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ESO Uranium to Drill Near a Promising Hole from the 1970s
“I look at about 100 different projects a year and most of them end up in the round filing cabinet on my floor,” said Tony Harvey, senior technical advisor to ESO Uranium (TSX:ESO) and formerly a senior manager at Wright Engineers-Fluor Daniels, involved in the design and construction of 14 mines around the world. Harvey quickly listed what it takes to get his attention: “I need to see history. I need to see the signposts before I give it credence.” So why, after a long and productive career, is he advising little-known ESO Uranium? Harvey helped found Amex-listed Azco Mining and, more recently, was a director of Mexican mining firm Cobre del Mayo, which sold two of its last three mines he helped discover to Phelps Dodge (NYSE:PD).
“I believe this mine has a very big history,” Harvey says. “Not only do you have the Cluff Lake mine confirming the presence of uranium, but you also have the Shea Creek drill intercepts confirming it. We have conductors flowing through our property. We have rocks, which is another signpost.” The rocks Tony Harvey is referring to are six uranium mineralized rocks located near the company’s ESO Uranium project on the Cluff property. Near these rocks, a promising drill hole from the 1970s showed 0.85% U3O8 over 2.3 meters. It was forgotten until the recent exploration activity boom in Saskatchewan’s Athabasca Basin, which helped Cameco (NYSE: CCJ) grow into a company with a market capitalization of nearly $12 billion.
What ESO Uranium’s geology team will be looking for on the company’s Cluff property are Cluff Lake-style uranium deposits in basement rocks with a Carswell structure close to unconformable with the sandstones of the Athabasca group.
Drilling on Meteor’s Trail
“At today’s value of the ore mined from the Cluff mine, that’s 2.6 billion dollars,” Harvey explained. “That’s how much was mined from the Cluff mine.” Benjamin Ainsworth, the company’s vice president of exploration, who is both a senior geologist and a mining engineer, helped explain the Cluff structure. “A meteorite probably struck at this location and with enough force to break through the layers of Athabasca sandstone at the surface. As it bounced back, the underlying rocks were lifted up again. As it bounced back, it also lifted up the surrounding Athabasca rocks and tilted them upwards, if you can imagine, like a flower in bloom.” As a result, the basement came to the surface, making it easier to find and extract the uranium at Cluff. Ainsworth continued: “The importance of this for me and our group is that it shows that there are very high-grade uranium deposits on the west side of the Athabasca.”
Drilling on a property helps the geology team better understand the area. Since the Cluff property was mined two decades ago, additional scientific work has opened new doors. University of Quebec Earth Sciences professors presented a paper titled “Reassessing the Size of the Carswell Astroblem” at the 67th Annual Meteoritical Society Meeting. At the annual conference in Brazil in 2004, Montreal scientists concluded: “The Carswell impact structure is therefore older and larger than previously estimated. the central uplift, thought to be beneath the ring-shaped dolomitic unit, indicates a crater size of 118 to 125 kilometers wide at the base.” While some believe the meteorite fell about 478 million years ago, recent evidence suggests it may be closer to 1.8 billion years ago.
Angled Drilling This Time
ESO Uranium is planning a six-hole drilling program to learn more about the Cluff property. The first hole hopes to confirm what has already been found: “We will drill directly opposite hole CAR-2.3, drilled in the 1970s, which showed about 0.85 percent U3O8 uranium over 425 meters.” They will drill adjacent to uranium mineralized rocks. Ainsworth explains how the company’s strategy differs from previous drilling: “We’re drilling holes at an angle to give us a better opportunity to find more structures that can carry mineralization in this type of system.” In the 1970s, holes were drilled vertically. “We’ll be heading southeast, which will bring us closer to the original Cluff mine,” Harvey added. The company is planning 150- to 200-meter holes. “The CAR-425 drill hole we are approaching is 146.5 meters deep,” Ainsworth said.
Robert Beckett, ESO Uranium’s exploration manager, agreed about the 55-degree angled holes the company will drill on the Cluff property: “They’ve been drilling vertical holes and we want to go back and check that with an angled hole, which in theory we interpret as a kind of subvertical system.” Beckett mentioned that additional drilling to the south after the discovery of the site revealed that “the structure extends from the edge of the basin to Shea Creek.” Beckett continued: “We believe this structure extends north of our property at 11 o’clock. We see these conductors extending up Shea Creek – the conductors, and by extension the structures, are extending onto our property. And these structures are the key – the disappearance of the upper fold and the unconformity in the bedrock provides the right conditions for uranium deposition.” Prior to joining ESO Uranium, Beckett was a regional geologist for Esso Minerals and the Saskatchewan Mining Development Corporation, which later merged with El Dorado Nuclear to become Cameco Corp. He was exploration manager at Midwest Lake and project manager at the Port Radium mine.
Hook Property
Another property in the ESO Uranium portfolio that requires additional preparatory geological studies and exploration drilling is the Hook property. It is about ten miles south of the Shea Creek deposit and covers approximately 130,000 acres. The western third of the property has been minimally explored. Jonathan George, CEO of ESO Uranium, said: “Hook is one of the areas I’ve been particularly excited about since we received the airborne geophysical survey, because the conductors have come out very strongly and combined with dravite, an alteration clay that is an important indicator for uranium deposits.” Mr. George believes his company could be a new target area. “Cameco is drilling right on the doorstep on another project they have,” he added. He noted that Cameco is drilling just south and east of the southern edge of the ESO, below the company’s boundary.
Ainsworth was also optimistic, saying, “That was one of the reasons this ground was selected earlier – Cameco had this position and I could see in the information available that there was a good probability that structures and other types of systems were present.” “We’re going to drill because we see intense alteration at surface, the source of which has never been found before. That alteration coupled with the structure leads us to believe that we have a great chance down there.”
“I think we’re much closer to finding something at Cluff right away,” Ainsworth insisted. “Putting some news on the table early is probably a good thing.” He warned that drilling for uranium deposits was too risky. “The geometry of these things is very small.” George pointed out that half of the world’s richest uranium deposit, the McArthur River deposit, which holds about 400 million pounds of uranium, is located in an area about the size of a football field. “I think it’s inconceivable that a $7 billion project could take place in such a small area,” he said.
Conclusion
Drilling on the Cluff property is imminent, depending on ice thickness in Saskatchewan. News will come fairly quickly. Ainsworth warns: “The individual deposits at Cluff are actually quite small.” Even though a lot of work has been done in the Cluff area, many people admit that it is very easy to overlook it. But Ainsworth says cheerfully: “The key point here is that the grade is so high that it’s worth pursuing further.”
Another key to ESO Uranium is the strength of the exploration team. Tony Harvey, the technical advisor, has had countless successes during his long career. Robert Beckett spent decades exploring in Saskatchewan and was responsible for the northern half of the Athabasca Basin for the pioneering company Cameco. Benjamin Ainsworth has held a number of senior positions at Placer since 1965, including a term as president of Placer Chile.
According to Tom Corcoran, ESO’s Corporate Communications Manager, “Right now we’ve raised about C$4.7 million and we’ve earmarked that money for exploration above and below ground. If we don’t spend that money on drilling or exploration, we have to give it back.” According to Robert Beckett, ESO was planning to start drilling for uranium in early February, but had to postpone the start of drilling until the weather turned colder. The drilling is very close and the results are expected to come out fairly quickly. Ainsworth gave us an idea of how soon we could know the drill results: “The thing about uranium is that, unlike drilling for gold and other metals, when you’re logging the drill core you get a radioactive signal. So you can get a pretty good idea of whether there is something there. You can’t get a very precise assay at this point, but at least you can focus very quickly. You can see these uranium minerals with the naked eye.”
We look forward to seeing the drill results shortly.
