Uranium Exploration Hotspots

Mineral exploration is most often a speculative, time consuming, and capital intensive process even with the most highly qualified and experienced individuals. It may be described as a combination of science and art with many projects informed by geological concepts and broad theories involving a spectrum of field and laboratory work in addition to more detailed economic feasibility assessments. Being aware of how these aspects are related within the greater framework of regional contexts can be of a significant advantage to uranium investors.

In an interview with Uranium Investing News, Michael Chender, Chief Executive Officer for Metals Economics Group indicated potential exploration hotspots, “According to Metals Economics Group 2010 Corporate Exploration Strategies study Australia and Canada are the two most popular destinations for uranium exploration receiving 29 percent and 22 percent of total 2010 worldwide uranium budgets, respectively.”  With Kazakhstan hosting approximately 12 percent of the estimated recoverable global resources of uranium and relative proximity to industrial giants with large populations and increasing energy demands, the Asian country also might present a worthwhile consideration for exploration potential.

Australia

Australian uranium resource potential remains high as the country hosts an estimated 31 percent of the world’s known recoverable resources of uranium, according to the World Nuclear Association. The Olympic Dam, currently operated by BHP Billiton (NYSE:BHP) is the largest deposit of low-grade uraniumin the worldand represents an estimated 66 percent of Australia’s reserves plus resources. The uranium resource occurs along with gold, silver, copper, and rare earth elements in a large hematite-rich granite breccia complex in the Gawler Craton overlain by about 300 meters of flat-lying sedimentary formations.

Curnamona Energy Limited (ASX:CUY) is engaged in the exploration for uranium deposits primarily in the Lake Frome region of northeastern South Australia. The company is exploring more than 8,000 square kilometers of tertiary palaeochannel terrain. A primary prospect is the Oban deposit located 60 km north of the Honeymoon uranium deposit. The company indicates that this deposit contains 2,100 tonnes of uranium within an inferred resource of 8.2 million tonnes of mineralization at an average grade of 260 parts per million.

Pepinnini Minerals Limited (ASX:PNN) is engaged in the exploration for uranium, gold, nickel, copper, lead, zinc, and other mineral commodities with interests in 44 exploration tenements covering approximately 16,225 square kilometers. The portfolio is spread in a variety of areas in Australia and the company holds a strategic alliance with Sinosteel Corporation for a joint participation and co-operation project for the development of the Crocker Well and Mt Victoria Uranium Deposits and other commodities in the Curnamona Province of South Australia.

Canada

Northern Saskatchewan is host to exceptional uranium mineral deposits and production operations including the Cameco (TSX:CCO) (NYSE:CCJ) and Areva Group’s (EPA:CEI) McArthur River and Cigar Lake mines are both world class operations. Earlier this spring, Hathor Exploration Ltd. (TSX:HAT) confirmed strong development at its high grade uranium deposit. The Roughrider project became the third richest in the Athabasca Basin according to its most recent resource estimate.

Denison Mines Corp. (TSX:DML) is currently at the exploration stage in the Wheeler River area half way between McArthur River and Key Lake developing the Phoenix deposit. With some high-grade uranium mineralization, it is along strike from the former and bares a geological resemblance. At present Denison owns a 60 percent interest, Cameco shares 30 percent and a Japan-Canada Uranium consortium maintains the remaining 10 percent ownership.  The company has said, “The discovery of the Phoenix deposit on the Wheeler River Property is one of the most significant new uranium discoveries in the Athabasca Basin in many years.”  In May, Denison announced its summer exploration drill program involving three drill rigs focused on expanding two existing resource zones. Further extension testing of high grade mineralization and other parallel east-west structures will be conducted in addition to other testing done at favourable targets in two other zones. The company has indicated that this could result in a revised 43-101 in the fall.

Kazakhstan

Kazakhstan is anticipating that it will extend its position as the world’s largest producer of uranium this year with a 10 percent increase in production. In February it was announced that the country would produce 19,600 tonnes of uranium this year, up from the 17,803 tonnes produced in the previous twelve months.  The country also signed an inter-governmental agreement for cooperation with India that envisages exploration and joint mining of uranium, construction and operation of atomic power plants, a legal framework for supply of fuel, exchange of scientific and research information, reactor safety mechanisms and use of radiation technologies for healthcare.

Uranium One (TSX:UUU) has a 30 percent joint venture interest in the Kharasan deposit, a developing stage in-situ recovery project located approximately 250 km northwest of Shymkent. The company further holds a 70 percent joint interest in an operational in-situ recovery mine, South Inkai located approximately 450 km northwest of Shymkent. Commercial production began on January 1, 2009, following a pilot plant program over 15 months conducted during a period from October 2007 to December 2008. The design capacity of the mine is 2,000 tonnes of uranium per year and it is expected that the annualized rate of production will reach this level this year.

Securities Disclosure: I, Dave Brown, hold no direct investment interest in any company mentioned in this article.