Western Uranium tables Kings Valley resource

VANCOUVER — An initial resource estimate for Western Uranium’s (WUC-V, WURNF-O)Kings Valley project in northwestern Nevada reviews roughly 4.8 million contained pounds U3O8 hosted in three zones.

The independent study by AMEC engineers estimates inferred resources at 2.7 million tonnes grading 0.081% U3O8 using a 0.05% U3O8 cutoff grade in the South and Moonlight zones and a 0.035% U3O8 cutoff in the North zone.

Western Uranium points out the inferred resource shells occur within wider zones of mineralization that have not seen enough drill testing to be categorized as a resource.

AMEC indicated that if it can be demonstrated that some of the byproduct metals (molybdenum, gold and silver) can be recovered and included in the existing block model, it would effectively allow for a lower uranium cutoff grade and add resources.

The Kings Valley area was first explored by Chevron Minerals and Anaconda in the late 1970s — resulting in a historic (non-National Instrument 43-101 compliant) resource estimate of about 17.1 million contained pounds U3O8 in 7.8 million tonnes grading 0.1-0.15% U3O8 in the three mineralized zones. Those companies identified molybdenum, gold and silver mineralization in the rock, but did not consistently analyze all its drill holes for them.

Western Uranium notes it has encountered significant “byproduct” metals in its past drilling; hole 25 cut 32 metres of 0.51 gram gold per tonne, hole 28 intersected 9 metres of 14.5 grams silver and hole 19 returned 10.7 metres of 1.26 grams gold, 13.7 metres of 38.7 grams silver and 19.8 metres of 0.021% molybdenum.

With several kilometres of potentially favourable geology between the North, South and Moonlight zones, Western Uranium believes the area warrants further drilling. The company also says it is considering some underground development work that would facilitate a more effective drill effort to test deeper uranium mineralization in the South and Moonlight zones that is projected to be higher grade.

The company also plans to drill-test a pair of significant radon soil gas anomalies — in the Bull Basin and Old Man Springs target areas –with 35-50 holes starting in May.

Historic uranium mineralization at Kings Valley is primarily associated with structural breccias, along lithologic contacts and as disseminated grains in late-stage felsic dykes. The deposits are associated with the McDermitt caldera– an 18-km-diameter collapsed volcanic feature with similarities to the Streltsovka caldera in the Transbaikalia region of eastern Russia, near the Chinese-Mongolian border.

Streltsovka hosts the world’s largest uranium deposits associated with a volcanic setting and is Russia’s largest resource of the energy metal. It has yielded more than 600 million lbs. U3O8 in 45 years of past production and current resources contained within 20 deposits are estimated to average roughly 0.2% U3O8.

Last summer, Western Uranium formalized an agreement with Cameco (CCO-T, CCJ-N) that saw the uranium major invest $21.2 million in the company.

Cameco bought almost 5.6 million Western Uranium units (composed of a share and half a warrant) at $3.80 apiece with the warrants exercisable at $4.25 for one year. The deal gave Cameco roughly a 10% interest in Western Uranium and rights to earn a 70% interest in any economically viable standalone deposit developed at any of the junior’s current projects (in Nevada, New Mexico, Nunavut and the Northwest Territories), once an indicated resource of 15 million contained pounds U3O8 is defined.

On either of Western Uranium’s Kings Valley project in Nevada or its Treeline property in New Mexico, the 15 million lbs. U3O8 must be in addition to current historical resources.

To earn in on a deposit and form a joint venture, Cameco must pay Western Uranium at least US$5 per lb. U3O8 for each pound of its 70% share of any resource or reserve outlined in a mine plan. The major will also pay an additional premium based on fluctuations in the uranium spot price.

Cameco is obligated to carry Western Uranium through to feasibility at any such joint-venture project.

Western Uranium shares have recently traded at around $1.80, giving the company a $107-million market capitalization based on its 59.2 million shares outstanding. The stock has a 52-week trading range of $1.54-4.15.