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SXR
SXR
sxr Uranium One Inc - Increase in Resources and Reserves at the Modder East
Project, South Africa
sxr Uranium One Inc
(Formerly Southern Cross Resources Inc.)
(Incorporated in Canada)
(Registration number: 15096422420)
Share code on the JSE: SXR & ISIN: CA87112P1062
Share code on the TSX: SXR & ISIN: CA87112P1062
("Corporation")
sxr Uranium One Inc.
26 Wellington Street East, Suite 820
Toronto, Ontario M5E 1S2
Trading Symbol: SXR - The Toronto Stock Exchange
NEWS RELEASE
February 13, 2006 Toronto, Ontario
Increase in Resources and Reserves at the Modder East Project, South Africa
Toronto, Ontario and Johannesburg, South Africa -- sxr Uranium One Inc.
announced today that its Aflease Gold Limited affiliate has received a revised
gold reserve and resource statement prepared by Turgis Consulting (Pty) Ltd. for
the Modder East gold project located in the East Rand goldfields of South
Africa.
The revised statement shows a reserve of 1.3 million ounces in the probable
category, grading an average of 4.02 g/t gold. This represents a 28% increase
over the reserve gold estimates contained in the October 20, 2005 amended
independent technical report on the Modder East property prepared by SRK
Consulting (available on SEDAR). In addition, the revised statement shows a
resource of 2.0 million ounces in the indicated category (a 21% increase from
the 1.7 million ounces previously reported) and 1.0 million ounces in the
inferred category (a 23% increase from the 0.8 million ounces previously
reported). In all cases, mineral reserves and resources have been reported in
accordance with the classification criteria of the South African Code for
Reporting of Mineral Resources and Mineral Reserves (the SAMREC Code).
The resource at Modder East is derived from three reef horizons - the Black Reef
(average dip of 30) and the Kimberley UK9A and UK5 units (average dip of 120).
The high grade Black Reef mineralization zone is developed at approximately 300
metres below surface, while the sub-cropping Kimberley (UK9A and UK5) units
below the Black Reef reach depths of around 600 metres. The reef units are
considered to be structurally simple and generally well understood, as a result
of a long history of mining the underlying Main Reef on the East Rand and the
selective mining of the UK9A unit at the adjacent Petrex operations that
resulted in the outlining of the major faults and dykes.
The Black Reef comprises three facies. At the top is the high grade Buckshot
Pyrite Leader Zone (BPLZ), which averages 0.5 metres in thickness and is the
primary mining target. The BPLZ is a placer deposit, with gold present within a
heavy mineral suite dominated by pyrite and hosted within a conglomerate.
Continuity of mineralization in the target area has been confirmed, with the
zone of mineralization clearly visible within the drill hole cores. The BPLZ
overlies the Blanket Facies, a 1.5 metre thick blanket quartzite which has not
been targeted due to its very low gold grades. At the bottom is the 3 metre
thick, erosional Channel Facies, which grades 1.92 g/t over 3 metres mining
width.
The UK9A is a channelized, fluvial sedimentary deposit containing placer gold
within conglomerates. The UK5 is a multi-stacked package of robust
conglomerates. The mineralized portion of the package comprises a 3 metre unit
of medium to large pebble conglomerates. Dimensions of payability of both the
Black and Kimberley Reefs are dependent upon the sub-cropping nature of the
Kimberley units.
The table below summarizes the revised reserve and resource statement by
category:
Modder East Gold Project - Reserves and Resources Summary
Probable Mineral Reserves (1)
Reef Type Tonnes Gold Grade Contained Gold
(thousands) (g/tonne) (k/oz)
BPLZ and Blanket 6,310 4.83 979
Facies
Channel Facies 2,466 1.92 152
UK9A 1,289 4.10 170
Total Probable 10,065 4.02 1,301
(1) Mineral reserves estimated by Turgis Consulting (Pty) Ltd. and reported in
accordance with SAMREC. For reserve estimation purposes, 0.5 metres of Channel
Facies is mined together with the 0.5 metres of BPLZ to give an effective
stoping width of 1 metre.
Indicated Mineral Resources (2)
Reef Type Tonnes Gold Grade Contained Gold
(thousands) (g/tonne) (k/oz)
BPLZ and Blanket 5,720 6.07 1,120
Facies(3)
Channel and 15,200 1.32 650
Blanket Facies
UK9A 1,350 5.47 240
UK5
Total Indicated 22,270 2.79 2,010
Inferred Mineral Resources (2)
Reef Type Tonnes Gold Grade Contained Gold
(thousands) (g/tonne) (k/oz)
BPLZ and Blanket 470 3.31 50
Facies(3)
Channel and - - -
Blanket Facies
UK9A 2,500 5.00 400
UK5 9,700 1.82 570
Total Inferred 12,670 2.50 1,020
(2) Mineral resource estimated by Mr. Charles Muller, B.Sc.(Hons), Pr.Sci.Nat.,
of Global Geo Services (Pty) Ltd. and reported to a cut-off grade of 167 cmg/t
(in the case of the BPLZ and Blanket Facies), 379 cmg/t (in the case of the
Channel Facies), 199 cmg/t (in the case of the UK9A) and 496 cmg/t (in the case
of the UK5). Mineral resources are reported in accordance with SAMREC. Mineral
resources are not mineral reserves and do not have demonstrated economic
viability.
(3) For resource estimation purposes, the Blanket Facies, which is sandwiched
between the BPLZ and the Channel Facies, has been combined with either the BPLZ
or the Channel Facies.
The increase in reserves reflects the results of the 2005 drilling program
conducted at the property by Aflease Gold and Uranium Resources Limited, as well
as a lower cut-off due in part to the gold price used in determining the reserve
estimate cut-off grade, which increased from US$400 per ounce at an exchange
rate of US$1.00:R6.52 in 2004 to US$430 at an exchange rate of US$1:R6.49 in
2005. The largest increase in the reserve is in the UK9A unit, where 240,000
ounces of gold grading 5.47g/t were elevated to probable reserve status.
The revised reserve statement was prepared by Turgis Consulting (Pty) Ltd. and
audited by SRK Consulting. The probable mineral reserves have demonstrated
profitability when included in a mine plan using industry accepted mining
methods and a gold price of US$430 per ounce and an exchange rate of
US$1.00:R6.49. The pay limit was used to identify blocks of ground for mining.
Within these blocks of ground, a marginal cut-off grade was applied to identify
additional panels for mining.
Gold content figures are fully inclusive of mining dilutions and gold losses and
are reported as mill delivered tonnes and head grade. Metallurgical recovery
factors have not been applied to the reserve figures.
The increase in the mineral resource has occurred primarily in the BPLZ, Channel
Facies and the UK5. The revised resource statement includes the UK5 as a
resource in the inferred category for the first time.
The revised resource estimate was prepared by Mr. Charles Muller, B.Sc.(Hons),
Pr.Sci.Nat., of Global Geo Services (Pty) Ltd., independent geoscience
consultants to the Corporation, and have been audited by SRK Consulting. Mr.
Muller is a qualified person for the purposes of NI 43-101.
2005 Drilling Program
The 2005 drilling campaign (from November 30, 2004 to November 30, 2005)
consisted of 32 BQ-calibre diamond drill holes, totalling 14,676 metres of
drilling (including 2,337 metres of deflections). Of the 32 drill holes, 26
intersected the target horizons while 6 stopped short as a result of
intersecting previously mined coal seams. An additional 505 metres of drilling
was completed in December 2005. Drilling is currently ongoing, with a further
4,460 metres of drilling scheduled for 2006.
The objectives of the 2006 drilling program will be to upgrade the resource base
in the main mineralized zones, in particular the BPLZ, UK9A and UK5. The
drilling strategy is to drill vertical boreholes to intersect interpreted
auriferous-bearing reefs located between 275 - 600 metres below surface as close
as possible to a right angle. Normal drilling procedure is for the "mother
hole" to be drilled into the BPLZ and the Kimberley Reef zone. Core size is BQ
(approximately 4.84 kgs core per metre) but all deflections are drilled TBW size
(approximately 6 kgs core per metre). Two short deflections are standard on the
BPLZ and, if developed, four deflections (two short and two long) in the UK9A.
Down-hole multi-shot borehole surveys are then carried out at 6 metre intervals.
Assay values have been obtained for 24 of the boreholes. These holes, which have
been drilled to an average depth of 385 metres, have yielded a total of 67 reef
intersections (excluding deflections).
Reef Type Number of Intersections
BPLZ 18
Channel Facies 20
UK9A 22
UK5 7
Total 67
The assay results of two further holes drilled in 2005 (DD53 and DD54) are still
outstanding.
The assay results from the 2005 drilling program available to date are
summarized in the schedule attached to this news release. A map of drill hole
locations can be accessed at the Corporation"s website (www.uranium1.com).
Quality Assurance and Quality Control
The drilling program at Modder East is being carried out under the direction of
Mr. M.H.G. Heyns, Pr.Sci.Nat. (SACNASP), MSAIMM, MGSSA, Consulting Geologist,
sxr Uranium One Inc., and a qualified person for the purposes of NI 43-101.
Geological and geostatistical modelling is undertaken by two consultants, Peter
Camden-Smith, M.Sc., G.D.Eng, MBL, Pr.Sci.Nat, and Charles Muller, B.Sc.(Hons.),
Pr.Sci.Nat., both of whom are qualified persons for the purposes of NI 43-101.
Exploration data is acquired by the Corporation and its consultants under strict
quality assurance and quality control protocols. All borehole collars are
surveyed within an accuracy of 0.1 metre and borehole density measurements are
routinely performed on all intersections. Half-core assay samples are collected
by appropriately qualified personnel, the remaining half-core being retained for
inspection by interested parties. All boreholes have been routinely logged in
detail according to a standard procedure. Samples are prepared and are assayed
at the Anglo American Research Laboratory located near Johannesburg, South
Africa, which is accredited under SANAS and ISO 17025. Gold assays are
performed using conventional lead collector fire assay procedures, with ICP-OES
instrumental finish. Quality control procedures follow industry standard
protocols and include the use of blind control samples.
sxr Uranium One Inc. is a Canadian uranium and gold resource company with a
primary listing on The Toronto Stock Exchange and a secondary listing on the JSE
Limited (the Johannesburg Stock Exchange). The Corporation owns 100% of the
Dominion uranium project in South Africa and the Honeymoon uranium project in
South Australia. Through a joint venture with Pitchstone Exploration Ltd., the
Corporation is also engaged in uranium exploration activities in the Athabasca
Basin of Saskatchewan. Aflease Gold Limited, formed on the completion on
January 23, 2006 of the reverse take-over of Sub Nigel Mining Company by Aflease
Gold and Uranium Resources Limited, is listed on the Johannesburg stock exchange
and is owned as to approximately 80% by sxr Uranium One Inc.
For further information please contact:
Neal Froneman John Fraser Don Falconer
Chief Executive officer Corporate Communications VP Investor Relations
Tel + 27 11 482 3605 Tel + 27 11 482 3605 Tel +1 416 350 3657
Cautionary note concerning forward-looking statements and disclosure of mineral
reserves, resources and contained gold: Statements in this release that are not
historical facts are "forward-looking statements" involving known and unknown
risk and uncertainties which are beyond the ability of the Corporation to
control or predict and which could cause actual events or results to differ
materially from those anticipated in such forward-looking statements.
In addition, this news release uses the terms "probable reserves", "indicated
resources" and "inferred resources" as defined in accordance with National
Instrument 43-101 - Standards of Disclosure for Mineral Projects, under the
guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum
(CIM) Standards on Mineral Resources and Mineral Reserves, adopted by CIM
Council on August 20, 2000, as may be amended from time to time by the CIM. A
mineral reserve is the economically mineable part of a measured or indicated
resource demonstrated by at least a preliminary feasibility study. This study
must include adequate information on mining, processing, metallurgical, economic
and other relevant factors that demonstrate at the time of reporting that
economic extraction can be justified. A mineral reserve includes diluting
materials and allows for losses that may occur when the material is mined. A
proven mineral reserve is the economically mineable part of a measured resource
for which quantity, grade or quality, densities, shape and physical
characteristics are so well established that they can be estimated with
confidence sufficient to allow the appropriate application of technical and
economic parameters to support production planning and evaluation of the
economic viability of the deposit. A probable mineral reserve is the
economically mineable part of an indicated mineral resource for which quantity,
grade or quality, densities, shape and physical characteristics can be estimated
with a level of confidence sufficient to allow the appropriate application of
technical and economic parameters to support mine planning and evaluation of the
economic viability of the deposit.
A mineral resource is a concentration or occurrence of natural, solid, inorganic
or fossilized organic material in or on the earth"s crust in such form and
quantity and of such a grade or quality that it has reasonable prospects for
economic extraction. The location, quantity, grade, geological characteristics
and continuity of a mineral resource are known, estimated or interpreted from
specific geological evidence and knowledge. A measured mineral resource is that
part of a mineral resource for which quantity, grade or quality, densities,
shape and physical characteristics can be estimated with a level of confidence
sufficient to allow the appropriate application of technical and economic
parameters to support mine planning and evaluation of the economic viability of
the deposit. The estimate is based on detailed and reliable exploration,
sampling and testing information gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill holes that are
spaced closely enough to confirm both geological and grade continuity. An
indicated mineral resource is that part of a mineral resource for which
quantity, grade or quality, densities, shape and physical characteristics can be
estimated with a level of confidence sufficient to allow the appropriate
application of technical and economic parameters to support mine planning and
evaluation of the economic viability of the deposit. The estimate is based on
detailed and reliable exploration and testing information gathered through
appropriate techniques from locations such as outcrops, trenches, pits, workings
and drill holes that are spaced closely enough for geological and grade
continuity to be reasonably assumed. An inferred mineral resource is that part
of a mineral resource for which quantity and grade or quality can be estimated
on the basis of geological evidence and limited sampling and reasonably assumed,
but not verified, geological and grade continuity. The estimate is based on
limited exploration and sampling gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill holes. Mineral
resources which are not mineral reserves do not have demonstrated economic
viability.
Investors are cautioned not to assume that all or any part of the mineral
deposits in the measured and indicated resource categories will ever be
converted into reserves. In addition, "inferred resources" have a great amount
of uncertainty as to their existence and economic and legal feasibility. It
cannot be assumed that all or any part of an inferred mineral resource will be
ever be upgraded to a higher category. Under Canadian rules, estimates of
inferred mineral resources may not form the basis of feasibility or pre-
feasibility studies or economic studies except for preliminary assessments as
defined under NI 43-101. Investors are cautioned not to assume that all or any
part of an inferred resource exists or is economically or legally mineable.
To receive the Corporation"s news releases by email, contact John Fraser,
Corporate Communications at john@aflease.com or Don Falconer, Investor
Relations, at dfalconer@southerncrossres.com. The TSX has neither approved nor
disapproved of the information contained herein.
To view drill results, please see:
http://files.newswire.ca/215/ModderEastProject.doc
Mr. M.H.G. Heyns, Pr.Sci.Nat. (SACNASP), MSAIMM, MGSSA, Consulting
Geologist, sxr Uranium One Inc., is the qualified person responsible for the
Modder East drilling program and has verified the data in the table above.
Exploration data is acquired by the Corporation and its consultants under
strict quality assurance and quality control protocols. All borehole collars
are surveyed within an accuracy of 0.1 metre and borehole density measurements
are routinely performed on all intersections. Half-core assay samples are
collected by appropriately qualified personnel, the remaining half-core being
retained for inspection by interested parties. All boreholes have been
routinely logged in detail according to a standard procedure. Samples are
prepared and are assayed at the Anglo American Research Laboratory located
near Johannesburg, South Africa, which is accredited under SANAC and ISO
17025. Gold assays are performed using conventional fire assay procedures.
Quality control procedures follow industry standard protocols and include the
use of blind control samples.
Date: 14/02/2006 08:59:52 AM Produced by the JSE SENS Department
