The Yuty PropertyThe Yuty property is a large property covering approximately 250,000 hectares in south-central Paraguay that was the focus of extensive uranium exploration between 1976 and 1983. This activity was centered on a large belt of Permo-Carboniferous age continental sandstones that represent the western flank of the Parana Basin. In neighboring Brazil these same sandstones contain numerous uranium occurrences including the Figueira Mine that reportedly hosted approximately 19 million pounds of U3O8. Most of the uranium occurrences in this environment are "roll-front" type deposits similar to those being currently exploited by low-cost in-situ leach methods in the western United States, Central Asia and Australia. Exploration activity on the Yuty property ceased in 1983 due to low uranium prices.
Transandes has accumulated an extensive database on the project, including logs for approximately 350 core and rotary drill holes (approximately 75,000 m). Almost half of these holes (162) encountered anomalous, or better, radioactivity.
Between 1976 and 1983 the Anschutz Corporation (a private, Denver-based oil company) with joint venture partners Korea Electric Power and Taiwan Power Company spent approximately US$30 million evaluating an area covering over 2.5 million hectares of prospective ground in which the Permo-Carboniferous age continental sandstones subcrop in south-eastern Paraguay and on follow-up work on primary target areas.
This work consisted of airborne radiometric and magnetic surveys, detailed geological mapping, ground geophysical and geochemical surveys which narrowed down the areas of interest. This was followed with regional scale diamond drilling with initial drilling at 15 kilometer spacings drilled across inferred host trends. This work identified several primary target areas, including the San Antonio, San Miguel, Typychaty and Yarati-i areas near and around the village of Yuty. Follow-up drilling at the San Antonio area with 266 drill holes encountered significant mineralization in 103 holes (greater than or equal to 0.03% eU3O8 over 0.60 m). Twenty-four of these holes had grades in excess of 0.10% eU3O8. The term "eU3O8" refers to equivalent uranium, estimated by down-hole logging with a gamma-ray tool. It is believed that Anschutz, the operator from 1976 to 1983, used North American industry standards to log the holes.>>By 1982 the mineralized roll front system at San Antonio had been identified over a strike length of approximately 7 kilometers, with widths of 10-60 m. At that time Anschutz speculated that approximately 2 million pounds of U3O8 per kilometer of strike length may be present at San Antonio, for a total of 14 million pounds U3O8 in the area. This data is not NI 43-101 compliant and is not to be treated as a resource estimate, but rather an estimate of the geological potential of the area.
The depth of the known roll-front type uranium mineralization on the Yuty property intersected by the past drilling is at depths between 60 - 140 meters and the characteristics of the host formations suggest that low cost in-situ leaching recovery could work well in this environment.
The other primary targets areas identified by Anschutz remain to be tested with follow-up exploration. In addition, substantial portions of the project lands have received only very limited attention in the past, and are considered to have good potential to host uranium mineralization.
A Technical Report dated October 16, 2006 on the property has been prepared by Scott Wilson RPA, and will been filed on SEDAR concurrently with the issuance of this News Release.
Under the terms of the Agreement, Cue can acquire a 70% interest in Transandes by fulfilling a Minimum Funding Commitment of US$8,000,000 for exploration expenditures on the Yuty property and by making aggregate cash payments of US$305,000 (of which US$20,000 has been paid as a non refundable deposit) and by issuing an aggregate of 4,000,000 common shares of Cue to Sebastian Reidl and Alex Hirtz each participating equally. US$3,000,000 of the Funding Commitment will be advanced within 18 months of the Effective Date of the Agreement and the balance of $5,000,000 of the Funding Commitment for cumulative Exploration Expenditures of $8,000,000 is to be advanced on or before 3 years from the Effective Date of the Agreement.
Cue is then required to deliver a Pre-Feasibility Report with respect to the lands covered by the Concessions within 90 days after completing its Minimum Funding Commitment.>>The 4,000,000 shares to be issued under the Agreement will be issued in 4 equal installments the first installment being due for issuance on the Effective Date of the Agreement. The balance of the installments are due and payable annually thereafter on the anniversary of the Effective Date.
Transandes will be the operator of the joint-venture programs and a management committee comprised of representatives of Transandes and Cue will implement the exploration programs on behalf of participants in the venture. Cue will have a casting vote on the management committee after the first US$3,000,000 of the Funding Commitment has been spent on the property.
The Agreement between Cue, Transandes, Sebastian Reidl and Alex Hirtz remains subject to Exchange approval. There will be a finder's fee payable to an arms-length person on completion of this transaction subject to regulatory approval.>>CUE PLANNED WORK PROGRAM:
Cue's initial goals will be to compile all previous data with a view to locating old drill holes on the ground and then commencing a drilling program as soon as possible in close proximity to the areas where anomalous or significant grade uranium mineralization occurred in previous drilling. As exploration for this type of uranium occurrence requires a great deal of drilling it is anticipated that approximately 23,000 meters of drilling will be completed within the first year.