minesite news article

7th June

The next few weeks could get quite interesting for shareholders in Forte Energy, never mind that the uranium markets are still reeling from aftershocks of Fukushima. Forte has two key areas of operations, Mauritania and Guinea, and newsflow from both is now getting imminent.

First will come a resource update on the company?s A238 uranium anomaly in Mauritania. It hasn?t all be plain sailing for Forte in Mauritania, but after a fairly long haul the company now looks to be just about ready to tie all the previously published results together and come out with a resource that will point the way towards an economic project and a development decision. Previous company statements have said the new resource will be ready by the end of the second quarter of this year. It may come earlier, but it?s more important to get it right than to hurry it along. Either way, Forte chief executive Mark Reilly sounds quietly confident about his ability to move the company on to the next stage in Mauretania. ?We?re hoping that this resource will be the economic trigger for us to continue our regional plans." The implicit message is that Forte has plenty of other Mauritanian ground, and once it has secured a meaningful foothold it will start to look for further opportunities.

That?s the wider goal. In the nearer term, once the drilling season starts up again in August or September time, Mark says he?ll get the rigs turning in Mauritania once again and will also initiate detailed metallurgical work as well. He?s understandably cautious about just what he?s willing to say about his precise plans ahead of the resource update, but having raised A$15 million earlier in the year Forte isn?t short of the wherewithal to move ahead.

A significant chunk of that cash, however, will go into the company?s other key project, Firawa in Guinea, which is now moving through the pre-feasibility stage. To date Firawa has primarily been a uranium story, but it?s beginning to attract attention as a rare earths play too, as the company has commissioned new assays on old core, and the results have begun to trickle in. Indeed, Firawa will be the source of the news update that follows on from the Mauritanian resource, as further rare earth element assays are due.

Exactly how the rare earths will end up fitting into the picture at Firawa remains to be seen, though. There?s already 17.7 million tonnes of ore grading 296 parts per million (ppm) U3O8 at a 100 ppm cut-off, but Mark is hoping to increase that resource when the next drilling season gets underway in Guinea. By then, with the pre-feasibility study due for completion in the third quarter of this year, and with the possibility of JORC numbers for the rare earths too, the potential value of Firawa may be significantly greater.

And there?s no doubt that the world is crying out for new rare earths deposits as the Chinese suck in supply, and Forte has already demonstrated that it is in a position to think about meeting the increasing demand. The most recent rare earths assays from Firawa included six metres at 2.83% total rare earth oxides (TREO), six metres at 1.13% TREO, and five metres at 1.37% TREO. Given that this ground is in any case quite likely to deliver up an economic uranium resource the real questions relate to processing, but we?ll have to wait - firstly for the assays and the rare earths resource number and secondly for the Firawa pre-feasibility study to give a more detailed indication of the mining potential for uranium.

But if the rare earths are likely to add spice, Mark is hopeful that Firawa will actually be a straightforward enough operation as far as the economics are concerned. ?Based on the plans we already have for Firawa, we?re aiming for it to be at the lower end of the cost curve, to produce at less than US$25 per pound.? And although the uranium market has taken some serious knocks in the wake of the Fukushima incident, the price is still way ahead of that level and should allow the company plenty of room for manoeuvre and for it to play around with a few ideas as regards rare earths.

What?s more, Mark remains upbeat about the long-term outlook for uranium. ?No-one has presented any tangible evidence that nuclear is going away?, he says. ?You?ve seen China indicate to the world that they?re pushing on. And a Russian company has just taken out the Australian company Mantra for a reasonable price.? That company was JSC Atomredmetzoloto, and although the price was slightly shaved after Fukushima, the feeling was that in the end all parties did well. Forte?s a long way from that sort of result, but the uranium sector is still alive and kicking, and looking for more good news stories. With any luck Forte will soon deliver some