INTRODUCTION
In the news: Global Atomic Fuels, Savannah Resources & Antrim Energy
We are marketing a new uranium company in London next week — Global Atomic Fuels Corporation. Global Atomic, oh yes. This is definitely the sort of name a uranium company should have; no messing about, does what it says on the tin. This is a private Canadian company that is looking at going public in due course. Chairman and CEO Stephen Roman has been in London a few times and has a pretty nifty shareholder register in town. The management team is predominantly ex-Denison Mines Limited. Overall, the company has six permits covering 1,500km2 in the Agadez Region in central Niger, with its main target the Dasa Project.
The key to Global Atomic’s Dasa Project is its size and grade. Everyone knows Niger is a prolific uranium producing nation. Surely? If not, it is in fact the fourth largest global producer, and supplies 30% of Areva’s needs. Niger has been producing uranium for some 40 years, with the government actively participating in projects, ensuring interests are aligned, with permitting taking 4-6 months.
Dasa has a current resource of 77.8Mlb at 3,420ppm U3O8. The target is to hit 150Mlb U3O8 in 2016. The phrase ‘world class’ is thrown about with gay abandon in junior mining circles, but here it really is the case. The target is open along strike and at depth and is hosted in sedimentary sandstone, with metallurgical recoveries of around 95%. Over 104,000m have been drilled to date, and a further 15,000m of drilling is expected to result in a hefty resource increase. You can read a bit more about the company by visiting its website here, and we would strongly advise anyone interested in the uranium space to take a meeting next week.
METALS & MINING EQUITIES
Savannah Resources *† (LON:SAV)— Data Review Reveals High-grade Mineralisation at Historical Aarja Mine on Block 4, Oman — The AIM-quoted resources company focused on base metals and mineral sands exploration in Oman and Mozambique has announced that historical data from drilling at the previously-mined Aarja deposit includes numerous high-grade intersections from diamond drilling programmes carried out from the late 1970s to the early 1990s. Drill results included:
- 18.6m @ 4.7% Cu from 143m
- 24.0m @ 3.0% Cu from 143m
- 20.0m @ 2.5% Cu from 144m
These historical assay results are part of a database of information from the previous operators of the Aarja mine, the state-owned Oman Mining. A total of 84 holes are known to have been drilled into the deposit, for which data is available from 64 holes. Results from 14 of these holes were released in the announcement, as were the results of a trench recently completed by the company that returned 14.5m @ 8.0 g/t and 0.9% Cu over a gossan to the south of the old pit.
The Aarja deposit is located on Block 4, a project into which the company is earning a 65% interest.
RFC Ambrian Comment: The data set announced by the company includes many impressive results that we expect to enable it to convert quickly into a resource statement (once confirmed by the company’s own planned drill programme).
Plan of Aarja Trench Sampling and Historical Drilling
Source: Company data
The plan above shows the location of the holes relative to the Aarja pit. We also note that there is a VTEM anomaly approximately 300m to the north-west of the pit that the company also intends to follow up in the planned programme. The plan also shows the location of the gossan where the trenching was undertaken, just to the south of the pit.
Aarja Deposit Long Section
Source: Company data
The plan and the long section above indicate that the mineralisation in the Aarja Main Zone appears to be a pipe-like structure that plunges to the south-east at about 40°. It also indicates that there is another, parallel zone of mineralisation called Dogs Bone above the Main Zone.
Historical production from Aarja is reported to have been 2.6Mt grading 1.4% Cu, containing 36,000t of copper from workings to a depth of 150m. As shown in the long section above, mineralisation has been intersected at depths of up to 422m (Hole AEX-42).
There is also a copper concentrator and separate smelting facility located on Block 4, which are owned by third parties. Apparently the concentrator had been processing material from other licence areas until three months ago, which offers the potential for a deal of some sort if future studies justify the project’s development; this could help limit the capital required to bring the project into production.
The company plans to commence a drill programme shortly that will include twinning of historical holes to confirm the data and allow it to be used to calculate a resource on the deposit, which the company aims to complete by the end of the year. There are also some underground workings at the mine that are accessed by two portals. The company plans to de-water the bottom of the pit and the underground workings to enable underground mapping and drilling to take place.
We understand that the data that the company has accessed also includes drill information on other deposits on its exploration areas and we expect the release of further information in due course.
In addition to exploration work in Oman, having entered a JV with Rio on its minerals sands in Mozambique in June 2015, the company is working towards the completion of a resource statement there and the completion of a scoping study by the end of the year. We reiterate our Speculative Buy rating on the company.
OIL & GAS EQUITIES
ANTRIM ENERGY*† — Kosmos (NYSE:KOS) Withdraws from FEL 1/13, Offshore Ireland — Antrim Energy (LON:AEY, CVE:AEN) has announced that it has received notice from Kosmos that it intends to withdraw from Frontier Exploration Licence (FEL) 1/13 (currently Kosmos: 75%, Antrim: 25%) in the Porcupine Basin, offshore Ireland’s west coast.
Kosmos had previously acquired a 75% interest and operatorship in FEL 1/13 in 2013 in exchange for carrying the full costs of the 3D seismic programme and re-imbursement to Antrim of a portion of the past exploration costs incurred on the blocks. The initial three-year term of the FEL expires in early July 2016 and has to date involved the acquisition of 3D seismic over the FEL area, followed by seismic processing, interpretation and geological studies. Antrim will work with Kosmos to review in greater detail the work completed by the operator as well as with the Department of Communications, Energy and Natural Resources (DCENR) to determine how best to move FEL 1/13 forward. Results from the acquired 3D seismic reinforced Antrim’s interpretation based on 2D seismic and strongly indicated the presence of Lower Cretaceous slope fan and channel deposits similar in geometry and seismic character to many of the recent Cretaceous oil discoveries offshore West Africa.
Antrim had previously announced that an aggregate summary of unrisked gross best estimate prospective resources for the 17 independent leads evaluated within the FEL 1/13 were 260MMbbl of oil, 4.7Tcf of gas and 87MMbbl of condensate. Antrim owns 25% of this licence. The two largest leads (‘C’ and ‘M-3’) represent 42.7% of the total unrisked property best estimate prospective boe resources. They are estimated to have unrisked gross best estimate prospective resources of 126MMbbl oil, 1.9Tcf gas and 35MMbbl condensate. These prospective resources were evaluated by McDaniel & Associates Consultants Ltd in accordance with National Instrument 51-101 in a report dated 30 June 2014.
RFC Ambrian Comment: The withdrawal of Kosmos from FEL 1/13 is disappointing. Given the current oil price environment, this is likely to be because Kosmos wants to focus its exploration efforts on the Mauritania, Senegal, Guinea-Bissau (MSGB) basins, where it has a large footprint and had the recent large (~12Tcf) Tortue gas discovery. We believe that getting another partner to farm in to FEL 1/3 to carry Antrim’s cost on a well by next July is likely to be challenging unless the oil price makes a rapid recovery back towards US$100/bbl. Although, in view of the current oil price and that Antrim’s efforts have led to the acquisition and processing of 3D seismic, an extension of the licence is possible.