Uranium enjoying a resurgence in Nunavut

Vancouver – A year and a half after Nunavut adopted a uranium development policy the territory is hopping with uranium exploration and development efforts.

From the mid-1970s to the late 1980s the land that is now Nunavut was crawling with uranium explorers. At that time most major oil and gas companies had mineral exploration divisions and uranium was the hot commodity of the day. Moreover, it was in the 1970s that geologists realized the sedimentary basins in the Kivalliq region of Nunavut, which include the Thelon, Baker Lake, Angikuni, and Yathkyed sub-basins, share striking similarities with the uranium-rich Athabasca Basin some 500 km south.

It was two German companies – Metallgesellschaft and Urangesellschaft – that discovered what is now the largest defined deposit in the region. The Kiggavik project, owned by French energy giant Areva, hosts 134 million lbs. U3O8 at an average resource grade of 0.23% uranium. Of that, recoverable reserves total 114 million lbs. U3O8, divided between four open-pittable deposits and one underground zone.

Late last year Areva initiated the formal review process for its development plans at Kiggavik by submitting a project proposal to the Nunavut and Canadian governments. It proposed developing three open pit mines at Kiggavik as well as an open pit and an underground mine at Sissions, an area 17 km to the southwest. A mill at Kiggavik would produce 2,000 to 4,000 tones of uranium in concentrate, or yellowcake, per year.

Waste rock carrying sub-economic mineralization would be stockpiled during mining operations then used to backfill the open pits. Two historic open pits already present on site would be converted into a tailings facility.

Kiggavik sits roughly 80 km west of the community of Baker Lake, which is accessible by barge from Hudson Bay during the short summer season. Areva plans to use barges to bring reagents, fuel, and supplies to Baker Lake; the company would then have to build a 100-km long road from Baker Lake to the project site. Yellowcake would be transported out of the mine via air, though during the summer drums of concentrate may also shipped by barge.

The project is expected to employ 400 to 600 people during operations and the current reserves would sustain a mine for 17 years. Areva expects the review process to take several years.

In the meantime, two other companies are exploring nearby projects. Kivalliq Energy (KIV-V) was the first company to negotiate a uranium exploration and exploitation deal with the Nunavut Inuit following the uranium development policy. The junior consolidated a land package that had been split between five companies during the last exploration rush and secured tenure to the land through a precedent-setting agreement.

Nunavut is the only territory or province in Canada where all land claims are settled. In creating the territory in 1999 the Inuit worked with the Canadian government to designate some lands as traditional territories; each Inuit group also gained control over other lands with the intent that that group could profit from any natural wealth it contained.

Nunavut Tunngavik is the company responsible for managing all Inuit-owned lands, acting as the advocate for Inuit interests in Nunavut. In early 2008 Kivalliq signed a deal with Tunngavik making it the first company allowed to explore for uranium on Inuit-owned land in Nunavut. In exchange, Tunngavik is receiving 1 million Kivalliq shares, assurance that Kivalliq will complete 6,000 metres of drilling within four years, and $50,000 annually. If Kivalliq outlines a measured resource of 12 million lbs. uranium, the company has to pay Tunngavik $1 million, and at feasibility the Inuit can elect a 25% project interest of a 7.5% net profits royalty.

The land package, now known as the Angilak project, has not been explored for 25 years. Kivalliq’s focus at present is the historic Lac Cinquante deposit. According to historical reports from previous owner Abermin, Lac Cinquante is home to a resource (not complaint with National Instrument 43-101 regulations) of 388,000 tons averaging 1.05% U3O8 in the probable category and 142,000 tons grading slightly better that was classified as inferred. Combined, the delineated tons host 11.6 million lbs. U3O8. But the report also points to another 8.8 million lbs. U3O8 it classifies as “possible”, which would bring the total U3O8 count to 20.4 million lbs.

To confirm this historical work Kivalliq, in the summer of 2008, found the old core shack, with cores intact and still labelled; identified 106 of 123 drill collars in the field; relogged and radiometrically tested old cores, sampling in places to re-assay; and flew a 5,620-km line survey for magnetic, electromagnetic, and radiometric data.

The samples from old core returned interesting results. Hole C24 carried a 1.5-metres intercept grading 2.24% U3O8 from 73 metres depth. Hole A50 returned 1.9% U3O8 over 1 metre from 60 metres downhole and hole A104 included 1.3 metres grading 0.6% U3O8 at 125 metres depth.

Following these efforts the company was able to construct a 3-D model of the deposit that shows uranium mineralization hosted in a layer 50 cm to 5 metres thick, stretching along 1.2 km strike and extending to 160 metres depth. The model will guide future drilling, which may take place this year.

Kivalliq’s property sits some 200 km south of Areva’s Kiggavik property. Directly adjacent to Kiggavik, on its eastern flank, is Forum Uranium‘s (FDC-V) North Thelon project. The road that would lead from Baker Lake to a Kiggavik mine would pass right through Forum’s land.

Less than a year after Kivalliq worked out its agreement with Nunavut Tunngavik for the Angilak property, Forum worked out a similar uranium exploration deal with the Inuit corporation. In December Tunngavik and Forum signed a deal giving Forum a 100% interest in the Inuit-owned Land Parcel BL-21. To earn its ownership, Forum pay 50¢ per hectare as a rental fee, spend at least $4 per hectare on exploration in the first year, and pay Tunngavik $1 million or $5 million on delineating a measured resource of 10 or 100 million lbs. U3O8, respectively. If the project goes into production, Tunngavik can choose either a 20% interest or a 7.5% net profits royalty. Tunngavik also received a 2% net smelter return on Forum’s nearby Tarzan and Nutaaq properties.

The land is located along the east-west belt of favourable rocks that hosts Kiggavik. Forum conducted an apparent resistivity survey over the area and it revealed several east-northeast structures as well as a major northeast structure that hosts several uranium showings. The intersections of these structures produce a similar setting to that which hosts the Kiggavik deposit.

In 2009 Forum plans to complete a ground gravity grid and till sampling to further inform a diamond drill program.

Forum’s team certainly seems up to the challenge of finding uranium. The company’s vice president of exploration, Ken Wheatley, has 30 years of uranium exploration experience. In that time he discovered 132 million lbs. of uranium in eight deposits in the Athabasca Basin. And Forum’s chief geologist, Boen Tan, has spent 38 years searching for uranium, and successfully – Tan discovered the 200 million lb. Key Lake deposit.


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