The first phase of drilling at Latitude Uranium’s (Latitude Uranium Inc (CSE:LUR, OTCQB:LURAF)) Angilak project in Nunavut is now well underway.
The results will be intensely scrutinized by investors and uranium industry experts alike, but what’s already known is that they’re likely to show uranium, and lots of it. That’s because Angilak boasts a historical resource of 43 million pounds of uranium grading 0.69%. If those results can be replicated, they’ll put Angilak in the top 10% of projects by grade worldwide.
Twinning holes and working off historical data can often be circumspect, of course. But in this case, the guidance from history looks relatively strong.
For a start, although the earlier work is termed “historical” from a regulatory standpoint, it actually dates to just 2013. That’s relatively fresh by mining standards and also means the data was gathered in conformity with the standards set by National Instrument 43-101, which allows a lot more certainty to be attached to that “historical” number than might have been the case if the data stretched back to the 1960s or 1970s.
So, Latitude is on good ground right off the bat, and with $8 million allocated to the current round of drilling, the company has every chance to show that it has something worthwhile.
“We’re going to grow that 43-101 resource,” says Chief Executive Officer John Jentz.
But it’s not just the potential size of the resource and the grade that make Angilak an attractive proposition. There’s also its geological setting as a whole.
Uranium investors have sometimes walked away from opportunities in the sector after being dazzled by the very high grades encountered in the famous Athabasca region. But the Athabasca is an anomaly, not only for Canada but from a global perspective. It also comes with its own set of challenges, which can include rock types and depth.
None of those issues are present at Angilak.
“It starts at surface and goes down to 300 metres,” says Jentz. “It looks like a narrow-vein, sub-vertical, two-metre-wide sheet. You could open pit it. You could underground it. It’s easy to conceptualize.”
And remember, although the “historical” grades don’t look particularly special when set against those found in the Athabasca, they do nonetheless rank ahead of the vast majority of the competition.
“If you take the rock value, the grade at Angilak is a 16 gram to 17 gram per tonne gold equivalent,” adds Jentz. “It’s high grade.”
What’s more, preliminary work has been done on the potential application of ore-sorting technology if Angilak were to reach the active mine stage. Studies undertaken by the project’s previous owners showed that it might be possible to double, triple or even quadruple the grade to the mill.
“You have your conveyor belt,” explains Jentz, “and a scintillometer picks out what it thinks is ore and what it thinks is waste. The first study showed that we can get rid of 50% of the waste and only lose 3% of the ore. A further study showed that we can get rid of 84% of the waste and lose just 6% of the ore.”
So, there are plenty of routes toward making Angilak a potential highly economic project. Nevertheless, a good deal of work is still required.
The current program will encompass a minimum of 4,000 metres, but may well stretch to 6,000 metres, depending on results and weather conditions.
“It will also depend on how good the drill crew is,” says Jentz. “But so far, they’re outperforming. Our plan is to do 6,000 metres.”
And it won’t stop there.
“Next year,” he adds, “we plan to do substantially more: between 10,000 metres and 12,000 metres.”
For this season, the focus will be along strike and on the 5 kilometre trend over which the resource has already been identified.
“But the overall trend is 15 kilometres,” says Jentz.
That means that come next year, if the company so chooses, it won’t necessarily have to start going deeper to look for more ore, though it may yet be that the resource widens at depth, in which case such deeper work might be worthwhile. But first off, Latitude will have a look at the results from the core that’s coming up right now.
“Ultimately, we’d like to get to a resource of 100 million pounds,” says Jentz. “People’s perception is that you need 100 million pounds to get into production.”
The thinking is that Latitude will be able to show that it’s on track to meet that target following next year’s drilling. Whether it actually goes ahead and produces a formal number remains an open question, though.
“The trade-off is whether we do a preliminary economic assessment quickly or take the time to get to 100 million pounds,” says Jentz.
“It’s actually a mine today,” he adds. “I don’t know what the numbers are going to be, but that’s where it’s going. And because it’s high grade, it’s profitable at the current uranium price.”
High-level decisions about pushing on for resource numbers and tonnage, or going for the economics, will be put to shareholders, Jentz adds. “It’s going to be a function of our shareholders and what they want to do.”
And the shareholders in question include some pretty serious names, such as Mega Uranium and IsoEnergy. If that seems surprising, it shouldn’t be.
In certain back-of-the-envelope scenarios, with the grade and the potential resource, it’s possible to envisage a 1,000 tonne per day operation that produces 5 million pounds of uranium per year.
Jentz argues that such a scenario would put Angilak among the top 10 uranium mines in the world. “It’s a world class deposit in terms of grade and in terms of structure.”
So, what about the jurisdiction, then?
Well, Nunavut is pushing pretty far north, and it’s no secret that it can be expensive to drill there. On the other hand, capex for a relatively modest initial plant, says Jentz, ought not to be onerous. The yellowcake itself can be flown out in 100 litre drums that would be quite light.
“You or I could probably lift one,” he says.
He also points out that two of Agnico Eagle’s biggest mines are in Nunavut, and they’ve been operating for quite some time. Cameco is also there.
All-in-all, then, the stars are aligning nicely for Angilak.
The current working model is that the project conforms to the Beaverlodge style of mineralization first delineated in Saskatchewan in the 1960s. The Beaverlodge mine that was a result of that geological work went on to produce tens of millions of pounds of uranium. If that’s a precedent, it’s a good one.