Northern Arizona
Arizona Strip Breccia Pipe District
The breccia pipes occur in the breccia pipe uranium district of northern Arizona located in the region known as the Arizona Strip. It is a relatively new district with a recent history of successful uranium exploration and mining starting in the late 1970s. Uranium-bearing breccia pipes are among the highest-grade uranium deposit type in the U.S. with average grades of around 1% U3O8. They have been known to contain more than 6 million pounds of U3O8 with the average pipe containing 3.4 million pounds of U3O8.
Approximately 23 million pounds of U3O8 were produced from the district until 1995 when production was finally suspended due to the decline of uranium prices that started in the 1980s. A number of discoveries were made during this period resulting in 9 mines. Five of these mines were mined out and the subsequent reclamation set an example of high standards. There is currently an estimated resource of 20 million pounds of U3O8 distributed in several breccia pipes. Production has resumed since the uranium market began its recovery around 2004. There have also been several new discoveries announced since exploration activities resumed in the district.
Breccia pipes occupy relatively small surface areas and in most cases can be covered by one to four 20-acre federal lode claims. For this reason, surface disturbance is minimal with respect to exploration and mining activity, typically about one acre for exploration and 20 acres for mining. VANE is acutely aware of the beauty and importance of the region and therefore all exploration activities are conducted with this in mind. The historic mines in this region that have been mined out, which are 5 in number, have been reclaimed to a state of virtually no visible evidence of the existence of a mine and in some cases it is difficult for an experienced geologist to identify the location of the reclaimed mines. Breccia pipe mines represent a small fraction of mining operations world-wide that are fully reclaimable.
The uranium ore produced from pipes on the Arizona Strip was processed at the White Mesa Mill located in Blanding, Utah. The likely milling location for anticipated VANE breccia pipe ore is the Uranium One Shootaring Mill (Utah), due to the VANE-Uranium One joint venture. However, the White Mesa Mill is a second option where processing of conventional ore from mines in southeastern Utah resumed on the 28th of April 2008.
Northern Arizona Political Developments
On July 21, 2009, the U.S. Secretary of the Department of Interior, Ken Salazar, issued a Segregation Order in response to a proposal to withdraw approximately 1 million acres of federal lands in northern Arizona. This went against legislation passed in a 1984 wilderness bill that specifically designated these lands to remain open for “multiple use” that includes mineral development. VANE has remained optimistic regarding the outcome of the Environmental Impact Statement (“EIS”) that was ordered during the Segregation period to evaluate potential impacts of mining. The Draft EIS (“DEIS”) was released in February 2011, which indicated no significant environmental impact from exploration and mining activities nor did it provide evidence that an environmental emergency existed which is the requirement for the issuance of the Segregation Order. The demonstration of no significant impact is a testament to the uranium industry having successfully and quietly operated for 20 years under the tried-and-tested FLPMA and NEPA environmental policies. Other investigations have revealed a projected economic impact of $29 billion over the life of this uranium project on the U.S. and northern Arizona, where skilled jobs are scarce. However on June 20, 2011, Secretary Salazar, issued an emergency 6-month extension to the Segregation and stated that he plans to recommend the full withdraw of these federal lands for 20 years.
There is strong regional support for uranium development from at least 23 governmental offices and professional organizations. These include the Governors of both Utah and Arizona as well as U.S. Congressman Jeff Flake of Arizona, who has introduced legislation to block Secretary Salazar from withdrawing the lands. This legislation has passed in Committee. VANE is also active with various organizations in an effort to bring the facts on uranium mining and exploration in northern Arizona, which the Directors believe have been misrepresented by various news sources, environmental groups and political officials, to the forefront and to prevent the withdrawal of these lands. However, given the recent developments it is apparent that this issue will likely be decided by political preference.
Click HERE to view a video of a geologist at one of VANE's breccia pipe sites (12Mb)
South Arizona Strip
VANE has an interest in a large number of properties which are held jointly by VANE and Uranium One U.S.A. Inc. (U1) under a 50-50 joint venture agreement (JV) dated September 1, 2008. The Area of Interest of the U1 JV is south of the Colorado River and the Grand Canyon National Park boundary and covers an area of 6,250 mi2. See area map below.
Due to the Segregation Order issued by the Secretary of Interior, Ken Salazar on one million acres of federal lands, the JV has recently generated 126 defined pipe targets on state land, many of which were identified by state-of-the-art airborne VTEM and MegaTEM geophysical data.
The Company’s uranium programme progressed strongly on these state lands in 2011. The surface drilling phase was successfully completed on the Wate deposit and exploration drilling was conducted on 12 other solution-collapse breccia pipe targets. The completion of final surface definition drilling in early 2011 at Wate confirmed a minimum of 1.118M lbs eU3O8 contained in 71,000 tons with an average grade of 0.79% eU3O8 (as reported in the Company’s announcement of 18 May 2011). The project moved to the pre-development phase and preparation of the documents necessary to obtain the Mineral Lease (for exploitation) from the State of Arizona is underway. The Mineral Lease process also includes preliminary permitting efforts pertaining to mining development.
The 12 additional projects drilled in 2011 included drilling on 11 new, previously undrilled targets and the continuation of drilling on the Red Dike breccia pipe to offset the 0.26% eU3O8 mineralization discovered in earlier drilling. Initial exploration drilling on the 11 new targets consisted of shallow drilling which identified subsurface depressions indicating the potential for a pipe on 8 of the 11 targets that will require follow-up deep drilling. At one of these projects, Square Tank, the indication of a subsurface depression of at least 140 feet of collapse is noted in the drilling completed to date. At the V403 “covered target”, which was identified by VTEM geophysics, shallow drilling completed at the location of the geophysical feature indicates a hidden circular depression under the surface alluvial gravels.
An agreement was signed in July 2011 with U1 on the mineralized Rose breccia pipe. Drilling on this project by the JV is underway to follow up the initial drilling completed by previous owners that consisted of three deep holes, each of which cut +1% eU3O8 mineralization. This new drilling by VANE has verified +1% eU3O8 mineralization in two of three holes completed. The Company hopes to complete enough drilling by the close of the 2011 drilling season to confirm an NI 43-101 resource.
A favorable outcome to the withdrawal proposal on federal lands will release another 78 JV drilling targets for exploration.
North Arizona Strip
VANE has an interest in over 360 lode claims in this sector which is outside the U1 JV. These claims cover over 75 pipe targets which have never been tested. The lands are proximal to a number of breccia pipe uranium mines including the Arizona One Mine which Denison Mines is presently mining. However, all of these holdings are within the area of the Segregation and proposed withdrawal which prevents VANE from exploring these targets until the issue is settled. Only known deposits on federal lands are not affected by the withdrawal effort.