wireframe22 wrote: So I have been trying to come to terms with the fact that no matter what, people on the boards keep degenerating into squabbling and bickering over the deposit that they chose to invest in or feel is the “best”. Each respective deposit has their own self-appointed “guru” or “front man” on the boards who will trundle out some figures and calculations and point to what other analysts have evaluated vs some other deposit which invariably cause a provocation from the other camp. At this point out comes the calvary from the offended camp to take pot shots and shoot zingers across each other bows until it all peters out; at which point another post will be released and the cycle will repeat itself. (How does that definition of insanity go….)
Stop, just stop for a second and zoom out. What do you see? I have now been here investing in the Patterson Lake Corridor long enough to see 2 deposits (RRR and Arrow) proved up to the point of economic viability (Arrow is pending, but I firmly believe it will show economical results), we have several more in the hopper getting some drilling attention or are in line to be developed further (Bow, Cannon, Harpoon, Spitfire) and we also have a regional deposit (Shea Creek) within the vicinity that will be considered as part of the fold for what will be one of the greatest mining districts in Canada’s history. All this and it’s just getting started! The southwest of the Athabasca Basin is an underexplored region and with the kickoff of the future mining operations, more attention and exploration will be taking place as the region is further de-risked with the addition of a mill, tailings facilities, contractors and labour availability and local community development and support.
The last time Canada became excited about a mining district (other than Oil sands) was the “Ring of Fire” Ferro-alloy deposit discovered in northern Ontario. It’s a massive Chromite deposit.
What Ontario needs to unlock Ring of Fire’s mineral wealth is a Marshall Plan The thing is, Chromite demand and supply are fairly well balanced, South Africa currently dominates this market and has vast deposits that have production ramp up capability, with minimal investment. Reading over this financial post article; you can quickly surmise why this deposit development has fizzled.
Compare this deposits scenario with what’s shaping up for us at the PLC when you consider some of the macro events that are taking place domestically and globally. With Canada’s recent Federal posturing and efforts directly out of Alberta to pivot away from Oil and energy development coupled with the Paris Accords on Climate Change with near global sign on. Nuclear energy is poised for a renaissance in a huge way. Those of us who have been following this sector know the build out of nuclear capacity that is going on in Asia, India, Midde East and all the rest across the globe. Add in the pending nuclear restarts in Japan and to a lesser degree France, and you have one of the most bullish cases for uranium in history in the making. Looking at all of the current producers who are either cutting production, shuttering operations or cancelling project expansions and you have more fuel to the fire when production will not be able to available to meet demand immediately.
This brings me back to the PLC. With the pending RE updates from Fission and Nexgen, we are looking at >500M lbs drilled to date. Both of these deposits are still growing, and to add to that we have additional discoveries in the vicinity that will be drilled eventually as well. Toss in Shea Creek with its 90M lbs and you have the fixings for a new Uranium district that I believe will eventually grow to larger than 1B lbs. This is a significant find, nowhere else in the world has deposits this rich in a secure jurisdiction with a rich history and experience with Uranium Mining.
These deposits on their own show great economic viability, but what has me excited is the idea of all of the deposits coming under the directorship and development of one unified operations. Be it Cameco/Areva, Rio Tinto, BHP Billiton, Teck, or even an energy major like Shell or Exxon (It sounds wild but think about it for a bit and look at how these energy companies are pivoting from Oil, I mean Shell is now a Natural Gas company, it used to be oil and it was coal before that) or some sort of JV (most likely with some additional Chinese backing) You have to imagine what the future could hold for a potential operator of the corridor and its hosted deposits.
Here is some of the reasons why I believe it makes more sense to unify all of the holdings along the corridor instead of operating any one deposit on its own. You will need a variety of things to get an operation going, chief among them are access to the deposit, the Mill and the Tailings Facility.
Fissions Triple R and 840W & 600W Zones
Pros
- Located next to a highway is ideal for a Mill and logistics location.
- 840W & 600W Zone is shaping up to be an excellent location to quickly mine and stock pile to create a future tailings facility. Below ground tailings facility poses no breach failure risks like those of Mount Polley or Samarco
- Open pit mining operation is cheap
- Basement hosted
Cons
- Major Hydrogeological challenges in regards to the majority of the RRR deposit located under the lake. Expensive Engineering requirements.
- Post open pit operations has lower grades of potential mineable deposit available which will face sterilization and lower economic returns in a lower Uranium price environment.
Nexgen Arrow Deposit
Pros
- Massive deposit, large high grade core with additional low grade lenses available
- MASSIVE DEPOSIT!!!
- Basement hosted and amenable to conventional underground mining extraction techniques
Cons
- Depth of deposit will necessitate a Shaft being sunk. The upper 150m of the shaft will have to be cased to prevent Hydrogeological issues. (Shafts are expensive and slow to develop, casing shafts are more expensive)
- No ideal location to site the tailings facility. Will require construction material to be brought in if none are available on the property. Must create an impermeable barrier between the Athabasca sandstone and deposition of the fluid tailings. Will also be constructed as an above ground dam which faces risks to be breached like the Mount Polley or Samarco dam. Not many people have talked about this to date. All current operating milling and tailings facilities in the Athabasca basin utilize former open pits for a reason (cheaper to set up and mitigate hydrogeological issues and safe from above ground dam failure risks)
So there you have it. Both operations on their own have 3 major costs to face (Access to deposit, Mill and Tailings facility). This is why I believe strongly that one operator will come to direct the development of the corridor and will reap the economic benefits of planning for all of the deposits as one.
A planning sequence I see that holds potential would go like this:
- Start the Mill construction at FCU adjacent to the 840W & 600W zones, while simultaneously mining and stockpiling the 840W & 600W deposit to develop the regions Tailings facility.
- Start sinking the first shaft with the target depth of ~600m at the Arrow deposit to facilitate access to the high grade core of the A2 Shear. Mine the A2 Shear and Blend with the 840W & 600W stockpiled material
- Start the development of the dyke and open pit operations at the RRR deposit. Mine accordingly
- Sink an additional shaft at Arrow to 900m and install additional winze’s to facilitate movement of the larger tonnage of the lower grade lenses of ore bodies to be developed
This plan only takes into account the RRR, 840W & 600W zones and Arrow. With the recent developments around Harpoon/Spitfire, Bow and Cannon. Additional mining sequencing would have to be planned accordingly. Material from Shea Creek would also be available for processing at some point. Key to the economics will be the “Right Sizing” and “Fit for Purpose” design of the Mill. It will need to be able to process an ideal amount of tonnage per annum and be able to handle a blend that will allow for the high and low grade deposits to be mined.
I have not had a chance to think of a catchy name like “Ring of Fire” yet, but rest assured; something will get picked up. When the Provincial and Federal Governments recognize the potential Tax and Royalties of the PLC (especially as we starting inching even closer to the billion lbs mark) with long term Uranium prices forecasted to float between 65 – 85 $/lb for a commodity that actually has a future demand profile that will have difficulties being achieved, we are all going to feel like clever geniuses for being here first and banging the table accordingly.
I hope this write up gets some creative thoughts rolling. I would enjoy to hear some potential catch phrase names if anybody has some to date. I think it would be good to hear some alternative mine sequencing and phasing ideas too.