New Uranium District for Argentina’s Clean Energy Future
This profile is part of a paid investor education campaign.*
Blue Sky Uranium (TSXV:BSK;OTCGrey:BKUCF) is focused on acquiring, exploring and advancing a portfolio of surficial uranium properties in Argentina. The company currently has more than a combined 5,000 square kilometers of uranium tenements in the provinces of Rio Negro and Chubut.
The company has recently released a preliminary economic assessment (PEA) for the Ivana uranium-vanadium deposit. The report outlined an after-tax NVP (eight percent) of US$132.5 million, an after-tax IRR of 29.3 percent and an after-tax payback period of 2.4 years. Blue Sky has also completed metallurgical test work on a two-step recovery process that uses low environmental impact technology and reagents to optimize recovery. The overall recovery rate is 85 percent uranium and 53 percent vanadium.
Blue Sky is on the verge of proclaiming a new global uranium district as it continues to make discoveries in Argentina— a country with the most advanced nuclear energy sector in South America and no domestic uranium supply.
Nuclear power currently accounts for five percent of the nation’s energy. In May 2016, Argentine President Mauricio Macri’s announced a mandated that would push the country towards clean energy. The government is looking to reduce its carbon dioxide emissions by 15 percent by 2030. As part of that initiative, a fourth reactor is planned for construction in 2019 with two additional reactors now under proposal.
With no domestic supply of nuclear fuel Argentina pays approximately US$100 per pound in uranium imports, well above the current spot price. Hence, the government of Argentina is supportive of uranium exploration and exploitation projects as it looks to lower the costs of meeting its clean energy goals.
“We believe we are very well-positioned to be the first supplier of domestic uranium in Argentina,” said Blue Sky Uranium President and CEO Nikolaos Cacos.
Blue Sky Uranium is a member of the Grosso Group, which has a long-established reputation for success and a well-developed network of contacts throughout Argentina. Joseph Grosso, President and Founder of the Grosso Group, is an advisor to the company.
- Wholly-owned 350,000 hectares of uranium properties in the provinces of Rio Negro and Chubut, Argentina.
- Ivana PEA contains an after-tax NVP (eight percent) of US$132.5 million, an after-tax IRR of 29.3 percent and an after-tax payback period of 2.4 years.
- Metallurgical test work has an overall recovery rate of 85 percent uranium and 53 percent vanadium.
- Supportive government: Domestic uranium supplies needed for Argentina’s energy goals.
- Advanced nuclear industry with no domestic uranium production; paying close to US$100 per pound uranium for imports.
- Argentina plans to increase nuclear power’s position in the country’s energy mix from seven percent to 20 percent by 2025.
- Uranium surface production from identified discoveries has potential to support nuclear plants in Argentina within two years.
- Access to Grosso Group’s long-established contacts in various provinces and the internationally recognized, provincially owned INVAP—an Argentine company specializing in the design and construction of complex nuclear technological systems.
Key Project: Emerging Uranium District in Rio Negro, Argentina
Blue Sky Uranium’s exploration work is beginning to uncover the district-scale potential for uranium mineralization in the San Jorge Basin of Rio Negro, Brazil.
The San Jorge Basin is a flat lying, semi-arid environment located at an elevation of approximately 200 meters with an annual rainfall of less than 300 millimeters and a very low population density. The expansive region has had little to no exploration to date.
A well-maintained gravel road allows for year-round access to the properties. Regional infrastructure includes shallow groundwater, power and rail access as well as a deep-sea port within 200 kilometers of Blue Sky’s land package.
The company has already identified three uranium discoveries which are located in the same geologic environment along a 120-kilometer corridor: Anit, Santa Barbara and Ivana; and is now permitting several new targets within the region. These mineralized areas are not only near-surface and hosted in easy-to-recover sandstone, but also close enough together to serve as potential feeder zones for an integrated mine and centralized processing plant—representing the potential for a low cost in-situ mining operation.
In July 2016, Blue Sky announced the welcoming of well-respected geologist Guillermo Pensado as a technical consultant for the company’s new exploration campaign at its Rio Negro properties. The goal of the program will be to advance and integrate the Anit, Santa Barbara and Ivana discoveries into a combined exploration project and to delineate resources that could support a low-cost in-situ mining operation.
2018 Resource Estimate
In February 2019, Blue Sky released the results of a PEA for the Ivana uranium-vanadium deposit. The report outlined robust economics for a surficial mining operation with 13 years of uranium and vanadium production. The PEA has an after-tax NVP (eight percent) of US$132.5 million, an after-tax IRR of 29.3 percent and an after-tax payback period of 2.4 years.
“This PEA demonstrates that the Ivana deposit is a leading new low-cost uranium-vanadium development project,” said Cacos. “With the expansion upside at Ivana and the discovery potential for new uranium and vanadium resources throughout the district-scale property, we expect Amarillo Grande to continue to improve its value proposition.”
Additional exploration and engineering studies are expected to expand and upgrade the mineral resources. They will also optimize and enhance the economics of the Ivana deposit.
The Ivana discovery includes a seven-meter by four-meter enclosed basin within a 40-kilometer by 10-kilometer basin located on exploration licenses covering 1,300 hectares in the north-central Rio Negro. Uranium mineralization on the property is hosted mainly in the Gran Bajo del Gualicho formation, a favorable geological environment for large surficial-type uranium deposits similar to deposits in Western Australia and Namibia.
During an airborne radiometric survey, significant subsurface radioactivity in three zones were identified covering a combined area of approximately 2.2 square kilometers. Pit sampling at Ivana has shown strong near surface mineralization including 0.75 meters at 1.8 percent uranium.
Over the course of 2018, Blue Sky completed drilling work at the Ivana deposit with the goal of releasing a PEA. The drilling confirmed that the deposit extends for more than 1,000 meters to the south of the current resource area. The company also completed pit sampling and auger drilling to the west of the deposit. Highlights from the sampling program include 1.7 meters grading 5,032 ppm uranium and 323 ppm vanadium, two meters grading 1,881 ppm uranium and 640 ppm vanadium and two meters grading 1,082 ppm uranium and 503 ppm vanadium.
Blue Sky also conducted a metallurgical test work program at Ivana. The highly successful program optimized the recovery of uranium and vanadium in a simple two-stage process that uses low environmental impact technology and reagents. Stage one of the process provides approximately fourfold increase in the grades of uranium and vanadium mineralization for a recovery of 89 percent for both elements. Simple wet scrubbing and screening of raw mineralization also produces a leach feed concentrate with a 77 percent mass reduction.
Stage two of the process achieves recovery rate of 95 percent uranium and 60 percent vanadium for alkaline leaching of leach feed concentrate. The company has optimized the leaching process, requiring no added extra oxidants and no flotation. The process has an overall recovery rate of 85 percent uranium and 53 percent vanadium.
“These results indicate that Ivana mineralization can be processed using proven, simple and relatively inexpensive methods to achieve superior recoveries for both uranium and vanadium, which will make a significant contribution towards a very positive economic outlook for the project.” said Cacos.
The Anit discovery is a 15-kilometer long and up to 1.5-kilometer wide new surficial uranium discovery first identified by an airborne radiometric survey in 2007. Following the survey, Blue Sky’s technical team located several rock samples with visible uranium mineralization.
Blue Sky has completed a trenching program consisting of four excavator trenches totaling 1,403 meters at the Anit West and Central targets. Highlights from the results included:
- Trench 1: 358 meters averaging 0.052 percent uranium (U3O8) and 0.159 percent vanadium (V2O5)
- Trench 2: 114 meters averaging 0.019 percent U3O8 and 0.082 percent V2O5
- Trench 3: 375 meters averaging 0.040 percent U3O8 and 0.057 percent V2O5
- Trench 4: 91 meters averaging 0.066 percent U3O8 and 0.105 percent V2O5
Santa Barbara Discovery
The Santa Barbara discovery was made following hand-auger sampling in the area. The discovery includes a horizon of bright-yellow mineralization occurring in a flat-lying sheet with an average thickness of approximately 0.5 to 1 meter at a mere 0.5 to 1.5 meters below surface. Concentrations of uranium and vanadium from Santa Barbara range from 0.01 to 0.06 percent U3O8 and from 0.05 to 0.06 percent V2O5.
Other Argentina Properties—Chubut Province
In addition to its Rio Negro properties, Blue Sky holds two uranium prospective projects in the province of Chubut, Sierra Colonia and Tierras Coloradas. Like the Rio Negro properties, mineralization at both Sierra Colonia and Tierras Coloradas is hosted in sandstone and near-surface.
Highlights from grab samples taken from outcrops and hand pits at Sierra Colonia include:
- 6 samples were higher than 0.10 percent, including 0.65 percent U3O8 and 1.55 percent V2O5, 0.61 percent U3O8 and 0.80 percent V2O5, 0.53 percent U3O8 and 1.32 percent V2O5, 0.25 percent U3O8 and 0.65 percent V2O5, and 0.20 percent U3O8, 0.09 percent V2O5;
- 90 samples were higher than 0.01 percent U3O8; and
- 177 samples were lower than 0.01 percent U3O8.
Nikolaos Cacos, M.I.M.—President, CEO and Director
Nikolaos Cacos is one of the founders of the company with over 23 years of management expertise in the mineral exploration industry. He has extensive experience in providing strategic planning to and administration of public companies. Cacos serves as director and officer of several publicly traded companies. He holds a Master of International Management degree from Heidelberg, Germany and a Bachelor of Science degree from the University of British Columbia.
Darren C. Urquhart, C.A. — Chief Financial Officer
Darren Urquhart is a Chartered Accountant with more than 10 years of experience working in both public practice and industry. He is presently engaged in public practice accounting offering CFO and accounting services to TSXV-listed exploration companies in the Vancouver area. Urquhart began his career working as an audit accountant with Grant Thornton LLP, then later worked as a senior tax accountant with Lohn Caulder Chartered Accountants and more recently served as a consultant to an international private equity company. He obtained his Chartered Accountant designation in 2001 and is a member of the Institute of Chartered Accountants of British Columbia. In 1995, Urquhart obtained his B.A.Sc. (Electrical Engineering) from the University of British Columbia.
Guillermo Pablo Pensado, B.Sc. Geol, M.Sc. in Mineral Exploration—VP Exploration and Development
Guillermo Pensado has extensive experience in uranium exploration, having held positions of Vice President of Exploration, Exploration Manager and Exploration Geologist for junior and senior mining companies as well as the Brazilian geological survey. He holds a B.Sc. in Geology from the University of La Plata, Argentina, and M.Sc. in Mineral Exploration from Queen’s University, Canada. He was awarded the David Money Medal Award from Queen’s University for the Top MinEx Student in the International Program.
Connie Norman – Corporate Secretary
Connie Norman is a senior corporate officer with over 18 years of experience within the public company sector providing corporate secretarial and regulatory compliance services. While her main focus has been on TSXV-listed issuers, she has also worked with companies listed on the TSX and HKEx.
Joseph Grosso—Chairman of the Board and Director
Joseph Grosso is the President and Founder of Grosso Group Management Ltd. He became one of the early pioneers of the mining sector in Argentina in 1993 when mining was opened to foreign investment, and was named Argentina’s Mining Man of the Year in 2005. His knowledge of Argentina was instrumental in attracting a premier team which led to the acquisition of key properties in Golden Arrow’s portfolio. He has successfully formed strategic alliances and negotiated with mining industry majors such as Barrick, Teck, Newmont, Viceroy (now Yamana Gold) and Vale and government officials at all levels. Grosso’s specialty is financing, negotiations, corporate and marketing strategies. He is an early and passionate and committed adopter of best practices in environmental protection and socio-economic development through mineral exploration. Of Italian descent and fluent in Italian, English and Spanish, Grosso has lived in Argentina and Peru where he acquired a very deep appreciation for Latin culture and successfully developed a vast network of contacts which have been very beneficial to the associated companies of the Grosso Group.
Dr. David Terry, Ph.D., P.Geo—Director
Dr. David Terry has more than 20 years of experience focused on exploration for a wide spectrum of precious and base metal deposits throughout North and South America. He has held numerous senior positions with both major and junior mining companies, including Boliden Limited, Westmin Resources Limited, Hemlo Gold Mines, Cominco Limited and Gold Fields Mining Corporation. He holds a BSc and PhD from the University of Western Ontario.
Dr. Jorge Berizzo – Technical Advisor
Dr. Jorge Berizzo was a senior uranium geologist for the Argentine Government (CNEA) for 14 years. He was involved in the discovery of the 15 million lb. U3O8 Cerro Solo deposit. In 1979 he formulated a detailed regional exploration plan, this project was put on hold by the Argentine Government. He identified 5,000 km2 of projects for Blue Sky and instrumental in the discovery of the company’s uranium discovery in the provinces of Rio Negro and Chubut.
Chuck Edwards, P.Eng. – Technical Advisor
Chuck Edwards is a Professional Engineer with over 50 years of experience in R&D, operations, government service, consulting and engineering management. He is now a Principal with Extractive Metallurgy Consulting in Saskatoon, Saskatchewan. He specializes in uranium processing for both alkaline and acid leach plants. He was involved in the engineering design of all the current uranium facilities in Saskatchewan’s Athabasca Basin, and has worked on uranium projects on five continents. Recently, he was a Process Engineering Advisor at the Saskatchewan Research Council. Previously, he held positions as Director of Metallurgy at Amec Foster Wheeler, Principal Metallurgist at Cameco Corporation, Regional Coordinator for Mineral Development Agreements for Energy, Mines and Resources Canada, Senior Metallurgist/Process Engineer with Kilborn Western Ltd., and Chief Metallurgist at Eldor Mines, Rabbit Lake, among others.
Edwards has been a Technical Consultant to the International Atomic Energy Agency (IAEA), Vienna, Austria since 1999 and served as President of the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) in 2011-2012. He was awarded the AIME gold medal for Extractive Metallurgy Technology in 1987, the CMP Best Presentation Award in 1997 and 2007, CMP Mineral Processor of the Year in 2001, CIM Distinguished Lecturer in 2003, CIM Fellowship in 2004, CIM Life Member in 2011, and CIM Distinguished Service Medal in 2013.
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