Cue defines Yuty uranium resource

Cue Resources (CUE-V, CUEYF-O) has released a new resource estimate for a portion of the San Antonio uranium deposit in southeastern Paraguay, encouraging the company to continue with environmental baseline studies and further drilling for a prefeasibility study.

San Antonio is located on the Yuty project, a 2,360-sq.-km property that was explored between 1976 and 1982.

Cue only holds 30% of the project at the moment but may earn up to 100% from Transandes Paraguay S. A. by spending US$8 million over three years. It has fulfilled its earn-in obligations and is now waiting to receive a concession contract from the government of Paraguay.

Using down-hole radiometric logging data, the company has tallied the resource of the sandstone- hosted deposit in equivalent- U3O8 lbs. The validity of the equivalent (or estimated) uranium oxide grades was proven in February, with the chemical assays of 230 core samples.

Indicated resources total 7.8 million tonnes grading 0.03% estimated U3O8 for an estimated 5.1 million lbs. U3O8.

Inferred resources stand at 2.5 million tonnes grading 0.4% for 2.2 million lbs. estimated U3O8.

The company used a cutoff grade of 0.02% uranium oxide and a minimum thickness of 1.5 metres.

Preliminary leach test work has shown recoveries of up to 96.7%. Further leach testing will be done over the next month or two.

The deposit’s depth ranges from 80 metres to 150 metres depth, averaging about 100 metres.

Cue says that less than two-thirds of the San Antonio strike length was included in the resource. What was left out requires further drilling.

Before Cue began drilling last summer, there were 280 historical drill holes on the property. Since then, the company has drilled another 170 holes, which show that the core portion of the deposit is considerably wider than past exploration had demonstrated, with more consistent mineralization.

Drilling is at a standstill right now while the company takes stock of its resource estimate and prepares to put together a prefeasibility study, which will begin shortly.

Cue plans to resume drilling by August with 5,000-10,000 metres planned for the remainder of the year.

Cue also has a strategic alliance with Cameco Global Exploration, a subsidiary of Cameco (CCO-T, CCJ-N) for a private placement for US$4.5 million and three tranches totalling C$15 million.

So far, the company has received US$4.5 million and C$2.5 million. The deal gives Cameco the option to acquire up to 60% of the Yuty project in a joint venture but first it would have to pay Cue US$2 per lb. U3O8 on 60% of the U3O8 defined, pay all costs through to completion of a full feasibility study and then pay another US$7 per lb. on 60% of the U3O8 defined in the feasibility.

Cue won’t receive the third tranche until it is granted the concession contract and completes a column leach metallurgical test.