BLR 0.00% 0.2¢ black range minerals limited

world mining article

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    THERE has been an explosion in the number of junior explorers latching on to the surge in uranium prices. But as with all commodity price-led exploration booms, only a fraction of the juniors will achieve producer status, particularly as the easy equity funding to continue the search dries up. That is a situation that the junior uranium sector now finds itself in because (spot) uranium prices have tumbled from last year’s peak of more than US$130/lb to US$75/lb. The lower level is still a great price compared with the sub-US$10/lb levels of 2002. And the outlook remains strong, thanks to growing acceptance that nuclear power has a role to play in tackling global warming at a time when mine supply continues to fall well short of annual consumption. So well-funded uranium juniors with a near-term opportunity to become a producer can expect to continue to find market support.
    Perth-based Black Range Minerals is one such company. It is focussed on the US, where regulations and sentiment encourage uranium exploration. It is a very different story in Black Range’s home state of Western Australia where uranium mining is banned. It is Black Range’s US uranium success, from a mix of exploration and acquisition, that has put it on the radar. At time of writing, it had a market capitalisation of A$53 million (US$47.5 million) against which it was holding cash at the end of the December 2007 quarter of A$13.6 million (US$12.2 million) with which to fund its ongoing exploration/development program. Black Range holds three advanced uranium projects in the US – Taylor Ranch in Colorado and Eagle and Cyclone Rim, both in Wyoming. Taylor Ranch is the group’s flagship project and has a compliant inferred resource of 132.8Mt at 0.027% for 79.6Mlb of uranium using a cut-off grade of 0.01% uranium. Raising the cut-off grade to 0.075% cuts the tonnage to 8.4Mt but the grade is raised to an impressive 0.12% uranium for 22.2Mlb contained. In presentations to investors, Black Range likes to point out that if the 0.025% cut-off grade at ASX-listed Paladin Energy’s Langer Heinrich deposit in Namibia is applied to Taylor Ranch, its resource is about half the size and is of the same 0.06% grade. The point there is that Paladin is now a A$3 billion (US$2.68 billion) company, albeit with more to its valuation than just
    Langer Heinrich. The point being made by Black Range managing director Mike Haynes is that the company is one of the most undervalued uranium stocks on the ASX. “We have defined a very large compliant resource base which includes a substantial high grade component,” Mr Haynes told WMS. “We have also commenced scoping studies to develop the resource and have commenced the mine permitting process in a jurisdiction that is amenable to uranium exploration and mining. “So unlike most other uranium companies, Black Range is very close to production at a time of historically high uranium prices.” Taylor Ranch sits just to the north of the 1977 Hansen uranium discovery (about 30Mlb). Hansen was fully permitted and ready to go in the early 1980s but was held up because of the uranium price slump at the time. Black Range acquired the Taylor Ranch land package immediately to the north of Hansen in late 2006. It was lightly explored but known to host extensions of the same mineralising system. Additional land was secured so that by July 2007, the project area had grown to some 9,500 acres and covered some or all of the mineralisation at the North Hansen, Northwest Hansen, Picnic Tree and High Park uranium discoveries of the 1970-1980s. The project is strategically located 35kms north-west of the licensed uranium mill – one of only four in the US - in Canon City. Black Range began a major drilling program in April 2007. It was both of an infill and extensional nature and resulted in the discovery of the Boyer uranium deposit in September 2007, between two known deposits. Boyer has proven to be a major find, accounting for 30% of the total current resource estimate at Taylor Ranch. “We acquired the Taylor Ranch a little more than one year ago and fast-tracked exploration by having as many as six drilling rigs operating on the project simultaneously,” Mr Haynes says. “It has been a remarkable effort to delineate almost 80Mlb of uranium at the project in a little over one year and then to initiate a scoping study with a view to commencing mining within two to three years.” Independent consultants are now working on resource/reserve calculations, mine design and engineering, metallurgical test work and geotechnical and hydrological studies. Black Range told the market in late January 2008 that initial indications were that a staged development approach would assist the group’s fast track plans. The initial stage – the first three to five years - would involve underground mining with extraction of 300,000-500,000t/y.At ore grades of 0.12% to 0.15%, and with toll treatment through existing (licensed) processing facilities, output would be 1-1.25Mlb/y of uranium. A second stage expansion would potentially involve an expansion of the underground operation, possibly combined with open pit mining. At an extraction rate of about 1Mt/y at lower average grades of 0.10% to 0.12%, and treatment in company owned facilities, production of 1.5-2Mlb/y of uranium is envisaged. That is the current planning. Additional exploration success like the discovery of the Boyer deposit could change longer term plans. As it is, Boyer has additional potential, with an 800m long corridor extending south from the deposit to the North Hansen deposit a high priority exploration target. Black Range’s Eagle and Cyclone Rim uranium projects in Wyoming are both within 25km of Rio Tinto’s licensed Sweetwater mill. The company is earning a 50% interest in both from Uranerz Energy Corp. More than 110 holes have been drilled at Eagle which has enabled an initial resource estimate to made of 4.7Mlb grading 0.023% uranium. The drilling of 43 holes at Cyclone Rim since July 2007 took the total number on the property to more than 150 holes. A compliant resource estimate is close to being announced. Back in Australia, the Koonenberry base metals project has a long history. Located in western New South Wales, the project sits on the southern end of the Koonenberry belt and covers some 600km2, including the historic Grasmere copper deposit. High grade copper was mined there in the late 1800s and early 1900s but limited exploration has taken place since. Rio Tinto drilled some holes between 1988 and 1991 and delineated a small but high grade copper deposit. Black Range picked up the running in 2005 and has established a compliant indicated and inferred resource of 5.7Mt grading 1.03% copper, 0.35% zinc, 2.3g/t silver and 0.05g/t gold. Recent work has concentrated on only a 4km section of the 50km of prospective stratigraphic horizon on the licence area, prompting the decision to take a step back and take a look at the bigger picture. An airborne electromagnetic survey has been completed over the entire project area and Black Range’s plan now is to entice a joint venture partner to come in and add to the Koonenberry story, allowing it to concentrate on becoming a US uranium producer.
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