Full Text of Announcement 57 MILLION POUND URANIUM OXIDE RESOURCE REPORTED 56% INCREASE ON PREVIOUSLY REPORTED JORC RESOURCE
A revised and independently validated JORC compliant resource estimate has been modelled and calculated by Summit for the Valhalla uranium deposit in northwest Queensland. The uranium deposit is located 40 kilometres northwest of Mount Isa city on EPM9221.
The Valhalla uranium deposit is within the Isa Uranium Joint Venture Agreement ("IUJV") area where Summit is manager, operator and holds a 50% interest. Valhalla Uranium Limited's ("Valhalla") wholly owned subsidiary, Mt Isa Uranium Pty Ltd ("Mt Isa Uranium") is a 50% contributing participant to the IUJV.
The Valhalla Resource Statement is available in the attached report.
At 0.5lb/t (0.023%) uranium oxide ("U3O8") cut off grade a combined indicated and inferred resource of 33.3 million tonnes grading 1.70lb/t (0.077%) U3O8 the Valhalla resource totals 57.0 million pounds ("Mlb") or 25,900 tonnes of U3O8. This represents a 56% increase on the previously reported 1999 JORC compliant resource of 36.5Mlb at Valhalla.
Using a higher, 1.4lb/t (0.064%) U3O8, cut off grade there is a combined indicated and inferred resource of 16.3 million tonnes grading 2.50lb/t (0.113%) U3O8 for a total of 40.3Mlb or 18,600 tonnes of U3O8. This higher grade resource contains over 70% of the reported metal resource.
When compared to the previously reported 1999 resource estimate, the lower cut off grades used and lower resource grades reported are justified based on the significant improvement in the U3O8 price now approaching US$50lb. This has resulted in the resource tonnes reported being significantly increased from 11.5Mt to 33.3Mt.
Summit considers the lower 0.5lb/t (0.023%) U3O8 cut off grade now best approximates the economic cut off grade considering the size of the deposit, the fact the mineralisation outcrops, will be mined by open pit, treatment may include the use of radiometric ore sorters, the deposit's proximity to the city of Mount Isa and the access to mining infrastructure, supply and services.
At this stage there are insufficient vanadium oxide ("V2O5") assays within the mineralised block model to confidently estimate grades. Based on the available assays within the wireframe model V2O5 averages 2.36lb/t (0.11%) V2O5 in the 57Mlb resource and averages 2.75lb/t (0.13%) V2O5 in the higher grade 40.3Mlb resource.
Resource estimation consultants, Hellman & Schofield, have independently built a block model using the same data files and a similar global wireframe outline as Summit's resource estimate. Their resource estimate is within 4% of Summit's resource estimate as reported in this Valhalla Resource Statement.
The previously reported JORC compliant resource, in 1999, at Valhalla reported resources in the measured category as well as the indicated and inferred categories. The reason the measured category is not reported here, within the same mineralised block model, is a different level of compliance required by the 2004 Edition of the JORC Code, revised estimation methodology used in this Statement and now (higher) accepted conventions for reporting measured resources.
The purpose of the recent drilling at Valhalla has been to bring the resource within the mineralised envelope to a higher level of confidence and certainty, confirm the geologic controls, establish relevant cut off grades and revised tonnage estimates. This is to enable Summit to commence preliminary mine planning, mine design and treatment plant design studies leading to a bankable feasibility study.
The modelled resource at Valhalla remains open to the north and south along strike, and down plunge. Drilling will now be targeted at extending the resource along strike and down plunge.
Resource estimates are now being modeled and calculated for the Andersons, Skal (also within IUJV), and Mirrioola uranium deposits with drilling underway at Watta and Warwai. Further drilling is required at Bikini and Tjilpa to commence modeling and calculation of resource estimates. As all Summit's eight uranium deposits remain open, drilling will continue in 2006 and into 2007 on each of the Company's deposits to further expand and define the resources.
Alan J Eggers Summit Resources Limited PERTH 22 August 2006
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