| Wed 17 Jan 2007, 16:23 | | SXR - sxr Uranium One Inc - News release |
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SXR
SXR
SXR - sxr Uranium One Inc - News release
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
sxr Uranium One Inc.
390 Bay Street, Suite 1610
Toronto, Ontario M5H 2Y2
Trading Symbol: SXR - Toronto Stock Exchange, JSE Limited (Johannesburg
stock exchange)
NEWS RELEASE
January 17, 2007
Dominion Project - Uranium One Reports Updated Resource Estimate,
Additional Uranium Tailings Resources and Extensive New Prospecting Rights
Toronto, Ontario and Johannesburg, South Africa - sxr Uranium One Inc.
("Uranium One") today announced an updated mineral resource estimate for
its Dominion uranium project in South Africa. The updated estimate shows a
37% increase in the Indicated uranium resources over the estimate reported
in June 2006.
In addition, Uranium One has declared for the first time an Indicated
uranium and gold resource in the surface waste dumps located on the
Dominion property (the Dominion Dumps). The processing of material from
the dumps is expected to result in greater production and lower treatment
costs during the first three years of plant operation than projected in the
independent technical report on the Dominion project prepared by SRK
Consulting, as amended and filed on SEDAR on October 26, 2006.
Revised Mineral Resource Estimate
Dominion and Rietkuil Sections
The primary focus of the current and ongoing diamond exploration drilling
program is to upgrade existing Inferred resources into Indicated resources
such that mine planning can be expedited for production purposes. This has
been achieved by delineating the down dip extensions of previously
identified higher grade channels. Ongoing drilling is primarily aimed at
targeting further extensions to these known ore-shoots, as well as
identifying additional ore-shoots in the current Inferred resource areas.
Focused drilling on newly identified ore-shoots is being undertaken for
conversion to Indicated resources, with a view to maximizing the resource
and reserve base for mine planning purposes and to assess the ability of
the Dominion uranium project to potentially support an expansion to
approximately 7.0 million pounds of U3O8 production per annum by 2015.
The updated mineral resource estimate for the Dominion uranium project
shows an Indicated uranium resource of 36.4 million tonnes at a grade of
0.81 kg/tonne, containing 64.9 million pounds U3O8. This represents a 37%
increase in the number of contained pounds of uranium within the Indicated
uranium resource base relative to the most recent Dominion resource
estimate (contained in the June 2006 independent technical report on the
Dominion property prepared by SRK Consulting and available on SEDAR) of
26.0 million tonnes at a grade of 0.83 kg/tonne, containing 47.5 million
pounds U3O8 in the Indicated category.
The updated mineral resource estimate shows an Inferred resource of 219.4
million tonnes at a grade of 0.38 kg/tonne, containing 183.6 million pounds
of U3O8 compared to 178.4 million tonnes at a grade of 0.51 kg/tonne,
containing 199.2 million pounds of U3O8 in June 2006. The increase in
contained pounds of U3O8 in the Indicated resource, and the corresponding
decrease in contained pounds of U3O8 in the Inferred resource, reflects the
focus of the drilling carried out in connection with the resource update.
The decrease in the average grade of the Inferred uranium resource is
largely due to several higher grade ore-shoot extensions being incorporated
into the Indicated resource, resulting, at this stage, in an overall lower
Inferred uranium resource grade. In line with our experience to date, it
is anticipated that ongoing drilling at the site would lead to the
identification and delineation of additional higher grade ore-shoots in the
Inferred resource, which would both increase the average Inferred grade and
provide additional targets for conversion to Indicated resources.
Furthermore, during the conversion of Inferred to Indicated resources, the
reefs are optimized with respect to economic mining widths and grade. This
process considers the selection of an optimal mining cut (thickness) to
maximize uranium grades and associated contents. Currently, Indicated
resources are quoted over selective mining cuts (grade optimized), while
Inferred resources are quoted over full channel widths (grade diluted over
total, thicker, reef units).
In addition, the revised mineral resource estimate shows an Indicated gold
resource of 36.4 million tonnes at a grade of 0.91 g/tonne, containing 1.1
million ounces of gold. This represents a 17% increase in the contained
ounces within the Indicated gold resource base relative to the June 2006
resource estimate of 26.0 million tonnes at a grade of 1.09 g/tonne,
containing 0.9 million ounces of gold. Inferred gold resources have
increased from an average grade of 0.63 g/tonne to 0.67 g/tonne, resulting
in a 32% increase in Inferred contained gold ounces, from 3.6 million
ounces to 4.8 million ounces.
In all cases, mineral resources have been reported in accordance with the
classification criteria of the South African Code for Reporting of Mineral
Resources and Mineral Reserves ("SAMREC").
The tables below summarize the revised resource estimate by category:
Dominion Uranium Project - Uranium and Gold Resources Summary (Effective 31
December, 2006)
Dominion Reefs: Dominion and Rietkuil Sections
Indicated Mineral Resources (1)
Reef Unit Tonnes U3O8 Grade Contained Gold Grade Contained
U3O8 Gold
(thousands) (kg/tonne) (thousands (g/tonne) (thousands
of lbs) of ozs)
Dominion 13,735 0.74 22,497 0.65 287
Upper
Rietkuil 11,215 0.86 21,246 0.93 335
Upper
Dominion 9,382 0.86 17,710 1.36 410
Lower
Rietkuil 2,053 0.76 3,436 0.43 28
Lower
Total 36,385 0.81 64,889 0.91 1,060
Indicated
Indicated Mineral Resources (1)
Reef Unit Tonnes U3O8 Grade Contained Gold Grade Contained
U3O8 Gold
(thousands) (kg/tonne) (thousands (g/tonne) (thousands
of lbs) of ozs)
Dominion 71,662 0.32 50,303 0.49 1,128
Upper
Rietkuil 48,331 0.55 58,796 0.44 683
Upper
Dominion 54,552 0.27 32,836 0.91 1,594
Lower
Rietkuil 44,830 0.42 41,695 0.93 1,347
Lower
Total 219,375 0.38 183,630 0.67 4,752
Inferred
(1) Mineral resource estimated by Dr. Carina Lemmer of Geological &
Geostatistical Services and reported to a cut-off of 30 cm.kg/tonne U3O8
for both Dominion and Rietkuil, and 0.00 g/tonne gold. Mineral resources
are reported in accordance with SAMREC. Mineral resources are not mineral
reserves and do not have demonstrated economic viability.
The drilling campaign conducted from May 6, 2005 to November 21, 2006
comprised 209 BQ- and NQ-calibre diamond drill holes, totaling 91,076
metres. Of these, 164 boreholes (93 and 71 boreholes at the Rietkuil and
Dominion sections, respectively) have been utilized for the current
resource update (data received and verified prior to October 15, 2006).
This represents an additional 59 boreholes since the June 2006 resource
declaration. The assay results from the boreholes considered for the
resource estimate are summarized in a schedule that can be accessed at the
Corporation`s website (www.uraniuml.com). This schedule is accompanied by
a map indicating the drill hole locations at the Dominion Property.
Previously defined (June 2006) geological domains have been refined and
extended based on the new drilling information. The estimation technique
employed considers ordinary kriging in all the Indicated resource areas.
Over the much larger portion of the resource that was classified as
Inferred, stationarity was considered sufficient to apply simple kriging in
a few cases where there was a paucity of data; otherwise, ordinary kriging
was also applied. Mean values for panels of 240m x 240m were kriged in the
Indicated resource areas, based on a 160 cm maximum mining width. Kriging
in the Inferred resource areas was based on the full channel width. For
both the Indicated and Inferred resources, a minimum mining width of 100 cm
is considered. The cut-off values employed in the estimate are marginally
different from the values employed in the June 2006 estimate, based on
minor price variations (US$46.50/lb for U3O8 and US$580/oz for gold, versus
US$45.00/lb for U3O8 and US$528/oz utilized in June 2006). The influence
of the co-product gold values was also considered in the cut-off
determination.
Since the previous resource declaration, the methodology for dip estimation
has been revised (considering discrete dip domains as opposed to regional
dip applications), allowing for more accurate tonnage estimates. Selective
mining units of 30 m2 have been applied, which more closely resembles
actual planned mining panel dimensions. Resource classification was
largely based on data quality, density and statistical parameters.
The revised resource estimate for the Dominion Reefs was prepared by Dr.
Carina Lemmer of Geological and Geostatistical Services, independent
geoscience consultants to Uranium One, and the underlying geological
modeling was prepared by Dr. Richard Stewart, Pr.Sci.Nat. (SACNASP), MGSSA,
Regional Exploration Geologist, Uranium One. Both are qualified persons
for the purposes of NI 43-101. The data for the resource estimate was
verified by Dr. Richard Stewart. Analytical verification was completed
through the analysis of certified reference materials, duplicate sample and
barren sample analysis. Geological and assay data is obtained form a
central exploration database, where logging, sampling and data entry
procedures are checked and verified.
Dominion Dumps Area
An auger drilling exploration program and associated evaluation of the
Dominion Dumps was undertaken between May and November 2006. The Dominion
Dumps comprise a cluster of four dumps generated by historic mining and
milling activity on the Dominion property. Two of these (Areas 3 and 4)
contain an Indicated resource of 3.4 million tonnes, at a grade of 0.16
kg/tonne uranium and 0.51 g/tonne gold, containing 1.2 million pounds of
U3O8 and 55,000 ounces of gold.
Dominion Dumps
Inferred Mineral Resources (1)
Reef Unit Tonnes U3O8 Grade Contained Gold Grade Contained
U3O8 Gold
(thousands) (kg/tonne) (k/lbs) (g/tonne) (k/oz)
Area 3 2,376 0.12 636 0.47 36
Area 4 999 0.25 559 0.58 19
Total 3,375 0.16 1,195 0.51 55
Indicated
(2) Mineral resource estimated by Mr. Charles Muller, B.Sc.(Hons),
Pr.Sci.Nat, of Global Geo Services (Pty) Ltd. The dumps are reported at 0
cm.kg/tonne cut-off and are inclusive of the entire dump material, i.e.
zero selectivity. Mineral resources are reported in accordance with
SAMREC. Mineral resources are not mineral reserves and do not have
demonstrated economic viability.
Uranium One plans to process material from the Dominion Dumps in addition
to the planned underground production from the Dominion Reefs disclosed in
SRK`s October 2006 independent technical report. The introduction of
tailings material is intended to maximize the use of the available plant
capacity while underground tonnage is being ramped up. During the 2007 -
2009 period, Uranium One expects to process approximately 1,000,000 tonnes
of slimes, at an average grade of 0.16 kg/tonne. The introduction of dump
material is expected to reduce the plant unit cost over the 2007 - 2009
period, with the largest benefit expected in the early part of this three
year period. Uranium One will provide guidance on expected production
increases, later in the year, subsequent to the commencement of production.
The Dominion Dumps drilling program was completed on June 7, 2006. A total
of 365 boreholes were drilled on the four areas totaling 1,643 metres. Of
these, 67 boreholes (768 metres) were drilled on Dump 3 (50m x 50m drilling
grid) and 216 boreholes (679 meters) on Dump 4 (30m x 30m drilling grid).
Drilling was achieved using hand-held auger drills with 50 mm outer
diameter pipes. Samples were collected at 1.5 metre depth intervals.
These yielded samples of approximately 3.5 kg each. A total of 517 and 489
samples were collected and analyzed at the Dump 3 and 4 areas,
respectively.
The boreholes were used to create a 3D wireframe of the dumps, which were
filled with regular blocks of 2.5m x 2.5m x dump vertical thickness and
used as the starting model for regularized blocks of 25m x 25m x 3m. The
uranium (kg/tonne) and gold (g/tonne) values were interpolated into the
regularized block model (using ordinary and simple kriging as the
estimation technique). For the final model, sub-cells were created to
represent an accurate volume. All drill data obtained and verified during
the drilling program were considered for the resource estimate.
In evaluating the economic viability of the Dominion Dumps for resource
classification purposes, the commodity prices applied for the Dominion
Reefs resource estimates were utilized. Extraction ratios of 89% and 79%
for gold and uranium, respectively, were based on test work undertaken at
Mintek Laboratories, an accredited metallurgical laboratory in South
Africa.
The resource estimate for the Dominion Dumps was prepared by Mr. Charles
Muller, B.Sc. (Hons), Pr.Sci.Nat. of Global Geo Services (Pty) Ltd.,
independent geoscience consultants to Uranium One, who is a qualified
person for the purposes of NI 43-101. Databases and analytical data were
verified by Dr. Richard Stewart through the analysis of certified reference
materials, duplicate sample and barren sample analysis.
The revised resource estimate for the Dominion Reefs, and the resource
estimate for the Dominion Dumps, have been audited by SRK Consulting and
will be contained in an independent technical report being prepared by SRK
Consulting for filing in accordance with the requirements of NI 43-101.
Dominion Exploration and Drilling
Dominion and Rietkuil Sections
Drilling at Rietkuil and Dominion is ongoing, with an estimated 75,000
metres scheduled for 2007. The objective of this program is to further
delineate the down-dip extensions of the identified high grade zones, as
well as confirm and delineate the newly identified high grade ore-shoots.
Exploration will also be undertaken in extension areas not currently
classified as resources.
Additional Prospecting Rights
Surface mapping has indicated a continuation of the Dominion Group,
outcropping to the west of the Dominion area. Based on the existing
geological modeling completed at Dominion, combined with surface mapping
and limited historic exploration data, a potential Dominion Reefs strike
extension of approximately 60 km to the west of the Dominion project area
has been identified.
In the process of applying for additional uranium prospecting rights
Uranium One identified and prioritized the area to the west of the existing
Dominion project area as the most important. Prospecting rights covering
this projected extension of reef development, from surface to depths of
approximately 500 metres, have been defined, comprising an area of 74,380
hectares. Uranium One has been formally granted prospecting rights over
some 57,565 hectares of the 74,380 hectares; prospecting rights over the
balance of this area are currently pending but applications have been
accepted by the Department of Minerals and Energy. Exploration in this
area is planned to commence early in 2007 and will include aerial-
geophysical surveys, surface mapping and surface exploration drilling. A
map showing the areas covered by the new prospecting rights as well as the
existing project area is available on the Corporation`s website at
www.uranium1.com.
The newly acquired prospecting rights have increased the strike extent of
the Dominion Reefs being explored at the existing Dominion Project by more
than 400%, an area comparative to that of the West Wits Line in the
Carletonville Goldfield (Witwatersrand Basin), hosting some of the major
South African gold mines.
Quality Assurance and Quality Control
The Dominion project drilling program, including the Dominion Dumps drill
program, is being carried out under the direction of Mr. M.H.G. Heyns,
Pr.Sci.Nat. (SACNASP), MSAIMM, MGSSA, Vice President, Geology and
Exploration, Uranium One, and Dr. R.A. Stewart, Pr.Sci.Nat. (SACNASP),
MGSSA, Regional Exploration Manager, Uranium One, both 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. Half-core assay
samples are collected by appropriately qualified personnel. Core samples
are prepared at an onsite preparation facility managed by Superlabs Ltd.
and are assayed at the Set Point Laboratory located in Johannesburg, South
Africa, which is accredited under SANAS and ISO/IEC 17025. Gold assays are
performed using conventional fire assay procedures with an inductively
coupled plasma optical-emission spectroscopic ("ICP-OES") finish on 50g
aliquots, and uranium assays are performed using X-ray fluorescence
spectrometry on a pressed powder pellet or a borate fusion disc. Quality
control procedures follow industry standard protocols and include the use
of blind control samples.
About sxr Uranium One
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 the
Dominion Uranium Project in South Africa and the Honeymoon Uranium Project
in South Australia, and is actively pursuing growth opportunities in the
uranium sector in the western United States. The Corporation holds an
approximately 71.4% interest in Aflease Gold Limited, which owns the Modder
East Gold Project in South Africa. Through a joint venture with Pitchstone
Exploration Ltd., the Corporation is also engaged in uranium exploration
activities in the Athabasca Basin of Saskatchewan.
For further information, please contact:
Neal Froneman Chris Sattler
Chief Executive Officer Vice President, Investor Relations
Tel: + 27 11 482 3605 Tel: + 1 416 350 3657
Cautionary Statement
No stock exchange, securities commission or other regulatory authority has
approved or disapproved the information contained herein.
This News Release includes certain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 and
"forward-looking information" within the meaning of applicable Canadian
legislation. All statements other than statements of historical fact
included in this release including, without limitation, statements
regarding potential mineralization, reserves, resources, estimates of
future mining, recovery, production rates and operating costs, and future
plans and objectives of Uranium One, are forward-looking statements (or
forward-looking information) that involve various risks and uncertainties.
There can be no assurance that such statements will prove to be accurate
and actual results and future events could differ materially from those
anticipated in such statements. Important factors could cause actual
results to differ materially from Uranium One`s expectations. Such factors
include, among others, the actual results of exploration activities, actual
results of reclamation activities, the estimation or realization of mineral
reserves and resources, the timing and amount of estimated future
production, costs of production, capital expenditures, costs and timing of
the development of new deposits, availability of capital required to place
Uranium One`s properties into production, conclusions of economic
evaluations, changes in project parameters as plans continue to be refined,
future prices of commodities, possible variations in ore grade or recovery
rates, failure of plant, equipment or processes to operate as anticipated,
accidents, labour disputes and other risks of the mining industry, delays
in obtaining governmental approvals, permits or financing or in the
completion of development or construction activities, Uranium One`s hedging
practices, currency fluctuations, title disputes or claims limitations on
insurance coverage, as well as those factors discussed under "Risk Factors"
in Uranium One`s Annual Information Form and Management`s Discussion and
Analysis as filed with securities regulatory authorities in Canada.
Although Uranium One has attempted to identify important factors that could
cause actual results to differ materially, there may be other factors that
cause results not to be as anticipated, estimated or intended.
There can be no assurance that such statements will prove to be accurate as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not place undue
reliance on forward-looking statements. Uranium One does not undertake to
update any forward-looking statements that are included herein, except in
accordance with applicable securities laws.
In addition, this news release uses the terms "indicated resources" and
"inferred resources" as defined in accordance with the SAMREC Code (South
African Code for Reporting of Mineral Resources and Mineral Reserves
prepared by the South African Mineral Resource Committee) ("SAMREC") under
the auspices of the South African Institute of Mining and Metallurgy
effective March 2000 or as amended from time to time. 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 drillholes 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 drillholes
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 drillholes.
Mineral resources which are not mineral reserves do not have demonstrated
economic viability.
The indicated and inferred resource estimates provided herein in accordance
with SAMREC will be reconciled to 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, in accordance with National
Instrument 43-1 01 - Standards of Disclosure for Mineral Projects, ("NI 43-
101") in the independent technical report being prepared by SRK for filing
in accordance with the requirements of NI 43-101.
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 South
African rules, estimates of inferred mineral resources may not form the
basis of feasibility or pre-feasibility studies or economic studies except
under conditions noted in SAMREC. 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.
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Uranium One`s website - www.uranium1.com.
Date: 17/01/2007 16:23:11 Produced by the JSE SENS Department.
