Uranium Exploration: the SRK Exploration Perspective
Since 2005 SRK Exploration Services (SRKES) has been a global player in project origination, appraisal and management for uranium exploration. The team has worked on 10 of the 12 major deposit classes and was one of the pioneers at resurrecting interest in the exploration of Saharan Africa. Back in 2005, in a bid to re-evaluate prospects in the context of modern methods and a burgeoning new market, the team visited the Ministries of Mines in Niger and in Mali, and dusted off historic reports detailing the work that had been done in the 1970s by the Japanese and French. SRKES ran a number of reconnaissance missions and identified a small surface resource in northern Mali on behalf of a client.
Northeast Mali represents a near mirror image of the geological situation of the famous Arlit uranium deposits of northern Niger. The French company, AREVA, is actively mining through its interests in the Arlit open pit and Akouta underground mine. In 2007, production in Niger had a total output of 3,720 tonnes or 8.2 million pounds of U3O8. Here, the sandstone-hosted uranium resources are all contained in the sediments of the Tim Mersoi basin, which lies on the western flank of the igneous complex constituting the Air Massif. In Mali, the intrusive and volcanic centre is that of the Adrar des Iforas, and the potential host rocks are the sandstones, conglomerates and phosphate deposits of the Tilemsi Basin.
Elsewhere in Africa, SRKES implemented and managed two successful uranium drilling projects in Cameroon and Madagascar. While one project has been sold to a major, the other is ongoing and continues to provide exciting results.
In South America, SRKES set up and managed a large ground survey exploration program in Colombia, a project with also caught the eye of a uranium major.
In Central Asia, the company has been active in the due diligence of 8 concessions in the CIS, including sites adjacent to the historic Marly Su mines of Kyrgyzstan (where the British allegedly mined uranium in the 1940s), and in evaluating the potential of the former underground mines of northern Kazakhstan.
More recently, SRKES has been involved in evaluating the exploration and mining sector on behalf of financial institutions and fund managers interested in taking advantage of the potential undervaluation of many players, which has resulted from the current economic slowdown and uncertainty.
One such study, a comparable transaction analysis of uranium properties, looked at some 140 transactions that occurred over the period 2007-08 when projects changed hands for sums up to half a billion dollars. This flurry of activity was spurred on by the uranium pricing peak of July 2007, when U3O8 spot prices hit US$136/lb. This level was, in fact, the highest the yellow commodity has achieved, the last great spike in pricing occurred at the end of the 1970s when prices reached US$43/lb. Adjusting for inflation, this was equivalent to almost US$115/lb in terms of 2007 dollars.
Whilst much of the speculative action and ‘re-flogging of dead horses’ that occurred during the price build-up and over the price spike have died away, there is still a strong core of investors following the commodity. The current, relatively-low spot price has little bearing on miners or near-term producers, who will have secure future sales and price contracts with their electricity-generating customers. The longer-term exploration outlook is good, with a projected shortfall in production versus demand, against a backdrop of 44 nuclear power stations currently under construction and over 370 planned or proposed globally.
Nick O’Reilly: noreilly@srkexploration.com
Northeast Mali represents a near mirror image of the geological situation of the famous Arlit uranium deposits of northern Niger. The French company, AREVA, is actively mining through its interests in the Arlit open pit and Akouta underground mine. In 2007, production in Niger had a total output of 3,720 tonnes or 8.2 million pounds of U3O8. Here, the sandstone-hosted uranium resources are all contained in the sediments of the Tim Mersoi basin, which lies on the western flank of the igneous complex constituting the Air Massif. In Mali, the intrusive and volcanic centre is that of the Adrar des Iforas, and the potential host rocks are the sandstones, conglomerates and phosphate deposits of the Tilemsi Basin.
Elsewhere in Africa, SRKES implemented and managed two successful uranium drilling projects in Cameroon and Madagascar. While one project has been sold to a major, the other is ongoing and continues to provide exciting results.
In South America, SRKES set up and managed a large ground survey exploration program in Colombia, a project with also caught the eye of a uranium major.
In Central Asia, the company has been active in the due diligence of 8 concessions in the CIS, including sites adjacent to the historic Marly Su mines of Kyrgyzstan (where the British allegedly mined uranium in the 1940s), and in evaluating the potential of the former underground mines of northern Kazakhstan.
More recently, SRKES has been involved in evaluating the exploration and mining sector on behalf of financial institutions and fund managers interested in taking advantage of the potential undervaluation of many players, which has resulted from the current economic slowdown and uncertainty.
One such study, a comparable transaction analysis of uranium properties, looked at some 140 transactions that occurred over the period 2007-08 when projects changed hands for sums up to half a billion dollars. This flurry of activity was spurred on by the uranium pricing peak of July 2007, when U3O8 spot prices hit US$136/lb. This level was, in fact, the highest the yellow commodity has achieved, the last great spike in pricing occurred at the end of the 1970s when prices reached US$43/lb. Adjusting for inflation, this was equivalent to almost US$115/lb in terms of 2007 dollars.
Whilst much of the speculative action and ‘re-flogging of dead horses’ that occurred during the price build-up and over the price spike have died away, there is still a strong core of investors following the commodity. The current, relatively-low spot price has little bearing on miners or near-term producers, who will have secure future sales and price contracts with their electricity-generating customers. The longer-term exploration outlook is good, with a projected shortfall in production versus demand, against a backdrop of 44 nuclear power stations currently under construction and over 370 planned or proposed globally.
Nick O’Reilly: noreilly@srkexploration.com
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