Tubas Red Sand Project - December 2011

The Tubas Red Sand Deposit (TRS) consists primarily of low grade secondary uranium mineralisation (carnotite) in well-sorted aeolian (windblown) sand which occurs immediately south of the Tubas palaeochannel (Figure 1).

The deposit was discovered by RUN in mid-2007 when an intersection of 10 metres at 1,638 ppm U₃O₈ from surface was returned (in red sand) as part of wider RC drill programme designed to verify resource drilling (non-JORC) carried out on the Tubas Palaeochannel by Anglo American (1970’s).  Additional intercepts in ‘brown sand’ of 12 metres at 1,036 ppm U₃O₈ from 3 metres and 13 metres at 1,050 ppm U₃O₈ from 7 metres were also returned from drilling 2 km and 3.5 km east of the red sand intercept respectively.

As follow-up, a small area around the high grade intercept was intensely drilled and a trial mining trench (Figure 2) which was excavated to acquire bulk samples for physical beneficiation testwork.  This was followed by a detail aircore drill programme (Figure 3) from which a JORC Resource estimate totalling 13.9 Mt at 159 ppm U₃O₈ for 4.9 Mlbs U₃O₈ at 100 ppm U₃O₈ cut-off (Table 1) was determined.  The resource estimate for TRS was considered as initial, as this style of mineralisation has been encountered in numerous drillholes outside the resource area.

The sand has no obvious internal structure and is most likely a buried dune or meander bank deposit (Figures 4 and 5).  Red sand was commonly found to be the mineralised host during the Tubas drilling campaign in 2007 and the drill logs are now being re-interrogated with the geological knowledge gained from the trench mapping.

Distribution of carnotite occurs as blebs and blotches or is finely distributed throughout the sand quite often as a uniform dusting causing a slight yellow discolouration of the host red sand and is quite spectacular as can be seen in the photograph below.

It is important to note that the complete section down to the basal calcrete at around 11 metre is free digging (Figure 2).

TESTWORK PROGRAMME

Pilot plant testwork (Figure 6) early in 2011 demonstrated that the TRS deposit could be physically beneficiated in an economical and chemical free process to produce a low carbonate, uranium rich concentrate.  The upgraded material is suitable feedstock for the proposed Omahola plant with testwork showing that:

• over 80% of the uranium could be recovered in less than 20% of the feed mass;
• uranium content could be upgraded by as much as a factor of 6.9; and
• carbonate could be reduced by up to 86% giving lower acid consumption in the leach process.

The outstanding results (ASX 6 April and 6 September 2011) mean that a full scale plant designed and supplied by Schauenburg MAB GmbH, Germany (Schauenburg), together with a scrubbing and a de-watering circuit, can most likely be used to cost-effectively upgrade the TRS deposit.  As a result of the success of this testwork, a Schauenburg-supplied plant would have a process guarantee.

 A second testwork programme on a low grade TRS trench sample (140 ppm U₃O₈) showed that the removal of slimes and ultra-fine particles prior to scrubbing and processing through the Schauenburg pilot plant reduces power requirements and improves recoveries.  In addition there was an improved uranium upgrade factor of 7.9, which will now allow the cost effective processing of even lower grade sand

In summary the results demonstrate that even lower grade sand-type ores (below 150 ppm U₃O₈) could potentially be economically beneficiated.  This would allow a reduction in the cut-off grade to around 60 ppm for the TRS deposit which would result in a significant increase in the resource base, as can be seen from data given in Table 2 below.

This breakthrough will potentially increase the size of the available resource that could be economically beneficiated with the Schauenburg process.  The Tubas Red Sand deposit is now being re-interpreted to include additional sand intersections from the Tubas Palaeochannel resource so as to increase the size of the existing 4.9 Mlb JORC compliant resource.  A significantly larger sand resource together with the application of this technology could lead to a standalone project.

The justification for using a lower cut-off grade for the TRS deposit is based on unique aspects of the deposit. Firstly, the deposit is very near surface, with only minimal cover of wind-blown materials and gravel-gypcrete-calcrete of 1-2 metres. Secondly, TRS is predominately free-flowing to loosely consolidated sandy material. The combination makes the deposit amenable to simple and low cost mining techniques. Thirdly, TRS material tests positively to relatively simple beneficiation; that being attrition scrubbing with balls followed by screening.

As a consequence of the very positive beneficiation results and free-digging nature of the red sands from surface (Figure 2), it is highly likely much lower grades of uranium can be economically mined.  For example – 150 ppm U₃O₈ run-of-mine material can be potentially upgraded to +500 ppm U₃O₈ for processing with primary Ongolo-INCA material.

Red sand hosted uranium mineralisation has been encountered in numerous drillholes outside the current resource area. This suggests that mineralised red sands occur adjacent to and may potentially flank the mineralised Tubas-Tumas palaeochannel system which stretches some 30 kilometres across RUN’s EPL3496.  The true extent can only be determined with future drilling.  Red Sand at Tumas Zone 3, 20 kilometres east of TRS returned 8 metres at 516 ppm U₃O₈ from 5 metres depth.