Mount Isa Projects

Project Update
Mount Isa Projects
September 2014
Skal Deposit
Mount Isa Region
Uranium Projects
In October 2012, the Queensland
Government lifted a 27-year old
ban on uranium mining. This
decision enables Paladin to
refocus on the development of
its substantial uranium holdings
in the Mount Isa region of
northwest Queensland.
Paladin has interests in the Isa
Uranium Joint Venture (IUJV), the
Mount Isa North Project (MINP)
and the Valhalla North Project
(VNP) in the area. The three
projects include 10 deposits
containing
106Mlb
U3O8
Measured and Indicated Mineral
Resources as well as 42Mlb U3O8
Inferred Resources. The bulk of
the mineralisation (76.3Mlb) is
concentrated in the Valhalla
deposit. Details are given in
Table 1.
Measured &
Indicated Resources
Deposit
Inferred Resources
Paladin
Attribution
Cut-off
ppm U3O8
Mt
Grade
ppm
t U3O8
Mt
Grade
ppm
t U3O8
Valhalla*
230
34.7
830
28,778
9.1
643
5,824
91.0%
Skal*
250
14.3
640
9,177
1.4
519
708
91.0%
Odin*
250
8.2
555
4,534
5.8
590
3,430
91.0%
Bikini*
250
5.8
497
2,868
6.7
493
3,324
82.0%
Andersons*
250
1.4
1,449
2,079
0.1
1,639
204
82.0%
Watta
250
5.6
404
2,260
82.0%
Warwai
250
0.4
365
134
82.0%
Mirrioola
250
2.0
555
1,132
82.0%
Duke Batman*
250
0.3
1,100
325
100%
Honey Pot
250
2.6
700
1,799
100%
0.5
1,370
728
Total
64.9
742
48,164
34.0
563
19,143
Total Resource
Attributable to Paladin
58.5
743
43,470
(95.8Mlb)
29.9
568
16,983
(37.4Mlb)
(Figures may not add due to rounding)
* Deposits estimated using Multiple Indicator Kriging within a wireframe envelope. All other resources are estimated using Ordinary
Kriging with an appropriate top cut. Data for all deposits is a combination of geochemical assay and downhole radiometric logging.
In June 2007, Paladin acquired 82% of Summit Resources
Ltd (Summit) and provides personnel and management to
Summit through a services agreement. Since then annual
mineral resource growth on the Mount Isa Projects has
Table 1: Resource Table
averaged close to 20%, increasing from a total of 65Mlb
U3O8 in 2007 to 148Mlb U3O8 in 2012 (see Table 2 for details).
116,490m diamond core and RC holes totalling 148,740m
have been drilled to find and define the mineral resources.
2
Table 2: Paladin Mount Isa Annual Mineral Resource Growth
Paladin instigated metallurgical and mineralogical test work
which has resulted in a better understanding of the uranium
mineralisation and proposed a flow-sheet which can now be
tested and developed in more detail. The mineralisation was
shown to be of a very fine grained and sometimes refractory
nature, containing increased carbonate gangue minerals.
Alkaline leaching has shown acceptable recoveries of 80 to
90% at high temperature and pressure, with normal reagent
consumption. Radiometric sorting of the mineralisation
showed further encouraging results. Testwork in the coming
years will aim at confirming an economic flow-sheet based
on alkaline leach and radiometric sorting.
The uranium exploration area is covered by six Exploration
Permit for Minerals (EPM’s) totalling 1,717km2. Due to
various ownership levels exploration on the tenements is
managed through the three previously detailed projects.
The locations are given in Figure 1 and described as follows:
Isa Uranium Joint Venture
The IUJV covers ground containing the Valhalla, Odin and
Skal uranium deposits 40km north of Mount Isa. Mineral
resource estimates are included in Table 1.
Participants in the joint venture are Summit Resources
(Aust) Pty Ltd (SRA) and Mount Isa Uranium Pty Ltd (MIU),
each holding a 50% interest with SRA as manager. MIU
is a wholly owned subsidiary of Valhalla Uranium Pty Ltd
(VUL), a formerly public company and now a wholly owned
subsidiary of Paladin. Following Paladin’s successful
takeover of VUL in 2006 and Paladin’s acquisition of
82.08% of the issued capital in Summit, Paladin’s effective
participating interest in the IUJV is 91.04%.
Ground subject to the IUJV covers 17.24km at Valhlla and
10km2 at Skal. These two areas lie within a larger holding
of contiguous tenements of 1,356km2 held 100% and
managed by SRA and Paladin (Figure 1).
2
Mount Isa North Project
The MINP is located 10 to 70km north and east of Mount Isa
and contains numerous uranium prospects. The area is 100%
held and managed by SRA. SRA is a wholly owned subsidiary
of Summit (ASX code: SMM) of which Paladin owns 82.08%.
Exploration continues on MINP where Summit holds 1,356km2
of granted tenements that are prospective for uranium, copper
and base metals. The tenements are centred on the city of
Project Update | Mount Isa Projects
Figure 1: Location of the Mount Isa Projects
Mount Isa. The project includes the Bikini, Mirrioola, Watta,
Warwai and Anderson uranium deposits as well as numerous
other uranium prospects. Mineral resource estimates are
shown in Table 1.
Valhalla North Project
The VNP was aquired by Paladin through the 100% takeover of
Fusion Resources Ltd (Fusion) in April 2009. The VNP is located
on EPM 12572 totalling 361km2, situated approximately 80km
north of the Valhalla deposit. The geological setting is similar
to the Summit/Paladin projects to the south where albitised
basalts with interbedded metasediments are mineralised
along east-west and north-south structures in Eastern Creek
Volcanics. The project includes the Duke Batman and Honey
Pot deposits and resource estimates are listed in Table 1.
Location and Access
The core of the exploration and project development activities
are focused on Summit’s Mount Isa North tenements located
30 to 80km north of Mount Isa, and the Fusion tenement,
3
EPL 12572, to the north (Figure 1). Summit tenements include
EPM 17511, 17513, 17514 and 17519. These tenements were
amalgamated in January 2010. Mineral Development Licence
applications for 6 areas covering the current deposits are in the
final stages of processing.
Access is excellent via the sealed Barkly Highway, by the
partially sealed Gunpowder Road, and by various station tracks
on the Calton Hills and Haslingden Cattle Stations. Most of
Summit’s activities are focused on the Haslingden and Calton
Hills pastoral leases which are used for breeding and grazing
cattle.
at ~1660 Ma, resulting in extensive contact metamorphism.
The ECV are metamorphosed to greenschist facies, and to
amphibolite facies west of the Mount Isa fault adjacent to the
Sybella Granite. The 1650 Ma Mount Isa Group unconformably
overlies the ECV, and consists of carbonaceous and dolomitic
siltstones and shales which host the world-class Mount Isa Cu
and Pb-Zn-Ag deposits.
The land is subject to the Kalkadoon People No.4 QC05/12
native title claim. Paladin/Summit has always maintained a good
working relationship with the Kalkadoon People and numerous
future exploration targets have been culturally cleared for drilling
by the group.
Paladin, through Summit, owns a large office and work yard/
compound in Mount Isa which contains extensive modern core
and sample handling and storage facilities (Figure 2).
Figure 3: Mount Isa North Project geologic map
Uranium Mineralisation and Alteration
Petrographic studies and mapping by Paladin have
demonstrated that much of the ‘red rock’ alteration in the
Mount Isa uranium deposits is due to finely disseminated
hematite in albite and calcite-flooded rocks caused by Na and
Ca metasomatism. These uranium metasomatite deposits
are analogous to similar deposits which have been mined in
Russia, Ukraine, China, Brazil and Canada (e.g. Beaverlodge
and Gunnar).
Figure 2: View of the office compound in Mount Isa
Geology
The bulk of the uranium mineralisation in the Mount Isa
Project area occurs in the Eastern Creek Volcanics (ECV)
of the Mount Isa Inlier. The Mount Isa Inlier is a 400km-long
N-S-elongated Proterozoic belt of strongly deformed and
metamorphosed rocks in NW Queensland (Figure 3). The
Inlier contains a diverse range of metal deposits, including
Pb-Zn-Ag (‘Mount Isa type’), Cu, P, Au and U. Two major
Proterozoic tectonostratigraphic cycles are recognised in the
Mount Isa Inlier, including basement metamorphic rocks and
rift-dominated cover sequences (Blake & Stewart, 1992). The
architecture of the Mount Isa area is predominantly a product
of the east-west compression of northerly striking rocks by the
Isan orogeny (D2) at 1570 Ma.
Subsequent N-S to NNE strike-slip faulting divided the area
into several tectonostratigraphic belts. The Leichhardt River
Fault Trough (LRFT) encompasses the Isa North uranium
district. The Mount Guide Quartzite is unconformably overlain
by basalts and interbedded clastic sediments of the ECV, dated
at ~1780 Ma. The ECV were intruded by the Sybella Granite
Albitite-hosted metasomatic uranium deposits in the Mount Isa
North area are characterised by pervasive sodium and calcium
metasomatism, expressed as albite, calcite and dolomite with
fine-grained hematite inclusions (albitite). Chlorite haloes are
proximal products of metasomatism, which overprint earlier
greenschist metamorphosed areas with a strong structural
control of the mineralisation expressed as brecciation and
foliation.
At Valhalla this resulted in a 3km-long shear zone showing
repeated brittle/ductile overprints. The deposits occur as en
echelon lenses of uranium mineralisation in zones of enhanced
foliation slightly oblique to bedding.
There are potentially many targets obscured by alluvium and
which remain unrecognised and untested.
Geochemical signatures of the mineralisation include
enrichment of U, Na, Ca, Sr, Zr, Th, V, Pb, Hf and P, and
depletion of K, Rb, Ba and Cs.
The uranium mineralogy of albitites includes several phases
of sometimes refractory uranium minerals (e.g. brannerite,
coffinite, urananite).
Project Update | Mount Isa Projects
4
Exploration
Improved understanding of controls to uranium mineralisation,
regional structure and magnetic interpretation will be utilised
to drive more creative exploration, especially in covered areas.
Geologic mapping and 3D models will be used to project
mineralised trends into undrilled areas. Comprehensive airborne
and ground radiometric and magnetic data are being used
to rank anomalies for field evaluation, with a focus on targets
hosted in the ECV.
GIS based prospectivity maps are being used to objectively
guide exploration. Valhalla is the “economic centre” for the
region and therefore targets closer to Valhalla are prioritised
over those further away.
Uranium exploration potential in the Mount Isa region is
considered exceptional and is expected to add to the 148Mlb
U3O8 resource base. Additional resource growth is expected to
occur at Odin, Skal and Valhalla Deep.
Outside the known mineralisation, 20 exploration drill targets
have been identified in the Isa North region. Most of these
targets are in the Valhalla-Gunpowder corridor of covered ECV
where prospectivity is rated the highest.
The Way Forward
At this stage Paladin’s studies indicate that there is potential
that the project can be developed into a 4-5Mlt/a operation,
producing 5-7Mlb U3O8 annually. To confidently start a
Bankable Feasibility Study for this project a further 3 to 4
years of exploration and metallurgical work will be required.
Exploration will aim at increasing and upgrading the mineral
resource base to be converted into sufficient ore reserves to
start the operation. Metallurgical work will aim at confirming
and detailing the current proposed flow-sheet culminating
in a small pilot plant. To carry out the proposed work, it is
estimated that significant annual budgets will be required.
The Uranium Market
The March 2011 Great East Japan Earthquake and resultant
tsunami inflicted severe damage on the Fukushima-Daiichi
rectors causing most countries to undertake comprehensive
safety reviews of existing nuclear power plants. Reactor
construction was temporarily suspended in some countries,
but only Germany has taken the decision to eventually phaseout its commercial nuclear power programme. Japan continues
to evaluate its nuclear power programme with phased reactor
restarts likely. However, post-Fukushima, worldwide reactor
plans have been re-affirmed and work has resumed on reactors
under construction.
In response to new safety standards promulgated by the
independent Nuclear Regulatory Authority of Japan, Japanese
nuclear utilities have applied for safety reviews of 20 reactors
idled since the Fukushima earthquake. Mid-July, the NRA
issued a draft safety evaluation report for two reactors (Sendai
1&2 owned by Kyushu Electric Power) initiating a public
comment period and restart approval discussions with local
governmental bodies. Restart of the two reactors is expected
as soon as fourth quarter 2014 with a progressive restart
programme to follow. Paladin anticipates that up to two-thirds
of operable Japanese nuclear capacity will reinitiate operations
over the next few years.
Worldwide, there are now 72 nuclear power plants under
construction, ten more than at the time of the Fukushima events
and there are 435 operational reactors consuming more than
170Mlb pa U3O8. Paladin forecasts that global uranium demand
will reach 230Mlb pa U3O8 by 2020 and that the global uranium
production industry will struggle to meet that rapidly growing
demand.
Corporate/Contact Details
Australia
North America
Andrew Mirco
Investor Relations
Email:[email protected]
Greg Taylor
Investor Relations
Bus/Cell: +1 (416) 605 5120
Fax: +1 (905) 844 6532
Email:[email protected]
Toronto, Ontario, Canada
Level 4, 502 Hay Street,
Subiaco, Western Australia 6008
PO Box 201, Subiaco, Western Australia 6904
Tel:
+61 (0) 8 9381 4366
Fax:
+61 (0) 8 9381 4978
Email:[email protected]
www.paladinenergy.com.au
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Project Update | Mount Isa Projects
The information in this document relating to exploration and mineral resources is, except where stated, based on information
compiled by David Princep B.Sc who is a Fellow of the AusIMM. Mr Princep has sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as
defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”,
and as a Qualified Person as defined in NI 43-101. Mr Princep is a full-time employee of Paladin Energy Ltd and consents to the
inclusion of this information in the form and context in which it appears.
Unless otherwise stated, information on mineral resources was prepared and first disclosed under the JORC Code 2004.
It has not been updated since to comply with JORC Code 2012 on the basis that the information that the estimates are
derived from has not materially changed since it was last reported.