A-Cap Resources (ASX:ACB) should firm in trade after resource drilling intersected higher grade uranium mineralisation within the shallow areas proposed for early mining at its flagship Letlhakane Uranium Deposit in Botswana.
The company is well-funded after recently finalising a $5.8 million capital raising via placement and rights issue at $0.055.
Best intervals from the resource drilling included 9.85 metres at 571 ppm eU3O8, 10.35 metres at 368 ppm eU3O8, 2.25 metres at 1354 ppm eU3O8, and 3.05 metres at 979 ppm eU3O8, at the 200ppm cut off.
ACB completed 617 metres of PQ diamond drilling to collect samples for lithological gamma studies and comminution test work, 3,734 metres reverse circulation drilling to establish mining scale uranium variability, and selected infill drilling to improve information in higher grade areas.
This data will provide valuable information for pit optimisation as part of the feasibility study to enable application for a mining licence early next year.
Optiro will complete the continuity analysis in the coming weeks and incorporate it into the resource model. Lithological and facies changes will also be defined at the mine scale.
Drilling also concentrated on areas that have been identified as higher grade and early in a potential mining plan.
The Diamond core PQ will be utilised for gamma disequilibrium studies and analysis will be conducted to determine if there are any gamma factors for differing lithological types.
Changes in this respect would be related to porosity differences. A-Cap's previous studies have determined that there are no overall disequilibrium issues in the deposit.
A-Cap's Managing Director Paul Thomson commented:
'The excellent results confirm the presence and continuity of higher grade uranium mineralisation within the shallow areas proposed for early mining, and provide further data for mine planning and resource modelling'.
High grade mineralisation within the deposit has been extended by this drilling program and is targeted for early production.
Proceeds from the recent capital raising will be used to prepare the Letlhakane Uranium Project for early production and capitalise on a recovery in the uranium price.
Letlhakane ranks as one of the largest under-developed uranium deposits in the world.
It has a global Resource of 662 million tonnes at 211ppm for a contained 308 million pounds of uranium. This includes a higher grade component of 83.7Mt at 447ppm U3O8 for 82.5 pounds.
The ability to collect gamma data at a small scale and calculate equivalent uranium grades will drive the eventual mining methodology.
Today's drilling results will lead A-Cap to revise the Scoping Study to include the higher grade resource which is expected to impact significantly on operating costs for the project.
Letlhakane is one of few global uranium projects capable of commencing production within the next three years and hosts a resource of 308 million pounds, along with separate strata that contain 107.3 million tonnes of thermal coal.
Key shareholders include Praetorian Resources and China Growth Minerals that account for 30.6% of the register, and are supportive of progressing Letlhakane.
On the macro side, uranium prices are on the rise, having now moved above US$31 per pound, with potential further increases on the horizon as Japan restarts nuclear reactors.
Morgan Stanley has estimated a global uranium shortfall of 4.9 million pounds in 2015.
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