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Cauldron Energy Receives $1M Loan To Start Bennet Well Uranium Drilling

Cauldron Energy (ASX: CXU) has received a $1 million loan from major shareholder Cape Lambert Resources (ASX: CFE) that will be used to initiate drilling at its Bennet Well uranium deposit in Western Australia.

Funds will also be used to assist with the implementation of the Company's exploration programs on its prospective regional tenement holdings in the Yanrey Project.

Cauldron had on 20 February received preliminary testwork results of over 96% uranium extraction using acid and carbonate/bicarbonate leaching methods on samples from Bennet Well.

In addition, XRF results show an increase in core assay grade of about 6% from the original ICP assay results while deconvolved gamma probe grade and assay grade differences have increased from 20% to approximately 25% with the latest XRF results suggesting an increase in the gamma results used to calculate the existing JORC resource.

These results have now shifted the Yanrey Project from resource exploration onto a project development timeline towards evaluation, approvals and potential production.

Tony Sage's Cape Lambert holds a 23.11% interest in Cauldron.

Loan Agreement

Under the Converting Loan Agreement, Cauldron will receive the loan funds by no later than 31 March 2014. This will automatically convert into ordinary shares in the company on shareholder approval.

The conversion will be 80% of the volume weighted average closing price of the shares as quoted on ASX over the last 10 trading days immediately preceding the day of receipt of the shareholder approval.

Bennet Well

In late January 2014, comparisons of assay results from Bennett Well saw a 68.3% increase in uranium grade width in the main mineralised zone from the gamma probe data.

An upgraded Resource estimate is likely to be received in the second quarter 2014 from the current JORC Inferred and Indicated Resource of 15.7 million pounds of eU308 at 270ppm.

Bennet Well is part of the 1,930 square kilometre Yanrey Project located about 85 kilometres south of Onslow that is adjacent to Paladin Resources' (ASX: PDN) Manyingee deposit that has an Indicated Resource of 17.8 million pounds of U308.

Like Manyingee, Bennet Well is expected to be amenable to ISR mining.

Studies indicate that average grades of above 250ppm eU308 over 1 metre are potentially economic for an ISR mining operation.

Exploration has identified 11 major palaeochannels, most with evidence of uranium mineralisation. Yanrey has an Exploration Target of between 30 million and 115 million pounds of U308 at grades of 250ppm to 900ppm.

There is potential for regional annual production of 5 million pounds uranium using ISR at low costs, high margins and low environmental impact.

Access is granted via the Great Northern highway and along the Twitchen road to Onslow.


With $1 million in funding from Cape Lambert Resources, Cauldron Energy can now push ahead with further project development for its Yanrey Project including evaluation, approvals and potential production.

The high uranium recoveries and use of in-situ recovery (NYSEMKT:ISR) production method is a significant differentiator for Bennet Wells and Cauldron, providing a low cost production option that could produce a uranium oxide that would be economic at even the current low commodity prices.

Cauldron also looks likely to upgrade the current Inferred and Indicated Resource of 15.7 million pounds of eU308 at 270ppm.

There are catalysts ahead to lift the Cauldron Energy share price and current valuation with the funding in hand.

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