Yeelirrie
Yeelirrie is a near-surface calcrete-style deposit that is amenable to open pit mining techniques. It is one of Australia’s largest undeveloped uranium deposits.
| Location | Western Australia |
| Ownership | 100% |
| End product | Uranium concentrates |
| Mine type | Open pit |
Background
The Yeelirrie deposit was discovered in 1972 and is one of Australia’s largest undeveloped uranium deposits. In December 2012, we completed the purchase of Yeelirrie from BHP Billiton Yeelirrie Development Company Pty Ltd for $430 million (US) and then paid $22 million (US) in stamp duty to the government of Western Australia. Yeelirrie represents an attractive deposit that fits well with our long-term strategy.
A historic estimate of the mineral content of Yeelirrie was prepared for BHP Billiton in June 2012 by an international mining consulting firm. The historic estimate indicates that Yeelirrie hosts measured and indicated mineral resources of approximately 139 million pounds of U3O8, with an average grade of approximately 0.13% U3O8 and inferred resource of approximately 5 million pounds at 0.10% U3O8. This historic estimate uses resource categories from the Australasian Code for Reporting of Identified Mineral Resources and Ore Reserves (the JORC Code). The acquisition closed at the end of the year and we have not had sufficient time for a qualified person to classify the historic estimate as current mineral resources for purposes of National Instrument 43-101 – Standards of Disclosure for Mineral Projects (NI 43-101). We are not treating the historic estimate as current mineral resources.
Summary of historic estimate for the Yeelirrie project
(Non-compliant with NI 43-101)
(tonnes in thousands; pounds in millions)
| Measured Resource | Indicated Resource | Inferred Resource | ||||||
|---|---|---|---|---|---|---|---|---|
| Tonnes | Grade % U3O8 |
Content (lbs U3O8) |
Tonnes | Grade % U3O8 |
Content (lbs U3O8) |
Tonnes | Grade % U3O8 |
Content (lbs U3O8) |
| 16.61 | 0.16 | 60.3 | 31.03 | 0.12 | 78.9 | 2.41 | 0.10 | 5.3 |
The above historic estimate was based on 10,250 surface holes, of which nearly 4,000 diamond drill holes had assay values and the rest had uranium grade measured by downhole radiometric probing. The interpretation of the mineralization envelopes at a cut-off of 0.05% U3O8 focused less on strict application of a grade cut-off, and more on the assumption of significant continuity of the mineralized zones. The uranium grade was estimated for blocks of 25m by 25m by 0.5m.
We consider the historic estimate relevant as an indication of the potential of the Yeelirrie property and believe that the total uranium content of the historic estimate may be overstated by approximately 10%. The historic estimate should not be relied upon as a quantification of mineral resources, given that, in our opinion approximately 50 million pounds of U3O8 reported as indicated resources would have to be re-categorized because they are not supported by sufficient drilling density and geochemical assays characterizing the uranium grade and other mineral components of the mineralized material.
Planning For the Future
In 2013, we expect to:
- conduct a full document review of Yeelirrie
- complete a mineral resource estimate in accordance with NI 43-101
Yeelirrie is an important asset in our portfolio and is part of our plan to sustain our production beyond 2018. Based on our assessment of the deposit and the benefits we expect to derive, we believe we paid a fair price. We will advance the development of this project at a pace aligned with market opportunities, using our stage gate process.
Managing Our Risks
We manage the risks listed here.