BIGRLYI (EME 53.3%)

 

The Bigrlyi deposit is a tabular sandstone hosted uranium vanadium deposit located on the northern margin of the Ngalia Basin, approximately 350km northwest of Alice Springs. The Bigrlyi Project comprises 10 granted exploration licenses in retention (ELRs). The project, which is a joint venture with Valhalla Uranium, a subsidiary of Paladin Energy Ltd (41.7%) and Southern Cross Exploration (5%), was subject to significant exploration activity for the period 1974 to 1982 including over 400 drill holes, resource estimations and metallurgical test work programs. The project was put on care and maintenance in 1983.

Energy Metals Ltd (EME) as manager of the Bigrlyi Joint Venture (BJV) recommenced field activities in November 2005 after a 23 year hiatus and following a detailed environmental assessment of the project and installation of appropriate radiation monitoring procedures. Initial work involved re-establishment of the exploration camp, validation of historic drilling and assay data and Aboriginal heritage surveys over the Bigrlyi tenements.

Several Drilling programs concentrating mostly on Anomaly 4 and Anomaly 15 deposits, were completed at Bigrlyi in the period from 2005-2011 with most holes intersecting significant uranium mineralisation. Uranium and vanadium resource estimates were successfully modelled incorporating results from these drilling programs.

The latest resource estimate was released in July 2011 (summarised below) with resources estimated by Hellman & Schofield Pty Ltd using the Multiple Indicator Kriging (MIK) method to estimate uranium resources and Ordinary Kriging (OK) to estimate vanadium resources.

Bigrlyi Mineral Resource estimate at a 500ppm U3O8 cut-off – MIK Model 2011.

 

Resource Category

Mt

U3O8 ppm

V2O5 ppm

U3O8 kt

U3O8 Mlbs

% Contrib

V2O5 kt

V2O5 Mlbs

Indicated

4.65

1366

1303

6.36

14.01

62

6.06

13.36

Inferred

2.81

1144

1022

3.21

7.08

38

2.87

6.33

Total

7.46

1283

1197

9.57

21.09

100.0

8.93

19.69

 

Bigrlyi Mineral Resource estimate at a 250ppm U3O8 cut-off – MIK Model 2011

 

Resource

Mt

U3O8 ppm

V2O5 ppm

U3O8 kt

U3O8 Mlbs

% Contrib

V2O5 kt

V2O5 Mlbs

Indicated

8.80

890

1026

7.83

17.27

59

9.03

19.91

Inferred

6.15

715

805

4.40

9.69

41

4.95

10.91

Total

14.96

818

935

12.23

26.97

100.0

13.98

30.82

 

Note: Tonnes are metric (2204.62 pounds); figures may not total due to rounding.

At a cut-off grade of 500ppm U3O8 the Bigrlyi MIK resource totals 21.09 million pounds (Mlb) of U3O8 and 19.69 Mlb of V2O5. Significantly 62.3% of the contained uranium metal (or 6.36 Kt U3O8) reports to the Indicated Resource category.

At a cut-off grade of 250ppm U3O8 the MIK resource totals 26.97 Mlb of U3O8 with most of this resource within 200m of the surface and potentially amenable to open cut mining. At both the 500ppm and 250ppm cut-off grades approximately 60% of the contained uranium metal reports to the Indicated Resource category.

Detailed metallurgical test work undertaken by EME confirmed that the major uranium bearing minerals are uraninite and coffinite, and the major vanadium bearing mineral is montroseite. This work has also confirmed the very high acid dissolution characteristics of the Bigrlyi ore with extraction levels of up to 98% uranium and 59% vanadium recorded from the base-case acid leach tests. Physical grinding (communition) testing and ‘front-end’ processing test work has also produced encouraging results.

A Pre-Feasibility Study (PFS) completed in mid-2011 confirmed that mining the Anomaly 4, Anomaly 15 and Anomaly 2 deposits using a combination of open pit and underground mining and processing ore through a relatively simple acid leach circuit would produce around 10 Mlb U3O8 and positive cash flow of around $120M over a mine life of approximately 8 years. The project economics are based on an assumed average uranium oxide price of $US80/lb and an $US/AUS exchange rate of 0.85. However, one key finding was that a substantial increase in the resource base that underpins the project would have a positive impact on the economics of the project, especially if those resources are amenable to open pit mining. To this end, in 2012 and 2013 Energy Metals exploration activities have focussed on the discovery and definition of additional resources in satellite deposits located on 100% Energy Metals ground in proximity to the main Bigrlyi resource. These programs have been aided by the application of geophysical techniques, in particular gradient-array induced polarisation (IP) surveys, which were successfully trialled in 2012, in order to locate sandstone units for hosting uranium mineralisation under sand cover.

Due to the depressed uranium market, the Joint Venture limited its activities at Bigrlyi for the period 2012 to 2014. Activities undertaken during this period included camp and site maintenance, rehabilitation works, ongoing radiation and environmental baseline studies, and bulk density measurements of archived drill core to assist with more accurate resource estimation in the future. Consultations with the local Aboriginal community, Traditional Owners and key stakeholders continued, with positive feedback received.