Cauldron Energy (ASX:CXU) has secured a victory with Western Australia Minister for Mines and Petroleum Bill Marmion allowing its applications for three uranium exploration licences in the Pilbara region to proceed, overturning the Mining Warden's February 2014 recommendation.
The Minister determined there were sufficient grounds to allow the applications and did not accept the Mining Warden's February 2014 recommendation for refusal.
Cauldron is well funded to undertake the proposed exploration with $3 million in cash at bank and a further $7.47 million in funding due from various investors under placement agreements.
Exploration licence applications 08/2385, 08/2386 and 08/2387 on and adjacent to pastoral leases on the Minderoo pastoral station will extend the Yanrey project.
Executive chairman Tony Sage welcomed the Minister's decision, saying it shows support for greenfields exploration in Western Australia.
"This decision is not only great news for Cauldron's investors but also for all those junior explorers who are struggling in the current environment," he added.
"It is a win for our industry since the implications of the Warden's decision, had it been upheld, would have thrown junior explorers in WA into disarray.
"This has been a long-running and costly legal dispute which has cost the company much-needed finance on litigation rather than putting valuable shareholder funds into the ground through exploration.
"Cauldron has always remained confident that it would have the funding in place to undertake future exploration on these licences.
"The company now looks forward to moving the application forward and, in time, commence exploration on these tenements."
The uranium exploration licences are located north of the company's Bennet Well uranium deposit in the Yanrey area.
Bennet Well 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.
Yanrey - Bennet is 130 kilometres south of Onslow within the Carnarvon Basin and can be accessed from Exmouth via the major North West Coastal highway linking Exmouth and Karratha.
Resources currently stand at 18.6 million pounds eU3O8 with 29% in the Indicated category.
In December, the company's drilling delineated a zone of high grade uranium mineralisation peaking 2,500ppm eU3O8 at the Bennet Well East area.
The greater than 500ppm eU3O8 contour covers an area 500 metres by 175 metres.
This has prompted the company to mobilise a core rig to better categorise the layers, allowing it to plan the field leach trial for next year.
Cauldron will investigate the economic potential of this zone of high-grade mineralisation in Bennet Well East.
The Bennet Well Central and South resource areas remain to be drilled in this program.
Allowance of the applications for three uranium exploration licences will extend Cauldron's Yanrey project. Importantly for the sector it provides clarification as to what sufficient cash can refer to.
Now this is behind the company it can get on the ground and commence exploration.
The company has already defined a Resource of 18.6 million pounds eU3O8 at the Bennet Well deposit while drilling has delineated a zone of high grade uranium mineralisation peaking 2,500ppm eU3O8 at the Bennet Well East area.
Cauldron is well funded for further exploration activity with $3 million in cash and a further $7.47 million due from various investors under placement agreements.
This includes work on its Marree base metals project in South Australia and Rio Colorado base metals project in Argentina.
It has completed a technical re-appraisal of Maree by in-house geologists and a geophysical survey to identify drill targets.
Funds have been budgeted for drilling at Ooloo, Mt Freeling and other targets.
In Argentina, the company is expecting a technical report on Rio Colorado from consultant geologists following a site visit last year.
Any of the three projects has the potential to lift the valuation, hosting high grade uranium and base metal mineralisation.
Share price kickers include:
- Further drilling results;
- Results from the in-situ field leach trials; and
- Results from the order of magnitude study.
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