Thursday, October 27, 2011

China Expected To Shake Up Global Uranium Market

Published on Thursday October 27 2011

CHINA over the next decade is tipped to do for uranium what it has done for iron ore, with demand to rise significantly.
Interest in the energy source is increasing again after a decline due to last year's Fukushima nuclear disaster in Japan.

CRU Strategies associate consultant Alan Trench told yesterday's Mining 2011 Resources Convention in Brisbane that Chinese demand could transform the uranium market over the next decade, just as it had shaken up iron ore.

The consensus among keynote speakers yesterday was that uranium was the commodity to watch. The mood was less positive about the iron ore price, which had softened in recent weeks.

Peter Kerr, chief financial officer of uranium takeover target Bannerman Resources, said the sector was definitely improving after a difficult year following the Japanese disaster.
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China's Hanlong Group made a $145 million bid for Bannerman in July. The target rejected the offer as too low but is talking to the suitor and other parties about developing its Namibian project.

Mr Kerr said the discussions had covered growth in China and its nuclear power ambitions.

"It gives us, as a junior uranium developer, some comfort that there are people in China saying this is not a slowdown and that there is evidence that there is real driving growth here," he said.

Global mining giant Rio Tinto put its weight behind the sector with its $C578m ($549m) bid for Canadian uranium junior Hathor Exploration. The market is also waiting for Extract Resources to be taken out as a result of China's Guangdong Nuclear Power bidding for the Namibia-focused company's major shareholder, Kalahari Minerals.

"It has been tough because of the political comments that have been made, but when you look at the fundamentals of what the big developing countries want to do, the fundamentals are very strong," Mr Kerr said.

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Monday, October 24, 2011

Black Range Minerals Limited (ASX:BLR) Completes Drilling Program At The Hansen Uranium Deposit

Published on Monday October 24 2011

ASX Listed Black Range Minerals is pleased to advise that it has completed its inaugural drilling program at the Hansen and Picnic Tree Uranium Deposits in Colorado, USA.

A total of eight diamond core holes were drilled at the Hansen Deposit for 1,741 metres and a further three diamond core holes for 170 metres were completed at the Picnic Tree Deposit. These holes were drilled to obtain additional geological, geotechnical, metallurgical and hydrological data.

Data acquired will be used to update the previous feasibility studies that were undertaken into the development of the Hansen Deposit during the early 1980s.

Analytical results from recent drilling at the Hansen Deposit have been reported previously. These included:

- 11.1 metres at 0.111% eU3O8, including
4.1 metres at 0.165% eU3O8,
1.8 metres at 0.200% eU3O8
- 1.7 metres at 0.138% eU3O8
- 24.8 metres at 0.070% eU3O8
- 13.4 metres at 0.063% eU3O8

- 33.5 metres at 0.061% eU3O8, including
10.1 metres at 0.093% eU3O8,
4.3 metres at 0.100% eU3O8, and
1.5 metres at 0.171% eU3O8

Drilling at the Picnic Tree deposit confirmed the presence of shallow, high-grade mineralisation.
Results in HNDD0011 included:

- 6.1 metres at 0.203% eU3O8, from 40.5 metres, including 4.3 metres at 0.277% eU3O8, from 41.2 metres

It is noted that numerous holes drilled during the recently completed program were located primarily to evaluate geotechnical conditions, rather than to evaluate resource grade, thickness and continuity, which has been well defined with the abundance of previous drilling data.

Representative ore samples from both the Hansen and Picnic Tree Deposits are now being collected.

These will be sent to suitable laboratories for metallurgical test work.

Mine design work for both deposits has also commenced. This work is an integral part of updating the historic feasibility study and determining the optimal development path for the Project. Results of this ongoing work will be reported as they come to hand.

Background - Hansen/Taylor Ranch Uranium Project

The Hansen Uranium Deposit was discovered in 1977 and fully permitted for mining in 1981. The global uranium market subsequently collapsed and mining never eventuated.

More than 1,000 holes were drilled and three feasibility studies completed to evaluate the Hansen Deposit previously.

The Company now holds a direct 24.5% equity interest in the Hansen Uranium Project that covers approximately 3,500 acres and includes the Hansen and Picnic Tree Uranium Deposits. It also holds the exclusive right to secure the remaining 75.5% interest in this Project area, together with the exclusive right to acquire a 100% interest in a further 9,500 acres at the Taylor Ranch Uranium Project, which is located immediately adjacent to, and north of, the Hansen Project.

When applying a 0.025% cut-off grade, the JORC Code compliant Indicated and Inferred resource for the combined Hansen/Taylor Ranch Uranium Project comprises:

68.9 Mt at 0.060% U3O8 for 90.9 million pounds of U3O8

The high-grade and robust nature of the mineralisation at the Hansen/Taylor Ranch Project is demonstrated when applying a 0.075% cut-off grade to the resource calculation. The JORC Code compliant Indicated and Inferred resource for the combined Hansen/Taylor Ranch Uranium Project then comprises:

16.6 Mt at 0.120% U3O8 for 43.8 million pounds of U3O8

The combined Hansen/Taylor Ranch Uranium Project is one of the largest uranium projects within the USA - which as a nation is the largest consumer of uranium in the world. With domestic mines within the USA producing less than 10% of the uranium consumed in the country on an annual basis, the development of such a large and strategic asset should be regarded highly.

Black Range continues to advance feasibility and environmental studies at the Hansen/Taylor Ranch Uranium Project as quickly as possible.

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Saturday, October 22, 2011

Rio Begins Focus On Uranium

Published on Saturday October 22 2011

RIO Tinto has placed another big bet that uranium demand will rebound from its post-Fukushima decline.

Following its $342 million contribution to the $500 million equity raising by troubled Ranger uranium miner ERA, Rio has now slapped down $C578 million ($A554 million) in a white-knight bid for Canada's Hathor Exploration.

But to secure control of Hathor and its super-high-grade Roughrider deposit in Canada's Athabasca Basin in northern Saskatchewan, Rio will first have to see off the home-town favourite to secure control of Hathor - Cameco.
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Cameco, which dominates the Athabasca, home to more than 23 per cent of the global supply of uranium, put Hathor in play on August 30 with a $C3.75-a-share unsolicited offer. Hathor went looking for a white knight and found one in Rio with its agreed $C4.15 a share counter-offer.

Hathor shares promptly ran to $C4.40 a share as investors bet that Cameco - Canada's uranium king and owner of nearby mines in the Athabasca - would have to come back with a higher offer, one that in the first instance would have to cover the $C20 million break fee that Rio secured with Hathor.

Hathor's pride and joy is its Roughrider deposit. It is not overly big at 26,000 tonnes of uranium but its grade of more than 11 per cent uranium oxide is exceptional compared with global averages. In comparison, ERA's Ranger mine in the Northern Territory grades less than 1 per cent uranium oxide.

A preliminary economic assessment of Roughrider indicated that it had a net present value of $C1 billion. But that was based on only part of the known resource, with drilling by Hathor pointing to resource upgrades over time.

Rio's agreed bid for Hathor does not have to pass Canada's ''net-benefit'' test for foreign investment because the book value of Hathor's assets falls below the trigger point for Ottawa to get involved.

It was the net-benefit test that last year brought undone BHP Billiton's $40 billion for Potash Corp. BHP walked away from the bid after a provincial political backlash to foreign control of Potash meant Ottawa was not going to give the OK.

But Rio does face a longer-term issue should it win the day with the Hathor bid and look to develop Roughrider. That is because Canada limits foreign ownership of producing uranium mines to 49 per cent. Higher levels are OK if the project is considered Canadian-controlled or if a Canadian partner cannot be found.

As good as its grade is, Roughrider is years away from development, giving Rio time to sort through the foreign investment issues.

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