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Comparisons with Uranex’s neighbour Mantra Resources might be some way off but the former is aiming in a similar direction.
Now it’s just up to the company to prove the resources are there. Uranex this week released the latest round of drilling results from its Mkuju project in Southern Tanzania, revealing further encouraging signs from a high-grade area covering about 500m of strike at Likyuyu North. Exploration at Uranex's Mkuju ground in Tanzania. The market has rewarded the company since it changed tack in September last year from chasing large, low-grade projects to higher grade, smaller deposits, and Uranex managing director Matthew Gauci said Mkuju was shaping up as a positive example of the potential of this approach. “When we focused on Mkuju we deliberately made the decision to focus on projects which could be higher grade, and sandstone hosted, and which had a better mineralogy [than our other projects], which is uraninite. So we’ve ticked all those boxes,” he said. Gauci told HighGrade while comparisons with the company’s next door neighbour Mantra Resources – currently subject to a $A1.02 billion takeover offer from Russia’s state-owned ARMZ – were premature Uranex was aiming for something similar at its namesake Mkuju project. Uranex’s last round of drilling in particular achieved its aim of proving that the project hosts a paleaochannel deeper than 80m with decent uranium grades. “It was just speculative before but obviously we’ve proved that there is a channel there that has significant and high grade uranium – it extends over about 600m on a 5km strike – so the most important thing is providing us with a good level of confidence that the next round of drilling can be kicked off with a fair degree of optimism,” Gauci said. The company has a further 6000m of drilling starting this month, which will go towards a resource that Gauci said the company would like to have defined by December this year, although if the results are strong enough it could be earlier. The current program will be completed by July at the latest and once that has been done Gauci said the company would have a fair idea about whether or not it would be able to establish a resource or need to keep defining mineralisation through the paleaochannel. If the mineralisation at Mkuju continues to lives up to the early promise, the grades could be better than 500 parts per million uranium, and as the uranium at the project is a sandstone hosted uraninite in a paleaochannel it could be amenable to lower-cost in situ leaching mining. Uranex will be conducting metallurgical studies this year with material to be sent to ANSTO for preliminary testing to confirm these assumptions. The focus on higher grades seems to have been a wise move in more ways than one given the current jitters around the uranium market due to the Fukushima nuclear incident, with analysts suggesting uranium juniors looking to develop large and costly projects might face greater difficulty. Gauci said the company’s decision to look for higher quality projects was clearly paying off, with the company’s share price still significantly higher than it was last year even given the impact of the events in Japan and the lower spot uranium price. Three factors drove Uranex’s share price from A14c in September last year to A90c in early January: the uranium price, which moved from $US40 to $US75 in that period, the Mantra Resources takeover bid right next door, and the company’s drilling results. The events in Japan, however, saw its share price drop back down to A38c. “It’s just business as usual for us – medium to long-term we don’t see any changes in the demand structure,” Gauci said. He said the company also had no immediate plans to take advantage of its still higher share price with a capital raising, as with the exercise of options the company would have about $A5 million in the bank even after the current drilling program. As for the Mantra comparison, Gauci said the company recently toured through Korea, China and Japan and spoke to a number of end-users, all of which had been on site visits to Mantra’s project, and all of which were very keen on projects in southern Tanzania. Uranex also met with ARMZ, the Russian group currently bidding for Mantra. “There is obviously a lot of interest from those groups in the whole area of southern Tanzania. And because we’ve got such a large landholding and our results are stacking up to be similar to Mantra’s project, we can only see that interest growing,” Gauci said. The company is also on the verge of announcing some movement on coal tenements in southern Tanzania as well, another hot commodity for Africa. Gauci told HighGrade this week there should be news on the company’s coal aspirations any day now. |
