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Mkuju River

The Mkuju River Project (‘MRP’) is located in southern Tanzania, some 470km southwest of Dar es Salaam. It comprises twenty contiguous tenements (granted licences, renewals and applications) covering an area of approximately 3,250km2. The area was identified as prospective for uranium during reconnaissance exploration undertaken between 1978 and 1982 by Uranerzbergbau GmbH ('UEB').

The MRP lies within the Karoo Supergroup sediments of Permian to Jurassic age (Figure 1). The host stratigraphy is a series of sub-horizontal, very coarse, feldspathic, arkosic sandstones with minor inter-bedded claystones and siltstones. The sediments are interpreted to have been deposited within a braided fluviatile system.

Figure 1: Mkuju River Project - Tenements and Geology

Drilling undertaken by Mantra has confirmed the presence of multiple stacked mineralised horizons of variable thickness at shallow depths. Higher grade mineralisation is also observed at surface in outcrop and trenches.

Mineral Resources

In November 2010 Mantra announced an updated Mineral Resource Estimate (‘MRE’) of 108.9 million tonnes averaging 422 ppm U3O8 for a contained 101.4 million pounds of U3O8 at a lower cut-off grade of 200 ppm U3O8. The updated MRE comprises Measured and Indicated Resources of 67.7 million tonnes averaging 439 ppm for 65.5 million pounds of U3O8, plus 41.2 million tonnes averaging 395 ppm for 35.9 million pounds of U3O8 classified into the Inferred Resource Caetgory.

The updated MRE includes the results from the 2010 infill and extension drilling program and is based on new data from a total of approximately 1,740 aircore/open-hole drill holes for 107,500 metres and 71 diamond drill holes for 4,660 metres.

Mkuju River Project - Nyota Prospect

Mineral Resource Estimate as at 15 November2010

 

Tonnage
(million tonnes)

Grade
(U3O8 ppm)

Contained U3O8
(million pounds)

Measured Resource

40.9

442

39.9

Indicated Resource

26.8

433

25.6

Inferrred Resource

41.2

395

35.9

Notes: The MRE was prepared by independent consultants CSA Global Pty Ltd (‘CSA’) and is reported in accordance with the JORC Code (2004) and NI 43-101.
The resource is estimated at a lower cut-off grade of 200 ppm U3O8.
All figures are rounded to reflect appropriate levels of confidence.

Highlights of the updated MRE include:

  • The MRE has increased by 20% from the previous statement (84.3Mlbs);
  • Total Measured and Indicated Resources increased to 65.5 Mlbs or 65% of the MRE;
  • A 200 ppm U3O8 lower cut-off grade has been maintained and the average grade of the Measured and Indicated Resources is 439 ppm U3O8;
  • The majority of the MRE is within 60 metres of the surface; 
  • Aggressive and successful exploration drilling has lead to rapid growth in the MRE and the potential exists to continue to increase the resource base with ongoing work;
  • Upgraded MRE to be fully integrated into the Phase 1 DFS;

For an animated fly through of the Nyota Prospect please click here.

Phase 1 Pre-Feasibility Study

The Pre-Feasibility Study ('PFS'), completed in late February 2010 and managed by the highly respected firm MDM Engineering ('MDM') of South Africa, has confirmed the technical and economic viability of the Project and its capacity to operate with strong cash margins.

Using the current MRE, Nyota can support an average annual production of 3.7 million pounds U3O8 over a minimum twelve year mine life. This represents a 48% increase in annual production over the results of the Scoping Study reported in June 2009 and there is strong potential to increase this further with ongoing exploration work.

The PFS is based on a contractor mining scenario and the processing plant is based on simple acid leach and resin-in-pulp technology. The operating cost averages US$25.05 per pound over the life of mine, a decrease of 5% from the Scoping Study results.

The capital costs (determined to a nominal accuracy of +/- 20%) for the Project are estimated at US$298 million; US$140 million for the process plant and US$158 million for project infrastructure. Any future increase in production rates will require minimal infrastructural capital as this is essentially sunk in this first phase of the Project.

The Project has the capacity to generate pre-tax cash margins of approximately US$115 million per annum at an average uranium price of US$60 per pound over the life of mine.

To view the Pre-Feasibility Study News Release dated 1 March 2010 please click here.

Phase 1 Definitive Feasibility Study

The Company commenced the Phase 1 DFS in early March and appointed DRA Mineral Projects (‘DRA’) as the Engineering, Procurement, Construction and Management (‘EPCM’) Contractors. During the quarter, a number of key deliverables have been completed from the DFS Project schedule including:

  • The completion of the infill drilling program for the DFS to upgrade the resource classification of portions of the current MRE to the Indicated and Measured categories;
  • The completion of the integrated pilot plant campaign testwork at ANSTO in Sydney; 
  • The design and costing of the labour complement across the entire operation; 
  • A completed mining fleet design and all associated maintenance infrastructure required to support such a fleet. Included in this mining exercise was the costing and trade-off between owner operator and contract mining; 
  • The submission of enquiries to suppliers for the detailed capital component of the DFS; 
  • The commencement of the road construction as part of the early works program; and 
  • Undertaking an evaluation of the various alternatives for funding the development of the Project and the sale of future uranium production (including uranium marketing and off-take arrangements).

Pilot Metallurgical Testwork Program

The integrated pilot plant was operated for a period of 28 continuous days in March and 22 days in May utilising feed material representative of the first seven years of production. All parameters from the Phase 1 PFS were used as a base case operating scenario.

After the March campaign the performance of the plant was evaluated and key optimisation objectives were set for the May campaign. All the key objectives were met which included:

  • A reduction in acid consumption from 12 kg/t down to 6 to 10 kg/t; 
  • The effective use of in-country sourced limestone for neutralisation; 
  • The elution circuit was able to perform at ambient temperature; and 
  • The use of a larger resin dead.

After a series of reviews of the ANSTO metallurgical reports further optimisation of the process flow-sheet was designed into the final DFS Process flowsheet for costing. The final outcome is a highly simplified, single stream metallurgical flowsheet that maximises uranium recovery. This modified flowsheet has increased overall uranium recovery to 82% from the PFS figure of 79%. The modified flowsheet has been designed to process five million tonne per annum. Prior to the leach circuit, all material greater than 1.2mm will be wet screened and rejected. After leaching, classification will take place at a size of 120 micron. The -120 micron material will go to the RIP circuit and the +120 micron material will be filtered, washed to recover dissolved uranium, and then discarded. This process significantly enhances uranium recovery compared to the PFS as it reduces the amount of uranium being discarded to waste.

The reduction in the size of the material going to the RIP circuit, from the PFS level of -250 micron to -120 micron, improves the movement of slurry through the RIP circuit and the separation of resin from the slurry prior to elution. This facilitates the use of smaller resin beads, thereby reducing the consumption of resin in the circuit.

As part of the continued improvement and optimisation process of the metallurgical flowsheet a RIP test rig was built and in current operation at Mintek to evaluate the screen flux requirements of the RIP circuit. A 20 tonne sample was shipped down to Johannesburg for testing. The campaign is in its final stages of the program and has demonstrated significant improvements in design parameters when compared to the DFS design. These improvements will be incorporated into the detailed design of the RIP circuit.

Phase 2 Heap Leach Preliminary Feasibility Study

A PFS on heap leaching lower grade mined ore for the Project’s second phase of growth was initiated as a result of positive results from a heap leach testwork campaign conducted at the ANSTO and SGS facilities in Australia. This Phase 2 growth would be envisaged to commence after the Phase 1 RIP circuit has reached steady state operations.

Phase 1 of the Project is targeting approximately 3.7 million pounds of uranium a year using the RIP metallurgical process. It is envisaged that Phase 2, the heap leaching of lower grade mined ore, would commence after the RIP circuit has reached steady state operations and provide the Project with an incremental increase in production over and above the targeted annual production rate of Phase 1.

The initial testwork clearly demonstrated that the lower grade ore is particularly amenable to heap leaching. The results of column testwork, which simulates a heap leaching process, were very encouraging, indicating a uranium recovery rate of approximating 80% in eight days with a low acid consumption of approximately 8 kilograms per tonne. No other reagents were required to achieve final recoveries.

The Heap Leach PFS is due to be completed during the first quarter 2011 and will include further resource modelling and detailed leaching testwork to allow grade/recovery relationships to be investigated, the minimum cut-off grade for economic treatment of the Nyota orebody to be determined and additional data for engineering, design and costing to be generated. Upon successful completion of the Heap Leach PFS, it is planned to progress to a DFS, which will include integrated metallurgical testwork and an updated Environmental Impact Statement.     

Permitting Update

 The Company currently holds a Prospecting Licence covering an area of approximately 200km2, which includes Nyota.

The Company has been advised that all of the processes required by Tanzanian legislation for the issue of the Environmental Impact Assessment (‘EIA’) Certificate for the MRP are well advanced.

The Ministry of Energy and Minerals has also advised that all necessary processes with respect to the Special Mining Licence (‘SML’) are also complete and that the Government will issue the SML following the ratification and issuance of the EIA certificate.

The same Ministry has also advised that the publication of the Uranium Mining Regulations is imminent and that these have been included in the proposed new mining regulations to be published and ready for use on 1 November 2010.

Extensive discussions have taken place between the Ministry of Energy and Minerals and Mantra regarding the Mine Development Agreement (‘MDA’). These discussions are nearing finalization

Nyota Resources Infill and Exploration Drilling

With the 2010 resource infill dand extension drilling program recently completed, the focus has now shifted to the exploration drilling program which will run through until December 2010. In total, the resource infill drilling program comprised approximately 1,650 aircore/open-hole drill holes for 98,000m and 67 diamond drill holes for 4,400m.

The exploration drilling, which commenced in September, will continue the evaluation of a number of priority target areas proximal to the known areas of mineralisation at Nyota. These target areas are highlighted in Figure 3. This program will continue until mid-December 2010 and comprise approximately 50,000m of aircore/open-hole and 1,000m of diamond drilling

Mantra has recently published an updated MRE incorporating the resource infill and extension drilling program results. This updated resource estimate will be included in the Phase 1 DFS, which is expected to be completed by the end of 2010. In addition, a further revised MRE is expected to be completed in the first quarter of 2011 which will incorporate the current exploration drilling program results.


Figure 3: Nyota Prospect - Exploration Targets

Satellite Targets - Reconnaissance Program

 A high resolution helicopter-borne radiometric survey completed over the entire Mkuju River Project area in mid 2007 resulted in the identification of 33 uranium anomalies requiring field evaluation (Figure 4). A helicopter supported exploration program designed to test the potential of six Satellite Targets to the east and south-east of Nyota (within a ~20km radius) was undertaken during the September quarter. Geological mapping, ground radiometrics and trenching was completed on the six Satellite Targets. Although preliminary in nature, the field observations were positive with visible uranium mineralisation being recorded in trenches at a number of the targets. The trench samples have been dispatched from site and assay results are pending.

The mapping identified sub-horizontal beds of medium to coarse grained sandstones, interbedded, multiple layers of claystone and a distinctive stratigraphic marker horizon consisting of petrified wood fragments and tree trunks. The mapping confirmed the radiometric anomalism to be associated with two linear structural corridors and associated, second order north-west orientated jointing and faulting. Secondary uranium mineralisation is associated with the claystone and wood bearing gritstone horizons, with enrichment along the preferred structural zones. Shallow, high grade uranium mineralisation is evident marginal to preferred structures. Disequilibrium between high radiometric values but low uranium assay results are evident in marginal zones where high radiometric values 200 - 17,000 counts per second, return uranium assays below 90 ppm U3O8. The location of the potential ‘remobilised’ uranium and testing of high grade zones will be the focus of future drilling.

Maximum assay grades in selective rock-chip grab samples ranged up to 15,380 ppm, 12,320 ppm, 3,510 ppm, 740 ppm, 650 ppm and 440 ppm U3O8 for six of the Satellite Targets examined in this program. Best results from the auger drilling and trenching are shown on Figure 4.

Figure 4: MRP Satellite Targets - Auger and Trenching Results (Auger results highlighted in red, trench results in blue and maximum rock chip values shown as white stars)

The SWC Prospect is a 4km long trend containing a number of prominent airborne radiometric anomalies, the largest of which is over 1.6km long and up to 800m wide, located in the south west corner of the MRP (Figure 4).

For further information, please see the latest Company Report.

 

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