RE:The NXE versus FCU saga ... no contest!NXE vs FCU from a REAL qualified person, not some charlatan by the name of Mesa1.
Per Doug Beattie, the former Chief Engineer of Cameco:
Firstly, a great piece of detective work in finding this mineralized trend south of Cluff Lake. I believe the honours go to Alpha on this one. When I look at the effort Cameco and Areva mounted in trying to find the next big one I can only conclude that they were focusing on the deep hard to find ones and let this one slip under their nose.
Either that or they were drinking a little too much coffee in their posh exploration offices in Saskatoon. Shame on Areva in particular since their geologists likely drove by this one on hundreds of occasions (the same way Noranda’s geologists drove by the Hemlo rusty gossan outcrop on Highway 17 in northern Ontario for thirty years).
As a mining engineer who has had over 15 years of varying degrees of involvement in most deposits up north (McArthur River, Rabbit Lake A and D Zones, Eagle Point, Dawn Lake, Key Lake, Millennium, Roughrider, Cigar Lake etc.) I naturally look at the results coming out of the exploration programs and think of how to mine this stuff.
I have had a look at the core Nexgen has published on their website and it looks competent, somewhat similar to Eagle Point or Zone 2 at McArthur River in the basement rock. The alteration/clay mineralization takes away plenty from its original rock strength but if shotcrete is applied to the tunnel walls soon after blasting and concrete poured on the floor to limit gamma radiation and road bed degradation, the use of conventional mining techniques such as blasthole stoping is possible.
Some of the issues I see going forward for Nexgen are to establish some strike length to the core of the deposit. There are three or four holes that certainly demonstrate good intersections but the stuff on the far fringes is not of much significance from a mining perspective. Get this one out to about 150m of mineable strike length and we have something here. If they can get to 30-40 million pounds in that 150m of strike length we certainly have another Hathor. So I suspect this one is a little under rated right now if they can keep shareholder dilution to an absolute minimum.
The mineralization is deep enough into the basement rock that groundwater will not be a concern (assuming they are properly grouting off their diamond drill holes with cement) so there will be no need for fancy freezing unlike Denison’s Phoenix.
The depth of overburden and likely water bearing sediments above the basement rock means that ramping down to the ore is likely out of the question. This will trigger the need for two shafts to be sunk. Collar ground freezing will be necessary.
The milling strategy here is obviously a key issue. I am not sure what it would take to reactivate the Cluff Lake mill site but I think the proper angle here ultimately is to get the proper native bands on board (La Louche, Pinehouse and perhaps La Ronge) via an equity position/jobs guarantee to allow shipping of ore in covered trucks, perhaps with some prior radiometric upgrading on site, along existing all season roads to the east side mills. It is about 30 cents a kilometer tonne so it should be more economic than building a mill. Build the odd bypass around communities if necessary (like we successfully proposed in 1989 around the aboriginal community of Booroloola in the Northern Territory to ship zinc cons to Bing Bong from the McArthur River Zinc Mine, https://www.mcarthurrivermine.com.au/EN/AboutUs/Pages/Shipping.aspx )
I have worked with these communities in the past and they will come on board after suitable negotiations. The precedent is already out there, shipping from the Arizona Strip to White Mesa in the US, about 400 km I believe and the grade is a magnitude lower.
So conceivably Nexgen could go it alone here with a custom milling agreement. Tie a major up within 2 months would be my recommendation to keep Dev and the pirates away.
So this brings me to Fission. As the early worm they have certainly been getting the attention and they deserve it. The technical document I wrote for the IAEA in 2005 (https://www-pub.iaea.org/MTCD/Publications/PDF/P1288_web.pdf Table 1, page 139) basically summed up the time necessary to get a deposit into production and the quantity of uranium required versus depth to likely demonstrate sound economics. Finding shallow ore up north is virtually unheard of these days.
I saw some preliminary pit designs and a potential underground design for what Fission has so far. It is important to do lateral thinking at this stage since this can guide the exploration effort.
Pit designs obviously imply isolating mining from Paterson Lake. At first I thought this isolation would be pretty straight forward but now I am not so sure. Three deposits have been open pit mined under lakes so far up north. At Key Lake, the lake was bypassed and the lake was drained (well before my time). It was a pretty tiny lake to begin with (but nevertheless folklore has it that the Uranerz boys drained the lake prematurely and then rushed down to the dry lake bottom to catch the fish flopping around in 5 gallon pails! The mine was soon nationalized in a deal the Germans could not refuse, Sicily style.) A series of dewatering wells were required around the pit to draw down the water table to ensure dry mining conditions.
At Rabbit Lake we mined two tiny pits that were adjacent to the shoreline. In this case, no dewatering wells were drilled but steel cofferdams were built similar to the upper photo here.
https://en.wikipedia.org/wiki/Cofferdam
This was hugely expensive but the lateral extent of the ore was minimal and the grade was high. Nevertheless, although the cofferdams worked as planned we did not expect groundwater from the shoreline side to come rushing into the pit. The major problem with groundwater in the pit is that it has to be considered to be contaminated and must be sent to a water treatment plant for radium removal in particular. This could lead the the requirement for a huge treatment plant hence high capital cost. Literally the last bench of the A Zone Pit was mined by backhoe from the upper bench since pit bottom was constantly flooded.
The other key example out there of dam building to allow mining is of course the Diavik diamond mine in Canada’s Northwest Territories. The key issue with simply tossing rocks in a lake to make a dam is the fact that the water will flow under the dam through the sediments and this water will then require treatment since it is now in the pit. Water treatment was the nail in the coffin of Areva’s Midwest Lake pit proposal based upon those I talked to.
So I suspect the dams at Patterson Lake will need to include a frozen core achieved through drilling vertical holes through the core of the dam into the basement rock and using a freeze plant and thermosiphons to create an impermeable core. The rock core is replaced by slurry wall prior to drilling and freezing. Doable but likely $200-$300M required before all is said and done.
The Department of Fisheries and Oceans are also a wonderful bunch to deal with. I think they all graduated from the David Suzuki University of Unrealistic Environmental Expectations. Significant surface disturbance, not only for the pit but also for overburden/waste rock storage is also necessary at Paterson Lake.
The only other concern I have with respect to Fissions discovery from a technical open pit perspective is the fact that Nexgen pretty much controls access to the far shoreline which may be necessary to anchor the dams. Perhaps not. A horseshoe dam anchored on the west shore at Fission may be the more suitable approach.
My comments with respect to milling at Nexgen also apply here. Fortunately, both properties have ore in the basement so arsenic and nickel should not be a milling/environmental issue.
At Eagle Point, when we mined to within 50 metres of the lake bottom (sediment/basement contact) all sorts of interesting things would happen (caving ground, virtual rain storms under Rabbit Lake etc) . So if Fission were to mine this mineralization from underground, it would be necessary, in my opinion, to leave a 50 metre crown pillar of basement rock above the mine workings. This would sterilize a large portion of the mineralization found to date.
So there you have it. I know I have privately communicated that the logical mining approach would be to combine both properties and mine Paterson Lake first followed by Nexgen’s mineralization. But after thinking this one through, IF Nexgen can prove up some mineable strike length and ship to a custom mill they can go it alone with fewer technical and environmental issues than Fission. So in my mind Nexgen is the better buy at this time.
Read more at https://www.stockhouse.com/blogs/commodities-commentary/september-2014/fission-vs-nexgen-let-the-games-begin#hk7tp4IFZOsiVPkQ.99