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i got this in my in box overnight. a few days old and SP has been higher each day in London.
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Unmasking uranium is juniors Forte

Michael Quinn, 22 September 2010
WEST African uranium explorer Forte Energy keeps it nice and simple when explaining why it very much likes what it sees in Guinea and Mauritania and why the company has strong claims for exploration success in both countries in upcoming campaigns.

Brad George, a geologist by profession and the AIM and ASX-listed Fortes new chief operating officer, is enthused by the large greenfield potential of Mauritania potential thats already being proved with the drill bit and the prospect of Forte significantly boosting the resource at its Firawa project in Guinea.

At Firawa Forte estimated a resource of 17.7 million tonnes grading 296ppm U3O8 for 11.6 million pounds of U3O8 last year, but thats only the start, according to George.

Firawa tends to be dismissed by some because of its size, George conceded, but thats a function of circumstances.

The resource drilling at Firawa was completed in the first half of 2009. A 6km structure was identified on surface, but due to terrain restrictions, only the middle 2.5km section was accessible for rigs at the time, and even then, drilling was only undertaken to a vertical depth of 80m because of time and budget constraints. The deposit is remarkably homogenous and is open in all directions; we just havent been back there.

This resource was only ever meant to be the start, but when preparations were underway to get back in for the next field season in late 2009, we had that dreadful civilian massacre in Guinea that pretty much shut the country down. However, the situation improved quite quickly, and the country became civil again around April-May 2010, but by then we had missed the field season. So a five month delay for political reasons actually resulted in an 18-month gap in work because of seasonal issues.

Extension drilling requires access to be dozed and we are organising that now, and we hope to be drilling in November or December. I wont put a target on the outcome, but I am confident we can multiply the size of this resources a few times.

George also contends Firawas grade is nothing to be frightened of, and flagged the possibility of producing an iron concentrate.

Uranium has the widest spread of economic grades of any commodity, from 100ppm to 200,000ppm, he pointed out to HighGrade. As a result, on first pass it is easy to get caught up in low grades, and forget that mining is and has always been a question of cost.

We have not done any economics on this yet, but will do soon, but in the meantime lets carry out a back of fag packet mental exercise. At a head grade of 300ppm and a recovery of 75%, 1t of Firawa ore will yield about 0.5lb of U3O8, so at current prices thats about $US25 in revenue.

I dont know what the costs are yet, but if we set a target of operating at a cash cost of less than $US25/lb, then that implies we have to find a way to mine and process this stuff for less than $US12.50/t. Can we do it? Again, we dont yet, but I think we stand a pretty good chance as there are many things in our favour.

They include HMS removal of iron that may increase head grade to 750ppm; a resource that is near surface and open-pittable, with thick intersections up to 80m and hence good bulk mining characteristics; a location on the side of a small ridge and so offering further decreases in our stripping ratio as well as giving us a gravity credit on haulage; soft, easy digging ore likely to require minimal blasting, and; the long 6km ridge, meaning we would mine along rather than down, and again, reduce our stripping ratio.

So, can we operate a simple open pit heap leach operation for less than $US12.50/t? Most such mines do indeed come in at less than this, but we shall see. I would certainly prefer to be trying to do this rather than some high grade deposit a mile underground.

In addition to that, we have begun to examine the possibility of iron credits. This is not something we talk about much as it is very firmly in the silly idea basket for the moment, but we are doing some work. After all, Firawa has an iron grade of about 30- 35%, making it higher grade than many iron mines. We dont want the iron as it interferes with the leaching of uranium and increases acid consumption, and so as we speak we have met tests underway to sort out simple gravity separation of the iron minerals upfront.

This increases the uranium grade, but of course it also increases the iron grade to the extent that we are likely to find ourselves the happy owners of perhaps 1Mt per year of concentrate grading about 60% iron. We have no idea if this would have a value as we dont have the rail system in place yet and are not yet sure if we can keep the phosphorous out of it, but given we will produce it for free, it seems worthwhile to expend a bit of effort in examining it more closely.

Meanwhile, Mauritania presents Forte with an altogether different opportunity.

While Guinea is a nice constrained discrete system that we know how to deal with in Mauritania we have 400km of strike of anomalous uranium bearing terrain, George said. Most of it is covered with sand and so blind to radiometrics, but seemingly every time we kick a bit away we find high grade uranium. Thats a lovely problem to have and it gets the geos very excited, but it does create a problem of where to focus limited resources.

A large drilling program was undertaken last season on the advanced Bin En Nar prospect and a number of greenfield projects. Ideally we should have got the results back in fast order, assessed our priorities and followed up with a second phase, but logistical issues saddled us with a five month turnaround in assays and so we didnt get that second round.

Bin En Nar turned out not to be as good as we thought, and certainly with the benefit of hindsight not our best target in Mauritania. But it took too long to realise that and the market quite rightly crucified us for it and ignored the last batch of drill assays which were spectacular we had a hole drilled in February, that came back with 80m at +400ppm from surface with the hole ending in mineralisation, and yet we were unable to get back to it because that result took five months to come in. Frustrating is the most polite word for it but we have drilling scheduled to start in Mauritania early next month, and that intersection is first on the list.

George also believes the logistical issues that stymied the last Mauritanian campaign wont impact this time round.

Last season we were shipping samples all over Africa, while this season we have pre-prep labs in country promising turnaround in days rather than weeks and months, he said.

With regards perceptions of sovereign risk in Mauritania and, in particular Guinea, George is sanguine.

Guinea has had a rough year on paper, but in reality, things actually improved quite quickly after the security issues earlier in the year, George said. The military stepped in quickly and calmed things down, and then commendably stepped back and let democratic elections proceed. That process is about to come to an end and all international observers have remarked on how fair and transparent it has been. It helps of course that a group of major companies are lined up to start perhaps the largest mineral investment boom in history.

Mauritania has an extremely stable political environment and is seeing right now a huge influx of money from the likes of Kinross and Xstrata. Apart from being a bit hot and having no pubs it is a splendid place to do business.

Both countries are poverty stricken but can see that they are on the cusp of major economic and social transformation. The big boys are lobbying like mad and all manner of western and eastern governments and development groups are poking about trying to ensure things are done responsibly and that neither country goes the way of the DRC. So yes, of course there is risk, but we are very happy to be a little barnacle hitching a free ride on the belly of these bigger players.