From Boom to Bust and Back Again: the uranium market and an overview of African occurrences

1
From Boom to Bust and Back Againthe uranium
market and an overview of African occurrences

• Presented by Richard Wadley

Botswana Resource Sector Conference, Gaborone, 25
July 2007
2
Outlook for Uranium worth looking for?
130/lb on 23 July 2007
!
SourceDustin J Garrow, Colorado Nuclear Inc.
(2006) media reports
3
Outlook for Uranium worth looking for
SourceDustin J Garrow, Colorado Nuclear Inc.
(2006)
4
Secondary Uranium Production

• From 1991, US and former Soviet Union began
• negotiating reductions in nuclear warhead
  levels

• In 1993, Russia agreed in principle to convert
  500t
• highly enriched U (HEU) from military
  stockpiles (enough
• for 20 000 warheads) to reactor grade, for
  purchase by USA
• (1t HEU is equivalent to 300t of natural
  uranium)

• By June 2006, 275t HEU converted, to 8090t
  fuel grade

• Agreement due to terminate in 2013

• US also converting 175t of its own HEU

• Currently, 13 (10 600t U3O8) of global
  reactor demand
• is met by dilution of HEU

Sources Uranium Information Centre
5
Outlook for Uranium worth looking for
SourceDustin J Garrow, Colorado Nuclear Inc.
(2006)
6
Uranium Supply / Demand Outlook

• Currently 443 operating nuclear reactors

• 28 reactors under construction
• another 74 approved
• 182 awaiting approval

• Globally, 16 of energy production is nuclear
• But, S Korea 45, Japan 30
• cf China, lt2, India 4

• Significant new capacity only expected by 2011

• Initially, new capacity will need to replace
  declining
• secondary production delayed planned
  production
• (e.g. Cigar Lake) and disruptions (e.g. Niger)

Sources Southern Cross Equities Financial Mail
UIC
7
Outlook for Uranium worth looking for!
130/lb on 23 July 2007
Inflation-adjusted
47/lb
nominal
Real 1979
SourcesDustin J Garrow, Colorado Nuclear Inc.
(2006) US Dept Labour
8
Long-term outlook for uranium prices

• Spot prices not sustainable

• Spot price not representative only 15 of U
  sold spot,
• 85 sold under contract

• But, contract prices already rising, to
  40-50/lb U
• contract terms increasing

• AngloGold Ashanti, for example, forecasts a
  long-term
• contractual price of 60 / lb U, which is
  twice the spot price
• of just 18 months ago

• And spot prices forecast to reach 200/lb in
  2008,
• to remain above 100/lb for several years

• Previously struggling mines (e.g. Rössing)
• and many formerly sub-economic deposits now
  viable

Sources Southern Cross Equities Financial Mail
company websites
9
Global Uranium Resources
Known recoverable Resources (RAR Indicated) to
130/kg U as at Jan 2005
Source UIC Nuclear Issues Briefing Paper 75,
June 2006, quoting OECD/NEA/IAEA Red Book
10
Mine Production (tonnes U) 2002 - 2006
11
Leading Uranium Producers in 2006
Camecos Cigar Lake to commence production at
rate of 7 000t/a in 2010 BHPBs Olympic Dam
planning to increase production to gt12 000t/a in
2011 Areva to add Imouraren (4 000t/a) in Niger
by 2011
Source World Nuclear Organisation (2007)
12
Internationally recognised types of uranium
deposit, according to importance

• Unconformity-related (35 of global resources)
• Sandstone (18)
• Quartz pebble conglomerate (13)
• Vein (9)
• Disseminated intrusive
• Breccia complex / collapse breccia pipe
• Surficial
• Metamorphic
• Volcanic
• Metasomatite
• Black shale
• Lignite/coal
• Phosphorite

Only these types have been recognised so
far among significant African deposits
Sources IAEA (1979) Cole (1998) Uranium
Information Centre
13
Principal types of Uranium mineralisation
Disseminated Intrusive deposits
Sources Kesler 1994 Jones 2006 MegaUranium 2006
14
Unconformity-related deposits

• Globally most important type virtually all
  Canadian (Athabasca Basin) and 20 of Australian
  production (Alligator Rivers, NT)
• U, mainly as pitchblende and coffinite, occurs as
  fracture / breccia fillings and disseminations in
  elongate, prismatic-shaped or tabular zones
  hosted by sedimentary / metasedimentary rocks
  located close to major continental unconformity,
  mainly within mid-Proterozoic, intracontinental
  sedimentary basins.
• Mineralisation fills spaces in breccias vein
  stockworks, with carbonate gangue uranium
  minerals alone or in association with Co-Ni
  arsenides, Au other metals.
• No unconformity-related deposits have yet been
  described in Africa, but aspects of
  Zambian/Katangan copperbelt deposits (e.g.
  Kawanga, Mitukululu in Domes Area) are consistent
  with this type.

Sources McMillan (1998) Andrews-Speed (1989)
Cosi et al (1992)
15
1
2
3
4
1 Rabbit Lake 2 Cigar Lake 3 McArthur River 4 Key
Lake (closed)

• Athabasca Basin
• home to 9 of global U resources
• and 25 of global U production

0
50
100 km
Source Intierra Ltd / Northern Miner
16
Sandstone-hosted deposits

• U precipitated as uraninite/coffinite in medium /
  coarse- grained continental fluvial or marginal
  marine sediments, under various reducing
  conditions, as roll-front or tabular,
  lenticular deposits
• Individual mineralised bodies small, but may be
  numerous and/or stacked low-medium grade.
• Significant deposits in Africa, of varying ages
• Gabon Franceville Basin (1800Ma) at Oklo,
  Mounana
• Niger Iullemeden Basin (440-100Ma) at Arlit,
  Azelik,
• Akouta, Mikouloungou, Teguida etc.
• Produced 3 434t U in 2006
• Karoo (250Ma) Rystkuil, Rietkuil etc (SA)
• Kayelekera (Malawi)
• Kanyemba (Zimbabwe)
• Njame etc.(Zambia)
• Folakara (Madagascar)
• Internationally USA Colorado Plateau, Powder
  River Basin, South Texas Kazakhstan

Sources Uranium Information Centre IAEA (1979)
wise-uranium.org Paladin Resources Robb (2005)
17
Sandstone-hosted U deposits in Central Africa
Kariba
Mavudsi
Sources Albidon/African Energy Resources
African Mining Omega Paladin
18
Quartz-pebble conglomerate deposits

• Principal example globally is the Dominion Reef /
  Witwatersrand sequence of SA
• U-bearing auriferous quartz-pebble conglomerates
  deposited in Meso-archaean (3000Ma) intracratonic
  basin, which migrated northwards as it filled
• U possibly deposited both as detrital allogenic
  uraninite in higher energy parts of basin (DR and
  proximal Wits) and by precipitation from
  solution, together with Au, under reducing
  conditions in distal regions.
• Other deposits of this type occur in Wits
  correlates such as the Mozaan Group (eg Denny
  Dalton mine)
• Internationally, only major deposit known was
• Elliot Lake (Canada), now closed

Sources Uranium Information Centre IAEA (1979)
World Nuclear Ass Cole (1998) Simpson Bowles
(1977)
19
South African Uranium Production,1952 - 2005
1980 7295t
94 from Witwatersrand
2005 795t
Total 186 000t
Sources SA Chamber of Mines Cole, 1998
20
Witwatersrand Uranium Production
Witwatersrand Uranium Production
Nearly all U production has come from the West
and Far West Rand and northern Free State
No primary producers all as by-product of Au
mining

• Major producers have been
• Vaal Reefs Complex....45 900t U3O8 to 2005
• Buffelsfontein..18 200t
• Hartebeesfontein16 500t
• West Rand Cons 13 000t
• Harmony.. 12 500t
• Randfontein Estates. 12 000t

Includes Moab Khotsong Great Noligwa Kopanang
Remaining resources (RAR EAR) recoverable at
lt130/kg 473 000t U (including tailings dumps)
Sources SA Chamber of Mines AngloGold Ashanti
mbendi.co.za Cole (1998) McCarthy Rubidge
(2005)
21
Surficial Uranium Deposits

• Typically young (Tertiary to Recent, lt60Ma),
  near-surface concentration of mainly carnotite
  (uranium vanadate) in sediments or paleosoils
  characterised by secondary cementation,
  especially by calcrete
• Deposits characteristically occur in valley-fill
  sediments along palaeo-drainage channels, i.e. in
  well-defined elongate, sinuous structures.
  Mineralisation may occur throughout the
  channel-fill, or in stacked lenses
• Principal African example is Paladins Langer
  Heinrich, in Namibia related deposits include
  Trekkopje (UraMin), Marenica, Tubas and Tumas
• Other African surficial deposits include
  Namaqualand (SA) Mudugh (Somalia) Babati
  (Tanzania) Bakouma (CAR) Mokobaesi, Seruli,
  Dukwe (Botswana)
• Yeelirrie (W Australia) is worlds largest
  surficial deposit 35Mt _at_ 0.15U308 44 000t U.
  Discovered in 1972, still unmined due to anti-U
  policies of Aust. Labour Party.

Sources Hambleton-Jones et al ( !986) IAEA
(1984) Uranium Information Centre Paladin
Resources P Nex
22
Langer Heinrich and related surficialdeposits in
Namibia
7

• Other deposits
• Aussinanis
• Tubas
• Tumas
• Welwitchia
• Spitskoppe
• Marenica
• Brandberg

6
5
4
2
3
1
Sources Hambleton-Jones et al (1986) P Nex
23
Langer Heinrich deposit

• Discovered in early 1970s
• Acquired by Paladin August 2002
• BFS completed April 2005
• Decision to proceed May 2005
• Commissioned, December 2006

• Total Mineral Resource _at_ 250ppm U3O8
• cut-off 80.5Mt _at_ 0.06 U3O8, of which
• 46 (JORC) Measured and Indicated
• Production at 1180t/a U308 for 11 years
• 100 owned by Paladin Resources

Gawib Flats
0
2km
Gawib River
Bloedkoppie Flats
Sources Paladin Resources Hambleton-Jones et al
(1986) P Nex
24
Disseminated Intrusive type

• Associated with granitic, pegmatite, alaskite,
  monzonite and alkaline intrusives
• Pan-African orogeny (500Ma) an important
  metallogenic province Namibian deposits at
  Rössing, Valencia, Goanikontes, Husab (uraninite
  with low ThU)
• Possible correlates Antsirabe pegmatites of
  Madagascar (betafite mineralisation) Njombe
  Dist. pegmatites of Tanzania
• Kibaran orogeny (1100Ma) also has potential,
  e.g. SA Concordia granites/Namaqua pegmatites /
  alaskites
• Intracratonic alkaline intrusives (e.g. Palabora,
  Pilanesberg in SA) also have potential for U in
  association with Th, REEs
• International examples include Ilimaussaq
  (Greenland) Radium Hill (S. Australia)

Sources Jacob et al (1986) Berning (1986) P
Nex, J Kinnaird (pers com) Bourret (1988)
Douglas Lake Mins
25
Rössing a disseminated intrusive uranium deposit

• Largest of its type and 3rd largest U mine in
  the world
• produced 3067t U in 2006 7.8 of global
  total

• Ore occurs mainly as low grade (0.03U3O8)
• uraninite (UO2) disseminated within
  leucogranite
• (alaskite) sheets, intruded into Damaran
• metasediments

• Multiple folding and amphibolite-granulite
  facies
• metamorphism before and after intrusions.
• Only later (post D3) sheets are mineralised,
  
• despite little compositional difference

• UTh ratio in mineralised alaskite 51, vs
  18 in
• upper crustal material
• Similar mineralogy at Valencia and Goanikontes

Sources Berning (1986) J Kinnaird, P Nex
(pers.com) World Nuclear Association
26
Vein deposits

• Medium - high grade mineralisation (mainly
  pitchblende /coffinite/brannerite) in carbonate
  and quartz gangue in vein stockworks. Usually
  located in post-orogenic continental
  environments, commonly with calc-alkaline felsic
  plutonic and volcanic rocks, in association with
  steeply-dipping fault systems. Economic deposits
  appear confined to areas underlain by Proterozoic
  basement rocks.
• Principal African occurrence is Shinkolobwe, in
  Shaba district of DRC also uraninite/brannerite/p
  itchblende mineralisation in veins associated
  with shear zones near footwall of Lower Roan
  sequence in Zambian/Katangan copperbelt, (e.g.
  Lumwana).
• In Algeria, U mainly as pitchblende in
  veins/stockworks in Hoggar Massif migmatitic
  gneiss sequence (500-1000Ma)
• Most important deposits are Jachymov (Czech
  Republic) Armorican Massif (France)
  Schwarzwalder (Colorado, USA) and Beaver Lodge
  (Saskatchewan) Baker Lake (NWT) in Canada

Sources McMillan (1996) IAEA (1979) Uranium
Information Centre Dahlkamp (1993)
27
Metamorphic deposits

• Characteristically, U occurs in zones of Ca-rich
  alteration within Proterozoic (gt550Ma)
  metamorphic sequences e.g. at closed
  Mary Kathleen mine, Queensland, Australia.
• Only known African deposit possibly in this
  category is Fort Dauphin deposit of S Madagascar,
  (sometimes classified as disseminated intrusive)
  uranothorianite, of possible epigenetic origin,
  occurs in lenses within pyroxenitic lineaments in
  metamorphic rocks of Pan-African age (550Ma)
• Fort Dauphin was mined, 1953-1966, its
  concentrates yielding gt1000t U3O8
• Tranomaro, a nearby deposit with reported similar
  style of mineralisation, is currently being
  drilled by Pan-African Mining Corp.

Sources IAEA (1979)Uranium Information Centre
Pan-African Mining Corp
28
Lignite / coal - related deposits

• Only known African deposit is Karoo-age Springbok
  Flats basin north of Pretoria, SA
• U concentrated in coal and carbonaceous shales in
  upper 1m of a Coal Zone, a unit up to 12m thick
  in upper Ecca Group Warmbad Formation (250-290Ma)
• U occurs as very fine (lt20 µm) disseminations
  within coal/carbonaceous shale, probably as
  organo-metallic compounds
• Considered to be of epigenetic origin, derived
  from migration of fluids from adjacent Bushveld
  granites
• Reasonably Assured plus Estimated Additional
  Resources given as 55 000t U at cost lt130/kg U
• No exploitation of field due to metallurgical
  constraints in separating U from coal.

Sources Cole (1998)
29
Potential for further uranium discoveries in
Africa some pointers (1)

• Macro-tectonic setting of the African continent
• four major cratonic blocks (Kalahari, Congo,
  Guinea, Nile) separated by several mobile belts,
  in particular the Kibaran (1100Ma) and
  Pan-African (500Ma) orogenies
• Some types of uranium deposit quartz-pebble
  conglomerate sandstone-hosted
  unconformity-related alkaline intrusive favour
  a cratonic setting
• Others, such as vein disseminated intrusive
  metamorphic occur mainly in mobile belt
  settings
• With the exception of surficial deposits, uranium
  deposits generally occur either within
  Precambrian rocks, or in younger platform
  sediment sequences close to, or immediately
  overlying Precambrian basement.

Sources IAEA (1979) Dahlkamp (1993)
30
Potential for further uranium discoveries in
Africa some pointers (2)

• Pan-African mobile belt extends across continent
  from Namibia, through Zambia, Tanzania to
  Madagascar, offering good potential for
  pegmatite/alaskite type deposits.
• Kibaran of West Africa Hoggar / Aïr Massif of
  Algeria / Niger are similar, though older and
  less explored
• Intracontinental basins like Tim Mersoï (Niger)
  and Franceville (Gabon) have demonstrated great
  economic potential for sandstone-hosted deposits,
  despite disappointing results to date from the
  southern Karoo Basin (in SA).
• Definite potential for unconformity-related
  deposits, e.g. in Zambian/Katangan copperbelt
  environment

Sources Carlisle (1983)IAEA (1979)
31
Potential for further uranium discoveries in
Africa some pointers (3)

• Formation of surficial deposits is dependent not
  only on proximity of suitable provenance rocks
  but also, importantly, on extreme aridity and
  (recent) geomorphic stability

• Economic calcrete deposits are non-pedogenic
  
• they result from near-surface groundwater
  transport
• of mineralisation to suitable traps viz
  concentration
• of such deposits on the arid west coasts of
  Australia,
• Namibia and South Africa.

• This suggests potential in Algerian Sahara,
  adjacent
• to Hoggar and possibly in NE Africa (Eritrea)

Sources Carlisle (1983)IAEA (1979)
32
So, whos out there looking for uranium in Africa?
The positive market outlook, reflected in current
high spot prices, has encouraged unprecedented
interest in the sector,
for example, in Botswana
N

• Bannerman Resources
• - Dukwe Serule
• (surficial deposits)

F
MOKOBAESI

• A-Cap Resources
• - Mokobaesi 1
• (surficial Karoo s/s)

SESE

• UraMin
• - Botsalano Ring Complex
• (IOCG breccia?)

M

• African Energy Resources
• - Sese tenement
• (surficial?)

G
BOTSALANO
Sources company websites
33
So, Whos out there looking for Uranium in
Africa ? (2)

• Namibia 21 licences in H2 of 2006 alone,
  including
• Uramin Trekkopje (definitive
  FS under way
• trial mine in
  Q4/2007 production in 08)
• Western Australian Metals
  Marenica
• Kalahari Minerals/Extract
  Resources Husab
• Forsys Metals Valencia
  
• Bannerman Goanikontes,
  Welwitchia, Swakop

• South Africa Uranium One Dominion Reef
  (mine plant in
• 
  operation July 07 production to
• 
  be 1 725t/a in Phase 1)
• First Uranium
  Ezulwini (1 360t/a mine by 2009),
• 
  Buffelsfontein (tailings process)
• UraMin
  Rystkuil (FS), Springbok Flats
• AngloGold studying
  expansion of existing
• 
  25y-old 680t/a plant to 900t/a by 2009
• 
  

Sources mining company websites
wise-uranium.org
34
So, Whos out there looking for Uranium in
Africa?(3)

• Zambia African Energy Resources Gwabe,
  Njame North
• OmegaCorp Kariba
• Equinox Lumwana (U leach
  circuit)

• Mozambique OmegaCorp Mavudsi (Moatize)
• UraMin - Meponda

• Malawi Paladin Kayelekera (commences 1
  360t/a, 2008)

• Tanzania SubSahara Resources Selous Basin

• Madagascar Pan African Mining Tranomaro,
  Antsirabe

• C A R UraMin Bakouma (BFS in progress)

• Niger Somair/Cominac/Cogema Air, Imouraren
• Northwestern Minerals/UraMin
  Irhazer, In Gall
• CNNC Teguida (700t/a by 2010)
• Semafo - Arlit

But current civil unrest disrupting
activities
Sources wise-uranium.org company websites
35
Sandstone U deposits in Niger
Irhazer, In Gall Kamas, Dabala
Akouta
Source Northwestern Minerals
36
So, Whos out there looking for Uranium in
Africa?(4)

• DRC Brinkley Mining/CGEA 5 targets

• Cameroon NU Energy Kitongo, Lolodorf

• Chad UraMin 4 targets

• Guinea Murchison United - Firawa

• Senegal UraMin - Saraya

• Morocco Toro Energy

In summary, at least 30 companies are
actively exploring for, developing or
already mining uranium deposits at almost 50
sites in more than 20 African countries. And
most of this activity commenced within the last
two years
Sources wise-uranium.org mining company websites
37
Uranium in Africa - Summary

• Currently only three African countries (Niger,
  Namibia, SA) are uranium producers, each
  predominantly from a different type of host
  sandstone, surficial and quartz-pebble
  conglomerate, respectively

• The forecast medium-term excess of demand over
  supply,
• reflected by sharply rising prices, has
  re-awakened huge
• interest interest in uranium exploration
  globally, but
• especially in Africa during the last two years

• The unique combination of several cratonic and
  inter-
• cratonic (mobile belt) settings, together with
  large
• intracratonic basins and stable, arid
  continental margins,
• makes the African continent a logical and
  exciting target
• for exploration.

Thank you!
38
References

• Andrews-Speed, CP (1989) The mid-Proterozoic
  Mporokoso Basin, northern Zambia Sequence,
  Stratigraphy, Tectonic Setting and potential for
  Gold Uranium Mineralisation. Precambrian
  Research 44 (1-17)
• Berning, J (1986) The Rossing Uranium Deposit,
  SWA/Namibia. In Mineral Deposits of Southern
  Africa, (1819-1832)
• Bourret, W (1988) Uranium-bearing pegmatites of
  the Antsirabe-Kitsamby District, Madagascar. Ore
  Geology Reviews 3 (177-191)
• Carlisle, D (1984) Surficial Uranium Occurrences
  in relation to climate and physical setting. In
  IAEA Surficial Uranium Deposits Workshop
• Chamber of Mines of SA (2006) Facts Figures
  booklet 2005. www.bullion.org.za
• Cole, DI (1998) Uranium. In The Mineral
  Resources of South Africa 6th Edition, Handbook
  16, Council for Geosciences, Pretoria.
• Cosi, M et al (1992) Late Proterozoic thrust
  tectonics, high pressure metamorphism and uranium
  mineralization in the Domes Area, Lufilian Arc,
  northwestern Zambia. Precambrian Research 58
  (215-240).
• Garrow, DJ (2006) Nuclear Power and the
  international uranium market. Presentation on
  behalf of Colorado Nuclear Inc at 15th Annual
  Conference Mineral Economics and Management
  Society.
• Hambleton-Jones, BB et al (1986) Uraniferous
  surface deposits in southern Africa. In Mineral
  Deposits of Southern Africa (2269-2287).
• IAEA (1979) Uranium Ore Deposits in Africa
  Proceedings of a regional advisory group meeting,
  Lusaka, 14-18 Nov., 1977.
• IAEA (1984) Surficial Uranium Deposits report
  of working group on uranium geology.
• IAEA (2006) Uranium 2005 Resources, Production
  Demand
• Jacob, RE et al (1986) The regional geological
  and structural setting of the uraniferous
  granitic provinces of South Africa. In Mineral
  Deposits of Southern Africa (1807-1819).
• Kinnaird, J (2007) personal communication
• McMillan, RH (1996) Mineral Deposit Profiles,
  Ministry of Energy, Mines and Petroleum
  Resources, Government of British Columbia, Canada
  (www.em.gov.bc.ca)
• Nex, P (2007) personal communication
• Robb, L (2005) Introduction to Ore-Forming
  Processes. Blackwell.
• SEDAR.com (2007) Canadian mining company
  reports. www.sedar.com
• Simpson, PR Bowles, JFW (1977) Uranium
  mineralization of the Witwatersrand and Dominion
  Reef Systems. Phil.Trans.R.Soc.Lond.A, 286

39
For more information please contactRichard
WadleyMSA Geoservices (Pty) LtdTel 083 609
1425email yeldaw_at_mweb.co.za

• Thank You