3O8, which began production at the end of last year in its run-up to 1180tpa uranium oxide over a minimum 17 years.
Reisgys said the Marenica mineralisation is similar to the Langer Heinrich palaeochannel type uranium mineralisation and the licence prospective for Rossing style mineralisation. Although lower in grade, the Marenica resource shows significant amounts of uranium mineralisation and abundant scope to define higher grade zones.
It is also only 90km northeast of the town and deepwater port of Walvis Bay.
The Marenica uranium mineralisation was discovered in the 1970s, along with a number of other significant uranium bearing palaeochannels in the same province, including Langer Heinrich.
Gold Fields of South Africa Ltd completed around 32,000m of project drilling in more than 2000 holes, focused on the northeastern sector where airborne radiometrics, wide spaced trenching and pitting located four major uranium anomalies (Anomalies 1-4) covering about 7sq.km. Uranium mineralisation was also reported between and adjoining Anomalies 1-4, within a broader airborne radiometric anomaly covering about 18sq.km. The four major anomalies were investigated by detailed geophysics and drilling. Closer spaced drilling, in places down to 40m by 40m, was undertaken to a depth of 35m with holes radiometrically probed to allow log-based grades to be calculated.
Exploration work on the project by Gold Fields ceased in 1982 as a result of depressed uranium prices – less than a third of what they are now – and in 1999 the company merged with Anglo Gold to focus on gold.
But there is no doubting the intensity and focus of the exploration up to 1982.
"Nothing has been done there for 25 years, but there is no doubt Gold Fields did a hell of a lot of work on this project, one suspects with a view to completing a feasibility study," Reisgys said.
The drilling by Gold Fields was focused largely on the testing of radiometric anomalies defined by airborne and surface surveys – the more easily identifiable surface/near-surface uranium occurrences.
Trial radon surveys by Gold Fields over areas suspected of hosting uranium mineralisation beneath surface cover reported anomalies over areas with little or no surface radiometric anomalism.
"Exploration technology has also improved greatly over the last 25 years, particularly airborne geophysical surveys, which have shown to be very important in South Australia for defining palaeochannels."
WA Metals has completed the first phase of a program to locate old drillholes, channel sampling of trenches, surface rock sampling, geological prospecting, structural interpretation using satellite imagery and further processing and reinterpretation of geophysical data flown by the Namibian Ministry of Mines in 1995, along with its own radiometrics flown late last year.
The program, concentrated on Anomalies 1-4 and to the immediate west extension of the 25km long Marenica palaeochannel, was aimed at confirming new and known uranium bearing areas, and identifying potentially higher-grade zones for future exploration including drilling.
The company has confirmed the presence of previously identified mineralisation and is assessing the prospectivity of targets outside the previously drilled areas. The immediate upcoming phase of exploration will include radon surveys to identify potential uranium mineralised zones below sterile sedimentary cover, and compiling of all work to generate drilling targets, including possible radiometrical relogging of old drillholes.
Drilling to both confirm and extend previously outlined mineralisation within the Anomalies 1-4 area, as well scout drilling of newly defined targets to the west in the Marenica palaeochannel system, is being planned.
Metallurgical testwork carried out by Gold Fields has indicated that mineralised material from Marenica can be treated using conventional processing techniques to achieve high uranium recoveries.
Perth-based RM Capital's RM Research says excellent potential exists for the discovery of further mineralisation within 25km of strike of the Marenica palaeochannel downstream of the defined resource.
The analyst has put a "speculative buy" tag on WA Metals and considers, given its capitalisation of around $55 million fully diluted after its recent capital raising, it provides a compelling alternative to the likes of fellow Namibian uranium aspirant Bannerman Resources, with a capitalisation of around $200 million fully diluted.
* This report, first published in the February 2007 edition of RESOURCESTOCKS magazine, was commissioned by Western Metals
