SOUTH AFRICA – URANIUM 

(Peninsula Energy 74% / BEE Groups 26%)

INTRODUCTION

Peninsula has a 74% interest in a total of 40 prospecting rights (PR’s) covering 7,800 km² of the main uranium-molybdenum bearing sandstone channels in the Karoo Basin (Karoo Projects). Peninsula completed the acquisition of 35 of these PR’s, previously held by AREVA, in December 2013. The residual 26% interest remains with the BEE partners as required by South African law.

The Karoo Projects are categorized into the Eastern and Western Sectors as shown in the diagram below. In the Eastern Sector, Peninsula has freehold ownership over an area of 322 km² which covers a significant proportion of the reported resource and allows unlimited surface access. 

South Africa – Karoo Uranium Projects Area Locations

Peninsula commenced activity in South Africa in 2006 and was awarded prospecting rights by the Department of Mineral Resources over six project areas located in the Western, Northern and Eastern Cape Provinces. These prospecting areas include three historic deposits that were explored by JCI and Union Carbide Exploration Corporation during the late 1970’s and early 1980’s.

The aim of exploration work on the original six PR’s has been to evaluate historic exploration targets and develop new targets throughout the Karoo. Since commencement of exploration Tasman has completed approximately 31,000 metres of Reverse Circulation and Diamond drilling and geophysically logged an additional 15,000 metres of open historic holes at three of the original six PR’s. 

The acquisition of AREVA’s assets in South Africa brings an additional 35 PR’s and 597,000 metres of drilling into the database. Recent work has been undertaken to compile and validate all data from Tasman’s own drilling areas and the new data acquired from AREVA in order to produce a 3D geological model and JORC compliant resource estimate, as detailed below.

Various studies have determined that uranium and molybdenum mineralisation is hosted in fluvial channel sandstone deposits in the western and central parts of the Main Karoo basin within the Adelaide Subgroup and to a much lesser extent, the Molteno and Elliot formations of the Permian-Triassic Beaufort Group (Karoo Supergroup). The occurrences are epigenetic, tabular and sandstone-hosted and the thickest sandstone bodies tend to contain the highest proportion of mineralisation.

The PR’s acquired from AREVA are complementary, in terms of mineral endowment, geology and geographic location, to the assets that Peninsula held in the Karoo Basin prior to the acquisition. The combined Karoo Projects contain 50mlbs Indicated and Inferred Resource (JORC 2012 Code) with a further exploration target of 200m -300mlbs U3O8 (refer Table below).

CURRENT WORK

In September 2013 Peninsula announced that a scoping study has been completed on the Eastern Sector of the Karoo Projects by South African based engineering, procurement and construction consultants DRA Mineral Projects (Pty) Ltd . Based on the positive results of the scoping study the Company has commenced a Pre-Feasibility Study, using an alkaline processing route for the planned central processing plant. 

The Scoping Study followed a drilling program that commenced In February 2013 along the Ryst Kuil channel in the Eastern Sector of its Karoo Projects which has returned encouraging initial results. 

To date Peninsula has completed a total of 67 reverse circulation holes for a total of 2,745 metres at the De Pannen project area. This drilling has been successful in its objectives of identifying additional areas of mineralisation outside the current resource limits and also in converting existing Inferred mineralisation to Indicated status.

 An extensive review of the geological data is being conducted in order to improve the geological model, which will add confidence to the resource estimation. The process involves interpretation of the geological units and stratigraphic coding, which will allow for better correlation of the mineralised zones within them. This may be of particular importance in areas of lower density drilling that have been allocated to the Inferred Resource category on the basis of geological confidence.

 The results from the drilling program to date are consistent with the historic drilling results and confirm the presence of shallow uranium mineralisation (from surface to 150m). Within the channel system, uranium and molybdenum mineralisation is localised within smaller-scale sedimentary features in the order of 1-2m in thickness and up to several hundred metres in length. The shallow nature of the mineralisation and resources are potentially amenable to open pit mining which would have highly favourable implications for the economics of the planned operations at Karoo.

As well as facilitating the conversion of existing inferred resources to indicated status, step out drilling beyond the historically mineralised zones has returned high grade intersections which are expanding the limits of the known mineralisation. 

In addition to the above, Peninsula is continuing with a down-hole gamma logging program at Ryst Kuil to validate the historic results at the project. As part of the resource delineation process, Peninsula completed a detailed QA/QC study comprising the confirmation of drillhole locations and verification of historic down-hole radiometric logging procedures and results. In total Peninsula has now probed 336 holes in the Ryst Kuil trend area totalling 30,386 metres. The results have been successful in validating the historic data.

JORC COMPLIANT RESOURCE

In February 2013 Peninsula announced an initial JORC Code-compliant Mineral Resource estimate of 50.1Mlbs eU3O8 at the Karoo Projects. This estimate included an indicated resource of 15.7Mlbs grading 1,020ppm eU3O8 above a cut off of 600ppm eU3O8. This was followed by an updated JORC Code-compliant Mineral Resource estimate of 56.9Mlbs eU3O8 at the Karoo Projects in March 2014. The increase in the Karoo resource was the result of the inclusion of data from the 2013 drill program and the adoption of a revised block model reporting methodology in line with the Local Uniform Conditioning formalism.

Previous exploration conducted by Esso Minerals Africa (Esso), JCI and Union Carbide at the Karoo Projects in the 1970s included 1.6 million metres of drilling together with trial open-cut and trial decline mining programs. Based on the results of these programs, the previous holders of the PR’s estimated approximately 99Mlbs U3O8 and 61Mlbs molybdenum (Mo). 

Peninsula has focussed on bringing approximately half of this total, for which drilling data is available, to a standard suitable for reporting under the Joint Ore Reserves Committee (JORC Code 2012) guidelines. The remainder, comprising up to 48Mlbs U3O8 in historical estimates, for which drilling data is not available, will be targeted in future drilling programs with the objective of converting as much as possible to JORC Code-compliant resources.

The updated resource estimate, as shown below, is based on 7,230 drill holes from a database comprising 9,343 drill holes, which includes 1,245 additional holes probed or drilled by Peninsula since 2011, including 16 diamond holes and 801 reverse circulation holes.

Table 1: Classified JORC Code Compliant Mineral Resource Estimate, Karoo Projects

ClassificationeU3O8 (ppm) cut-offTonnes (millions)eU3O8 (ppm)eU3O8 (million lbs)
Indicated600 8.0 1,242 21.9
Inferred600 15.3   1,03835.0
Total60023.3 1,10856.9

The resource estimate was undertaken by independent consultants Optiro Pty Ltd. Mineral Resources have been classified on the basis of confidence in geological and grade continuity using the drilling density, geological model, modelled grade continuity and conditional bias measures (kriging efficiency). Indicated Mineral Resources have been defined generally in areas of 50m by 50m drill spacing.

Inferred Mineral Resources have been defined in areas of 100m by 100m up to 400m by 400m drill spacing. A bulk density of 2.67 t/m3, (based on 1,425 representative determinations), was applied to derive the resource tonnage.

The historic and current drilling is distributed over two main areas – the Western and Eastern Sectors (Figure 1) - and includes results for more than 4,000 mineralised intervals. Drill-spacing varies from 100m by 100m to 25m by 25m with the majority of indicated resources drilled at an average spacing of 50m by 50m.The Eastern Sector covers the majority of the reported resources including the Ryst Kuil Channel and Quaggasfontein. The Western Sector encompasses the Maitjieskloof and Slingersfontein resources, together with the majority of the exploration targets. Total resources by Sector are detailed below.

Table 2: Detailed Classified JORC Code-Compliant Mineral Estimate, Karoo Projects: eU3O8

ClassificationSectoreU3O8 (ppm)
CUT-OFF
Tonnes (millions)eU3O8 (ppm)eU3O8 (million lbs)
IndicatedEastern6007.11,20618.7
Western6000.91,6573.2
InferredEastern60011.81,04627.2
Western6003.51,0197.8
Total 60023.31,10856.9
Note: Totals may not sum exactly due to rounding

EXPLORATION TARGET

The Karoo Projects cover a significant proportion of the Karoo Basin Permian sandstones, which are believed to represent an Exploration Target of between 250 and 350Mlbs U3O8. This Exploration Target, as shown below, is based on the total cumulative prospective strike length of about 200km that occurs within the PR’s, together with the reported U3O8lbs/km along the modelled sections of the Eastern Sector channel sandstones. Further drilling will be required in order to define a resource estimated in accordance with the JORC code and there is no guarantee that a resource will be defined.

Table 3: Karoo Projects Total Exploration Target

Exploration AreasTonnes (M)Grade  (ppmU3O8)eU3O8(Mlbs)
RangeFromToFromToFromTo
Total1261339001200250 350
Please note that in accordance with Clause 17 of the JORC (2012) Code, the potential quantity and grade of the ”Exploration Target” in this table must be considered conceptual in nature as there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource.

The current Karoo resources are located on two well-defined sedimentary channels that each extends for up 100kms along strike. These channels have been tested both recently and historically with approximately 10,000 exploration drillholes. Along these channels JORC-compliant resources have been estimated in localised areas in which reliable drilling data is available. The zones between the JORC-compliant resources areas form the Exploration Target because of the following:

  • Continuity of the prospective sandstone established by geological mapping and regional drilling.
  • Historic estimates of mineralisation based on drilling which has not yet been validated by Peninsula.

The JORC-compliant resource of the RystKuil channel alone, which represents the most completely drilled portion of the resources, comprises 17.2Mt at 1,048ppm eU3O8. This resource tonnage is distributed over a cumulative strike length of 23km representing approximately 0.75Mtonnes/km. The Exploration Target is based on a combination of:

  • the total cumulative prospective strike length of the undrilled sections of the channel multiplied by the demonstrated tonnage/km, combined with;
  • the areas of known mineralisation for which historic estimates exists but are not included in the JORC-compliant resource; and
  • the grade range represents the lowest resource area grades and highest resource area grades

Over the next 3-5 years ongoing exploration drilling is proposed to seek to expand the JORC-compliant resource within the Exploration Target areas. This initial 3-5 years program will be focussed on the Eastern Sector RystKuil channel. Testing of the Western Sector Exploration Target areas will commence beyond this time-frame.