Zarechnoye Mine
The Zarechnoye Uranium Mine (Zarechnoye) is an operating in situ recovery mine located in Kazakhstan, in the southern part of the Syrdaryinskaya Basin in the South Kazakhstan Oblast, approximately 200 km west of Shymkent and 450 km southeast of Kyzyl-Orda.
Zarechnoye is a joint venture in which Uranium One has a 49.67% interest, acquired in December 2010. The remaining ownership interests are a 49.67% stake owned by Kazatomprom, the Kazakh State uranium company, and a 0.66% stake owned by the OJSC Karabaltinsky Mining Complex.
The design capacity of Zarechnoye's processing facilities is approximately 2.5 million pounds (970 tons U) per year and it is expected that the annualized rate of production will reach this level in 2012.
An area of Zarechnoye known as Zarechnoye South has not yet been developed and is expected to become operational beginning in 2014. Steady state production capacity at Zarechnoye South is expected to be 1.6 million pounds per year, bringing Zarechnoye's combined production capacity to approximately 4 million pounds per year.
Mineral Reserves and Resources
Table 1 - Zarechnoye Mineral Reserve Estimate
April 30, 2010
| Deposit Totals | Company Share | |||||
| Resource Category | Tonnes (000's) | Grade (% U) |
Contained U (tonnes) |
Contained U3O8 (million lbs) |
Ownership (%) |
Contained U3O8 (million lbs) |
| Probable Reserves | 19,250 | 0.055 | 10,094 | 26.2 | 49.67 | 13.0 |
Notes:
- Mineral resources are inclusive of mineral reserves.
- Mineral reserves estimated using 80% extraction of mineral resources.
- Mineral reserves are based on 0.04m% (grade x thickness) cut-off per hole and 0.01m% per resource block.
- Based on U3O8 prices of US$50.00 per pound.
- Mineral reserves are based on CIM definitions.
Mineral reserves account for depletion due to pilot leach test and production to date.As at April 30, 2010 Zarechnoye had the following mineral resource estimate as provided by Scott Wilson Roscoe Postle Associates Inc. ("SWRPA"):
Table 2 - Zarechnoye Mineral Resource Estimate
April 30, 2010
|
|
Deposit Totals |
Company Share |
||||
|
Resource Category |
Tonnes |
Grade |
Contained U |
Contained U3O8 |
Ownership |
Contained U3O8 |
|
Indicated Resources |
19,200 |
0.06 |
12,618 |
32.9 |
49.67 |
16.4 |
|
Inferred Resources |
7,700 |
0.05 |
3,934 |
10.2 |
49.67 |
5.1 |
Notes:
- Mineral resources are inclusive of mineral reserves.
- Mineral resources based on minimum total grade x thickness (GT) per hole used within the outline of the mineralized body or block is 0.08m%.
- Mineral resources cut-off grade used for establishing mineralization widths is 0.01% U.
- Mineral resources that are not mineral reserves do not have demonstrated economic viability.
- Mineral resources are based on CIM definitions.
- Mineral resources were reviewed by Scott Wilson RPA and re-classified as per the CIM definitions.
In Scott Wilson RPA's opinion, there is significant potential to increase the 43-101 mineral resource base, particularly at Zarechnoye South, based on P1 resources as follows:
- Exploration drilling indicates potential additional mineralization of 40 to 60 million tonnes at 0.06% U containing 24,000 to 36,000 t U (60 to 90 million pounds U3O8).
- P1 mineralization potential quantity is based on the Volkovgeologia P1 mineral resource estimate.
Geology and Mineralization
The Zarechnoye deposit belongs to the group of Karaktauskovo deposits within the Syrdaryinkaya Uranium Province, within the Syrdaryinskaya Basin, a major regional structure and one of the elements of the Karatau Artesian Basin.
The uranium mineralization at Zarechnoye is hosted in the Upper Cretaceous horizons, namely the poorly consolidated sands of Upper Santonian to Maastrichtian in age.
Uranium mineralization occurs in at least nineteen horizons. Nine of these horizons have been explored by drilling with reported mineral resources and reserves. Four of these nine horizons constitute approximately 91% of the total reported resources. These four main zones are summarized as follows:
- Upper Maastrchtian Zone within a depth range from 360 m to 590 m;
- Upper Campanian Zone within a depth range from 490 m to 550 m;
- Lower Campanian Zone within a depth range from 630 m to 740 m;
- Upper Santonian Zone within a depth range from 540 m to 650 m.
Operations
Zarechnoye is an operating ISL mine which produces a wet yellowcake uranium product. Operations at the Zarechnoye processing facility started up 2006 and the plant has been constructed to a production capacity of approximately 2.5 million pounds per year.
