Two Uranium Exploration Companies Slug It Out in Utah's Lisbon Valley, Part Three

By: James Finch
Submitted: 2007-01-17 16:15:37
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Who’s Right: Symmetrical or Asymmetrical Geological Models?

How do they figure they’ll find uranium mineralization, though? “There’s a northwestern-southeastern trending band of mineralization in the Lisbon Valley, primarily on the upthrown side of the fault,” explained Thompson. He noted the northwestern trending channel in the Moss Back is the basis for the ore-banding sand in the Chinle Formation.

Dorman described how these special units were created. “During the deposition of the Moss Back, both sides of the anticline should have been under the same conditions. The strike of the anticline is northwest, and the source of all the material that was transported in the Chinle was obtained from the southeast.” He explained the longitudinal axis of the anticline is southeast to northwest. “That’s where the rivers were coming,” Dorman pointed out. “As the rivers were coming along, they were depositing sandstone along the sides and in the bottom of the valley between the anticlines.”

The anticlines controlled the direction of the deposition. And therein one finds the magic question, which explains why both Mesa and Universal Uranium are aggressively drilling on the eastern side of the Lisbon Valley fault. According to both geologists, both sides of the anticline should have undergone the same type of deposition. “So if there was favorable deposition on the west side, why not on the east side?” asked Dorman.

Thompson is betting that he’s grasped the nature of the deposition, “The exploration model is the arc.” He said it is “symmetrical to what occurs on the west side of the fault.” According to Thompson, Mesa Uranium’s property starts “right at the southern tip of the Lisbon Mine.” Dorman said Universal Uranium’s property claim is about two kilometers away. His closest drill hole, at this time, is about two miles away. It’s hard to say which of the two will be successful. Dorman pointed out, “Due to the type of strata stream system that was there, the stream is bending in ox bows and winding all over the place.”

Both exploration geologists are pretty certain the depth of the uranium deposition is likely to be down to about the 2000 to 2800 level. Because it is an anticline, the elevation above sea level would be between 4100 and 4300 feet. The nearby Rio Algom mine was a bit higher up – 6600 to 6800 feet above sea level.

They both believe they are in the right area. “If you want to find elephants, you go to elephant country,” said Thompson, repeating the exploration geologist clich?. “The northwest tip of Lisbon Valley has been the most prolific if you look at the Homestake Mine, the Rio Algom Mine.” He’s right about that.

The high grades compensate for the deep drilling. “The average grade, I think, for the whole district was somewhere between 0.3 and 0.4,” Dorman noted. “When they threw in the grade of some of the Cutler stuff, it dropped down a bit.” And then, there were the high grades of the Velvet uranium mine, which was discovered in the Cutler Formation, about 150 feet below contact with the Chinle. It produced about six million pounds of U3O8. Thompson was then an ore buyer for Atlas Minerals, “The ore from the Velvet Mine was grading 70/100s (0.70 percent U3O8).” Another pointed out some of the ore grades from Velvet were also between 0.10 and 01.5

According to Thompson, each deep hole, between 2600 and 2800 feet, costs about $50,000. “The Rio Algom mine was 2550 feet,” said Dorman. “It’s expected that will be more or less the depth for the Moss Back on the whole eastern side.” Dorman figures, “For those depths, you’re going to probably need 0.2 percent and up to make a mine out of it.” And how many pounds will suffice to make this economic? “You’re going to need a couple million pounds,” Dorman responded.

James Finch contributes to StockInterview.com and other publications. Visit http://www.stockinterview.com to download your free copy of “Investing in the Great Uranium Bull Market: A Practical Investor’s Guide to Uranium Stocks.” You can always write to James Finch at jfinch@stockinterview.com

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