Cauldron Energy (ASX:CXU) has drilled eight diamond core holes to lift the uranium resources and confidence level at its wholly-owned Bennet Well uranium deposit in Western Australia.
With 29% of the resource now in the Indicated category, further upgrading is likely with the upcoming drill program.
The deposit is part of the Yanrey - Bennet Well Project, which has recently been attracting significant funding from China investors.
This included $4 million in July through a placement to Chinese investor Starry World Investment Ltd, which followed on from the $11 million in funding from other Chinese investors that it had closed the month prior.
Previous metallurgical studies completed on core show uranium recoveries of 94%-96%, which places the project squarely on the project development pathway.
Drilling was undertaken for metallurgical testwork increasing the resource by 18% to 18.6 Mlb contained within 32.40Mt eU3O8 using 150ppm eU3O8 cut-off.
Today's resource upgrade will be just the beginning, with the company planning to drill in excess of 100 holes to define in situ leach characteristics at Bennet Well, with the target of leach trials in 2015.
Ravensgate Mining Industry Consultants completed this updated Mineral Resource estimate using a newly generated three dimensional resource block model.
Simon Youds, Head of Operations, commented: "This improvement in the Mineral Resource estimate confirms the potential for the Bennet Well deposit to support a viable mineral extraction operation.
"Following the outstanding resource growth achieved with the information collected from these eight holes, Cauldron is now targeting over 100 holes in its drilling campaign at Bennet Well starting later this month and continuing into the December quarter 2014.
The company is looking to in-fill drill between existing widespread intersections to improve its understanding of this resource as well extend north and south and almost as a byproduct of this, the resource is expected to increase.
The deposit is located close to surface (less than 100 metre downhole depth) in Cretaceous sedimentary units that form part of the Yanrey-Ningaloo Region, at an elevation of around 48 metres above sea level.
New drilling program
The planned drill program is timed to commence late September 2014 which will continue into the December 2014 quarter.
The process incorporates newly interpreted unconsolidated and permeable sand units that became the wireframe basis for producing the grade model.
Highlighting the potential, previous metallurgical studies completed on core show uranium recoveries of 94%-96%, which put this resource on the project development pathway.
Full resource breakdown
The revised Resource estimate is:
- Indicated Resource: 6.21Mlb eU3O8 (9.4Mt) at 300ppm eU3O8 (DisEq); using a 150ppm eU3O8 cutoff.
- Inferred Resource: 12.2Mlb eU3O8 (23.0Mt) at 240ppm eU3O8 (DisEq); using a 150ppm eU3O8 cutoff.
- Total Resource: 18.6Mlb eU3O8 (32.40Mt) at 260ppm eU3O8 (DisEq); using a 150ppm eU3O8 cutoff.
Uranium In-situ Leach study launched
Cauldron has commissioned Worley Parsons (ASX:WPL) to complete a study to define the Uranium In-situ Leach (ISL) approvals pathway in Western Australia and define the timeline through to potential production at Bennet Well.
The company intends to develop this work into a full Scoping Study for ISL Uranium at the Bennet Well project and the broader Yanrey region.
Bennet Well
The Bennet Well deposit is located within the Carnarvon Basin 130 kilometres to the south of Onslow in the north-west region of Western Australia.
The nearest town is Exmouth, about 240 kilometres to the northwest.
The Yanrey - Bennet Well Project can be accessed from Exmouth via the major North West Coastal highway linking Exmouth and Karratha.
Analysis
Today's 18% resource upgrade at the Bennet Well uranium deposit is significant, but is likely to be just the beginning.
Worth noting 29% of the 18.6 Mlb contained within 32.40Mt eU3O8 using 150ppm eU3O8 cut-off is in the Indicated category - with further upgrades likely.
The next major drilling program will include over 100 holes to define in situ leach characteristics, with the company looking to in-fill drill between existing widespread intersections.
This has the potential to not only boost the resources, but the confidence categories as well.
Cauldron Energy has recently been attracting significant funding from China investors.
This included $4 million in July through a placement to Chinese investor Starry World Investment Ltd, which followed on from the $11 million in funding from other Chinese investors that it had closed the month prior.
The uranium price is now at US$34 per pound, up from well under $30 a month ago; continued gains would auger well for project economics.
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