Arizona breccia pipe uranium mineralization

ARIZONA BRECCIA PIPE URANIUM DEPOSITS

During the late 1970s and throughout the 1980s, the Mohave and Coconino County, Arizona, lands immediately north and south of the Grand Canyon and west of the Navajo Indian Reservation were site for the previous US-based uranium exploration and mining boom. This area includes the region bordering southern Utah that is commonly referred to as the “Arizona Strip”.

Reason for this residual uranium exploration and uranium mining activity in the US, during a period of then gradually waning yellowcake price, was the high grade and very compact nature of the uranium mineralization contained in some of the collapse breccia pipes located in the region. In 1982, total production cost for breccia pipe uranium was reportedly about $10/lb U308 [1] concentrate that then sold for approximately $40/lb. Average ore reserves for an individual mineralized pipe at that time were determined to be about 3,500,000 pounds U3O8, with an average grade of about 0.6 percent U308, [2] then giving the average economically mineralized pipe an approximate before-tax, undiscounted in-ground value of about $105,000,000 (more than $225,000,000 in 2007 US dollars).

Largely because of their relatively high ore grade and compactness, Arizona collapse breccia pipes are anticipated to be, according to the United States Geological Survey, “…the major source of future uranium production within the United States." [3] Directly economic considerations aside, the surface impact of collapse breccia pipe uranium mining has historically been remarkably small because of the high-grade, compact nature of the mineralization and employment of underground waste rock back-fill procedures during breccia pipe mine development work. See Figures 6 through 9 of http://www.libertystaruranium.com/sub.asp?sub_id=36&section_id=8 for photographs of reclaimed breccia pipe uranium mine sites. [4]

Collapse breccia pipes are vertically cylindrical bodies of broken sedimentary rock (the breccia), rock down-dropped into deeper caverns formed in underlying massive limestone. See http://pubs.usgs.gov/bul/b2004/html/bull2004breccia_pipe_uranium_deposits.htm for an illustration of the morphology of a mineralized breccia pipe. Uraninite, a reduced uranium ore mineral, accumulated within the permeable column of broken rock, in essence forming a cylindrical and vertical (and stationary) rather than tabular and sub-horizontal (and migrating) uranium roll front deposit. Apparent mineralizing fluid flow direction was upward. As in roll front deposits, disseminated and massive sulfides are found on the downstream side of breccia pipe uranium accumulations; i.e., above the breccia pipe uranium ore.

The earliest breccia pipe to be mined for uranium was the Orphan, a mineralized pipe exposed on the southern wall of the Grand Canyon within the Grand Canyon National Park. During the late 70s, Energy Fuels Nuclear, Inc. (founder Bob Adams and successor Oren Benton) began a concerted effort to locate and then mine further examples of this previously neglected class of uranium deposit. With the exploration success of Energy Fuels and the ensuing development of the early Hack 1 and 2, Pigeon, and Kanab North mines, competing exploration and mining companies soon entered the northern Arizona region. At one time or another during the 1970s and 1980s, relatively large companies such as Gulf Resources, Pathfinder Mines Corporation, Rocky Mountain Energy Company, and Uranerz all competed with Energy Fuels Nuclear, Inc., for mineral rights in the predominantly public lands of the Arizona Strip. By 1989, at least 13 uranium-ore-bearing breccia pipes had been identified by the various companies. Nearly all northern Arizona uranium exploration had stopped by that year, however, due to the low world uranium price. [5]

Each of the ore-bearing breccia pipes put into mine production during the 1980s was developed by Energy Fuels, which shipped its mined ore northeast to its White Mesa Mill in Blanding, Utah. According to the United States Geological Survey, Energy Fuels Nuclear, Inc., produced in excess of 19 million pounds of U3O8 from seven mines through the 1980s.

With the current increase in price and demand for nuclear reactor fuel (http://www.uxc.com), the Arizona Strip is again the site of very active uranium mineral exploration. The former Energy Fuels Nuclear White Mesa Mill in Blanding, Utah, is now owned and operated by the vertically-integrated Denison Mines Corporation (http://www.denisonmines.com). Besides operating the mill built by Energy Fuels Nuclear, Inc., Denison is in the process of re-opening four of the breccia pipe underground mines previously discovered and developed by Energy Fuels. More than 500 different breccia pipe targets in the Arizona Strip area are actively being explored by at least 11 different private and public mineral exploration companies (May 20, 2007, data):

• DIR Exploration, Inc. (http://www.dirxploration.com): a private US company in a private company joint venture; total breccia pipe target number is currently confidential)

• Energy Fuels, Inc. (http://www.energyfuels.com: 25 targets)

• Energy Metals Corporation (http://www.energymetalscorp.com: 11 targets)

• Liberty Star Uranium and Metals Corporation (http://www.libertystaruranium.com: 343 targets)

• Quaterra Resources, Inc. (http://www.quaterraresources.com: 15 targets)

• Quincy Energy Company (http://www.quincyenergy.com: website being updated, no data available at present)

• SXR Uranium One, Inc. (http://www.uranium1.com: company has just entered the area, no published breccia pipe target numbers as of 5/20/07)

• Tournigan Gold Corporation (http://www.tournigan.com: 83 targets)

• US Energy Corporation (http://www.usnrg.com: 27 targets in joint venture with Uranium Power Corporation -- http://www.uraniumpowercorp.com)

• VANE Mineral Resources, Inc. (http://www.vaneminerals.com: 29 targets)

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Endnotes and References

[1] I.W. Mathisen, VP of Exploration, Energy Fuels Nuclear, Inc. ("EFN"), 1982 oral communication to EFN Flagstaff exploration office staff. Later inflation-corrected cost data published by EFN in the Canyon Mine Environmental Impact Statement confirms this 1982 total cost quotation. In 2007 US dollar terms, the total cost to produce a pound of U3O8 from the average pipe was about $24.

[2] http://pubs.usgs.gov/bul/b2004/html/bull2004model_for_solutioncollapse_brecc.htm. The breccia pipe mineral deposits range from 1000 to 1800 feet deep and have a vertical extent of up to 600 feet. The pipes typically have a 200 to 400 foot diameter. A 1000 to 1600 foot deep shaft is usually required to access the deposits. In some cases where a mineralized pipe occurs near a deep canyon, a decline can be used instead of a shaft to access the ore during mining development of a breccia pipe uranium ore body.

[3] http://pubs.usgs.gov/bul/b2004/html/bull2004breccia_pipe_uranium_deposits.htm

[4] The same reference written by Dr. Karen Wenrich states, “Although these uranium grades are dwarfed by those of the Athabasca Basin unconformity deposits in Canada, it is significant that (1) the breccia pipe mining costs are significantly less for the Arizona deposits, and (2) these ore grades of 0.4-1% are as high or higher than any other global uranium-deposit type.”

[5]http://www.azgs.az.gov/Summer2001.htm