*Fewster/Eaglefield Holdings (next door to EPS)comment excerpt to the Uranium Senate Inquiry as below:
'From the infrastructure side, there is also a very large resource of what we call oily lignite—oil rich lignite—in our same lease area. The deposits themselves are hosted by this oil rich lignite. We have had some preliminary work done on that, and it suggests that potentially it could deliver upwards of four barrels per tonne of oil by conversion of coal using fairly sophisticated technology that has not been commercialised yet. But, even using existing technology, the deposit appears to carry about two-thirds of a barrel of oil per tonne of coal in the ground. We have not calculated the size of the resource yet, but estimates are that it is in the order of 250 to 500 million tonnes, so the oil resource potentially within the deposit is in the order of 500 million to a billion barrels of oil. There are a number of other oily lignite deposits around Western Australia around the eastern Goldfields and the Esperance area and from Esperance around through Balladonia. All of them have one major deleterious element and that is that they are very salty. Processing those lignites requires the removal of the salt and that requires access to large amounts of fresh water. None of the deposits in the south have access to fresh water or brackish water. Again, we have a very large supply of brackish water virtually on site. We would envisage that, once infrastructure was in place, it will be possible to look at our resource development. Our development model is to mine the coal, put it in a slurry and pump it down to Kalgoorlie or somewhere east of Kalgoorlie to some sort of a process facility down there. By doing that it would allow all the other resources in the area to feed into that same facility, given that there would also be a supply of fresh or brackish water that would also go with the coal. Longer term we see this Mulga Rock area as potentially one delivering enormous benefits. Should there be a mining operation out there, clearly that would be focused on the Goldfields or on Kalgoorlie-Boulder. That would be our centre of operations, effectively. Moving forward, we see the potential to use it as a staging point effectively for the delivery of potable water to the whole Goldfields region. Moving on from there, there is this energy resource that we have, which is clearly huge in size, which again could be the foundation for a very large liquids fuel industry in the eastern Goldfields region. We have contemplated and had discussions with some organisations about the concept of constructing an aluminium smelter in the Kalgoorlie-Boulder region fed from this obviously huge energy resource that we know is out in that region. That is something that is still open for more discussion.'
*Heron (since spun-off to create EPS) response to Uranium survey (27/03/06) as below:
A-Z Uranium Sector Snapshot (Part Six - H/I)
Monday, March 27, 2006 Michael Vaughan
AS URANIUM passes $US40 per pound, MiningNews.net asks 15 questions of the companies comprising Australia's growing uranium sector. The survey will be published daily for the rest of March.
HERON RESOURCES Share price (at March 17): 46c Market cap (at March 17): $77.85 million
1. Where is your mainstay project located? The uranium projects held by Heron resources are mainly located in Western Australia with two other projects located in the Northern Territory and Queensland. There are six projects in total, including: Mt Dennison (Arunta Block), Pandanus West (George Town Block), Ida Valley (Yilgarn), Mt Phillips (Bangemall Basin) and Balladonia and Kakarook (Eucla Block). However due to other commitments all projects currently for sale (call +61 8 9315 5717)
2. When was it discovered? N/A
3. What is the company's stake in the project? 100%
4. What work programs have been completed at the project? How much drilling has been carried out? Previous exploration used chip sampling and remote techniques to identify uranium mineralisation and potential targets.
5. What style/type of uranium mineralisation is at the project? They are a combination of secondary calcrete hosted, secondary sandstone/lignite hosted and primary bedrock hosted.
6. What are the dimensions of the mineralisation? What are the levels/tenor/grade of mineralisation? The Balladonia region oil shale resources are swamp deposits formed in Eocene-aged paralic lake valleys at the western edge of the Eucla Basin Sea. From previous work, there is potential for several hundred millions of tonnes of oil-bearing lignite.
7. Is the project essentially a 'greenfields' proposition, or does it have a JORC-compliant resource? If it is not 'greenfields' and if it doesn't have a JORC resource, how much work needs to be done in order to establish one? All projects are considered greenfields projects however, their prospectivity is supported by geophysical anomalies and anomalous rock chip samples up to 0.6% uranium oxide.
8. What is the potential size of the deposit? At Balladonia, in addition to the lignite and mineral sand potential there is considerable potential for Mulga Rock style uranium mineralisation which is reportedly the third largest uranium deposit in Western Australia, and has a resource of approximately 10.8 million tonnes grading 0.12% uranium. The exploration model for the Ida Valley project is carnotite in valley calcrete, with the analogy being the Yeelirrie deposit, which occurs in a parallel drainage system 180km to the north-west.
9. How much cash has the company budgeted to spend on the ground at the project during 2006? N/A
10. What is the company's current cash position? N/A
11. Which contractors/consultants has the company been/intend using? N/A
12. How is the project located in terms of infrastructure? N/A
13. How far away is a potential development? What is the potential size and timeline? N/A
14. What are the potential capital/operating costs of the development? When will you likely know? N/A
15. What are the main hurdles to reaching a development decision? N/A
*Eaglefield response to Uranium survey (27/03/06) as below:
EAGLEFIELD HOLDINGS Private company
1. Where is your mainstay project located? Our main uranium project is the Mulga Rock Polymetallic Deposit (MRD), located in the southwest Gunbarrel Basin region of Western Australia, about 700km from Perth and 240km from the city of Kalgoorlie-Boulder. The MRD is entirely within, and part of the larger Narnoo Project. The MRD comprises three individual deposits, named Ambassador, Emperor and Shogun. The Narnoo Project covers a total area of about 1100sq km and includes multiple resources and prospects of uranium, gold, oily lignite and nickel-cobalt.
2. When was it discovered? The MRD were discovered, and evaluated by PNC Exploration Pty Ltd during the period 1979 to 1990. PNC was an entity owned by the Japanese Government with a strict charter to pursue only U exploration. In the period 1990 ¡V 2000 PNC held the resource via a small number of mining leases, but did no additional fieldwork. They were forced to divest the resource in 2000, following abolition of the parent department by the Japanese Government. Eaglefield and Narnoo Mining then acquired the resource via Exploration Licenses, with the tenements granted in February 2003.
3. What is the company¡¦s stake in the project? A private company, Narnoo Mining Pty Ltd, owns 100% of the project. Narnoo Mining is administered by Eaglefield Holdings Pty Ltd.
4. What work programs have been completed at the project? How much drilling has been carried out? PNC spent some $11 million in historical dollars within the project area. About 1600 drillholes were completed (both RC and diamond), of which about 400 are within the perimeters of the MRD. PNC, or consultants also completed: resource estimations; pre feasibility and mine development scoping studies: mineralogical and metallurgical studies; flora, fauna and radioecology studies, archaeological studies; and hydrogeological studies. Eaglefield and associated parties have spent a further $2 million, including about $600,000 on the MRD. The largest proportion of the MRD expenditure was on metallurgical studies (AAL:SX) of the ore.
5. What style/type of uranium mineralisation is at the project? The MRD are located within the Narnoo Basin, a small intra-cratonic basin located on the north east margin of the Yilgarn Craton. The sedimentary succession in the basin range in age from Cretaceous to Pliocene, but the majority are of Middle to Late Eocene age. The uranium is part of a globally unique form of polymetallic, typically lignite-hosted mineralisation that has formed as a tabular sheet beneath a Late Eocene unconformity. Structure has a major influence on both distribution and grade of the mineralisation. The mineralisation is also strongly vertically zoned, and less so horizontally (away from structure) with the general major element trend of Au-(Ni-Co)-(Sc-V-U). A large suite of other elements are also locally present in the in the resource, including Pt, Cu, Zn and REE. There are no known analogues to the MRD elsewhere in the world.
6. What are the dimensions of the mineralisation? What are the levels/tenor/grade of mineralisation? At the 0.5kg/m U grade thickness contour, the MRD cover a total area of over 8sq km. The uranium zone within this contour ranges in thickness from 0.5m to about 5m, but this is typically underlain by one or more layers of Ni-Co„bAu mineralisation. However, the distribution of these lower layers is presently poorly defined. Vanadium and scandium are typically associated with the uranium zone. The estimated average grade (non JORC) for the MRD is about 1.1 Kg/t (~2.4 lbs/t) uranium oxide, but ranges from about 2 Kg/t uranium oxide at Ambassador to 0.8 kg/t at Emperor.
7. Is the project essentially a 'greenfields' proposition, or does it have a JORC-compliant resource? If it is not 'greenfields' and if it doesn't have a JORC resource, how much work needs to be done in order to establish one? None of the MRD resources are at JORC standard, as they were determined over the period of 1984-88. However, we have a high level of confidence in the historic uranium resource estimates, as we have acquired all historic raw drill and assay data. The known magnitude of the Ambassador Deposit is sufficient for it to be subject to immediate Feasibility Study. Conversion of the uranium resource to JORC Indicated and Inferred status will require only a small amount of confirmation drilling prior to modelling. The estimated cost is $150,000. Estimation of the associated Ni, Co, V and Au resource at Ambassador is not possible at present as PNC did not typically assay core samples for these elements. No sample remains from the historic diamond drilling, but in many instances, these holes were terminated too shallow anyway. However, continuity of this mineralisation is indicated from the small number of drillholes through the resource (some historic, some recent) with multi-element assay data. Fortunately, sufficient data will be acquired for Ni, Co, V and Au resource estimation via the infill drilling that is intended to take the uranium resource to measured status. This infill is anticipated to require 450 drillholes, have a direct cost of up to $2 million and take about six months to complete. Estimations of the uranium resources at Emperor and Shogun to JORC Inferred status via validation of historic data should also be relatively easily achieved at a cost of less than $100,000. There is no plan at present to infill drill either of these deposits or determine co-product resources in the short term. The Narnoo Project contains an abundance of both brownfields and greenfields prospects, and these will be evaluated concurrently with Ambassador Feasibility Study.
8. What is the potential size of the deposit? The total estimated uranium resource in the MRD, determined by PNC, and Robertson Research (PNC's consultants; now named Robsearch), is about 46,000t uranium oxide at a 300-500ppm uranium cut off. This resource, defined by about 400 RC and diamond drill holes is subject to JORC confirmation, but probably conforms with the class of Inferred with some Indicated (mineralisation is typically both grade and geologically continuous). The Ambassador resource calculated by PNC via a polygonal method at 300ppm cut off, and excludes all drillholes with less than 0.1m% uranium grade-thickness value. The pending JORC estimated Resource will be larger as a 200ppm and 0.05m% grade-thickness cut offs will be applied. The Emperor and Shogun resource estimates are via a block models (250 m x 250 m and 100 m x 100 m respectively) by Robsearch at a 500ppm uranium cut off, and include all material assigned to the "full selective mining" model. The SG (dry basis) used for the entire resource was 0.8, which maybe too low.
9. How much cash has the company budgeted to spend on the ground at the project during 2006? Expenditure will depend on the timing of commencement of the Ambassador Feasibility Study. Commencement is on hold pending resolution of the litigation instigated by Bullion Minerals Ltd.
10. What is the company's current cash position? N/A
11. Which contractors/consultants has the company been/intend using? All are undecided.
12. How is the project located in terms of infrastructure? The project is well located in terms infrastructure and environmental and safety issues that will be associated with uranium mining when it is eventually permitted in WA. Abundant water resources and possibly energy resources (i.e. lignite and predicted associated coal-bed methane) are located nearby. Kalgoorlie is about 320km by road, but only 250km by air. Movement of yellow cake to the rail head at Parkston (for eventual export through established systems in either SA or the NT) can be achieved without impact on any major roads or residential areas.
13. How far away is a potential development? What is the potential size and timeline? Under optimum conditions, Ambassador could be developed within three years. The estimated annual production of key commodities is shown below.
14. What are the potential capital/operating costs of the development? When will you likely know? Eaglefield has calculated indicative Capex and Opex costs for development of Ambassador using available data. The revenue data (which excluded scandium) is calculated using production at the lower end of the ranges shown above (see below). These models give great confidence that the Ambassador Deposit will sustain a very profitable operation for the duration of the mine life (i.e. Greater than 10 years).
All in A$million. Values for uranium oxide, Ni, Co, vanadium oxide = US$35/lb, $6/lb, $10/lb, $10/lb respectively and US$0.75 = A$1.00. Approximate commodity outputs used (tpa): Uranium oxide, Ni, Co, vanadium oxide = 1000; 2200; 1200; 200 respectively.
Note that these figures are preliminary in nature and are intended to provide only a general indication of project scale and economic robustness. Considerable refinement will result from subsequent pre-feasibility and feasibility studies.
15. What are the main hurdles to reaching a development decision? Two hurdles exist to commencing development of the Ambassador deposit, Resolution of the litigation instigated by Bullion and a favourable adjustment in the policy of the WA Government to permit mining of uranium in the state.
EPS Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
