What Does a Uranium Deposit Look Like?
Given the attention swirling around the Patterson Lake discovery made by 50/50 partners Fission Energy (FSSIF.PK, or FIS on the TSX Venture) and Alpha Minerals (ESOFD.PK, or AMW on the TSX Venture), I thought it might be timely to provide some context with respect to the shapes of uranium deposits. In particular, I believe that the footprint of these deposits is important to understand when dealing with an early stage discovery. It is far too early to talk in specifics, so I'll use an existing deposit as an illustration.
Uranium deposits are formed where uranium-bearing fluids meet a chemically reducing rock-type, typically in areas of fracturing and/or faulting. The fractures and faults provide pathways for the uranium-bearing fluids to flow, while the reducing agent causes the uranium to fall out of solution and be deposited. In the case of Patterson Lake, the graphitic metapelite in the area appears to be the primary reducing agent, but there are also other rock types that can fulfill this role chemically. The main point that I'm trying to get across is that these are fluid- and fracture-controlled deposits, so don't expect them to behave "neatly." This is important when looking at drill hole data at an early stage, and I think it is best illustrated with a picture.
Below is an image taken from the Denison Mines corporate presentation. The image is of its Wheeler River Phoenix "A" Zone. I am not presenting this to make a comparison in terms of grade or size, but simply to illustrate the view of the deposit and how the interpretation of its shape changed over time. In the left frame is a top-down view from November 2010, while in the right frame is a top-down view of the same deposit after additional drilling 2 years later. The main thing I want to point out this the variability in the width of the "white" zone (which is the best grade in this case). Note how it pinches (thins) and swells (thickens). As more data was obtained, the deposit looked less like a uniform sausage and more like something a little more irregular, as it should, given these deposits are fluid-, fracture-, and fault-controlled.
It's early days at Patterson Lake for Fission and Alpha, but I have always believed that the more information and context one can have, the better. Based on conversations with people familiar with the Patterson Lake story, it became clear to me that most didn't appreciate the shape of a fracture/fault controlled deposit, so I'm presenting this deposit example as a framework for people to think about as the drill program progresses.
There is a lot of drilling left to do, but the early indications are that all of the elements necessary for forming a material uranium deposit (or deposits) are there. These indications are: 1) significant alteration over significant widths in favorable rock types, 2) uranium mineralization associated with this alteration (some of which appears to be very high grade), 3) mineralization already proven in two areas separated by 400 meters of strike, 4) significant untested strike length along a proven prospective corridor, 5) multiple as yet undrilled geophysical and geochemical (radon) targets along that corridor.
Beyond that, the future has yet to be written, but there's little doubt that Patterson Lake looks like it has the right zip code to deliver the goods. Knowing what a deposit looks like, or can look like, is critical in the early stages of discovery so as to avoid overestimating or underestimating the importance of any given drill hole. The key element that investors should want to see going forward is the expansion of existing mineralized zones either on land or in the lake... as long as that's the case, "pounds are being added," which is what drilling is all about.
Disclosure: I am long ESOFD.PK. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.