How to Evaluate an ISL Uranium Company
Over the past two years, the common myth circulated among investors has been “pounds in the ground.” How many pounds of U3O8 does a company have in the ground? The more pounds a company claims, and more importantly gets institutions and investors to believe, the higher its market capitalization has run. Bigger is always better in most cases, but recovering uranium through an ISL operation, like any other mining operation, has its quirks. During the early stage of this uranium bull market, pounds-in-the-ground was an important yardstick. But just as one can have a million-ounce gold deposit, with a complexity of metallurgical problems that prohibit a robust economic recovery or offer a paltry grade of gold in the ore, investors may discover the same problems in properly evaluating a company’s uranium claims. Instead of asking a company’s investor relations department how many pounds of uranium they have in the ground, find out how much uranium pounds they can actually recover and produce, and how much it will cost them to mine their property.
Ask instead these questions: · How permeable are the ore bodies you plan to mine? · What is your average grade? · Over what area does your rollfront extend? · What is the depth of your ore body? By the time you have finished reading this feature, you should have a better grasp on the economics of ISL mining. You should be better equipped to make a more intelligent decision about your favorite company. First, let’s examine the nature of a uranium mineralized rollfront. Understanding the rollfront will give you the key tools required to accurately evaluate the prospects of any ISL uranium development company. THE “ROLL FRONT” IS YOUR FRIEND In the first article, we interviewed Charles Don Show, who helped pioneer ISL uranium mining as an economic means to extract lower grade ore from underground mining operations.
In Snow’s 1978 article entitled, “Gas Hills Uranium District, Wyoming – A Review of History and Production,” published in the Wyoming Geological Association Guidebook, he wrote about the development of the “roll front” theory. He wrote about discussions the project geologists were having in the summer of 1955 about Utah Construction Company’s recently acquired option on the Lucky Mc uranium properties in Wyoming’s Gas Hill District: “Offset drilling Project 4 intersected one major mineralized zone with a grade thickness product over 10 percent U3O8. An offset of this and one other mineralized hole about 2500 feet away were barren. Many discussions of why the ore was in these ‘isolated’ pods were carried on late into the night… It was during the period of development of the reserves that members of the staff started referring to different layers and separated pods as areas of mineralization where chemical changes had caused deposition and soon the word ‘chemical front’ was in common usage.” Three years later, Paul A. Riddell prepared a report to document the ore occurrences at the Lucky Mc mine. He was among the first to use terminology that has since become an integral part of the “Roll Front” concept. In his project report, Riddell wrote: “In conclusion, the uranium appears to be restricted to more porous beds, but is not evenly distributed within these beds. The boundaries between ore and lean material are erratic – sometimes sharp and sometimes gradational. They do not appear to be related to changes in sedimentation within the beds.
Others have suggested that the boundaries represent ‘chemical fronts,’ and this theory appears reasonable in light of present information.” Originally called chemical fronts, these “pods” contained various grades of uranium. Each pod or roll front is comprised of different mineralization. Understanding that mineralization and how to extract the uranium alone determines how viable a deposit might be. If you imagine roll fronts in a uranium area as if they were lily pods in a pond, you are off to a good start. When a company announces it has uranium mineralization on its property, this could mean it has many pods, or fronts. Ideally, you hope to have multiple “fronts” available on your ground. “Typically, the meat of the front (multiple percent of uranium) is only a few feet to ten feet wide at the most,” Strathmore Minerals president David Miller explained. “This is the part that your ISL wells have to address correctly. If you look at all the mineralization in a single front system, above 0.
03 percent, then from the tails to the front could be 100 feet or more. If you look at the multiple fronts in stacked sands, and you look at one end of the system to the other, the width can be several miles. The length of any of these can be tens of miles, but the good stuff comes and goes.” Miller compared these multiple fronts to “pearls on a string.” There may be one, two or three roll fronts in one well field. “There may be more than three roll fronts,” Miller added. “There may be that many or more even in one pattern.” Again, they are pods and they may be stacked in layers, like lasagna. “The number of roll fronts in a pattern does not really matter, except for operational reasons,” Miller explained. “It is more complex to properly address multiple roll fronts than a single roll front, and you may not be able to optimize recovery of all of them.
” PERMEABLITY IS THE KEY Getting down to the business of ISL mining a roll front requires that we understand the role permeability plays in this mining method. Permeability is the flow rate of the liquids through the porous sandstone. Knowing what the permeability of the orebody will let you know how much water you can get through the sandstone formation. According to Uranerz Energy Chief Executive Glenn Catchpole, who is also a hydrologist, the typical porosity of sandstone is 10 to 20 percent. Porosity is the void space between the sandstone grains. By comparison, clay has a porosity of between 45 and 55 percent. Catchpole said, “A property’s formation has to have sufficient permeability to make the project economic.” In order to dissolve the uranium into solution, you have to know the “pore volumes.” That’s the measure of the pore space in the rock.
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