Resource Star (ASX: RSL) has interests in uranium exploration assets in the Northern Territory, Western Australia and Malawi.
The company's main projects include joint ventures with Globe Metals and Mining on the Livingstonia Uranium Project and Machinga Rare Earths Project in Malawi, the 100%-owned Edith River Uranium Project in the Northern Territory and the Spinifex joint venture with Thundelarra Resources in Western Australia.
Red Rock Resources’ associate Resource Star agrees Livingstonia uranium JV with Globe Metals & Mining
Red Rock Resources’ (AIM: RRR) associate Resource Star (ASX: RSL) has signed a joint venture agreement with Globe Metals & Mining (ASX: GBE), to earn up to 80% interest in the advanced Livingstonia uranium project in Malawi. The AIM listed company also noted that, through two transactions this month, it has increased its shareholding in Resource Star to 26.3%, up from 24.4% when its associate relisted on the ASX in February.
According to Resource Star, Livingstonia is an advanced sandstone-hosted uranium project, which already has a defined mineralisation with potential for conversion into a resource. The company said that Livingstonia’s geological setting is similar to Paladin Energy’s (ASX, TSX: PDN) recently opened Kayelekera mine, which is located 100km to the northwest.
Under the terms of the JV, Resource Star will solely fund the project’s exploration, up to the completion of a feasibility study. Resource Star will earn an initial 20% stake in the project in Phase 1, by completing an immediate Resource Estimate and a follow-up 1,000m drilling program later in 2010. The remaining 60% will be earned through development milestones.
Through Phase 2, Resource Star can earn up to 51% in the project with ongoing assessment of the project, further expenditures of US$3.25m. Phase 3 of the JV agreement enables the company earn further equity in the project through the delineation of the resource, Resource Star will earn 70% once it has completed a JORC resource greater than 10,000 tonnes of contained uranium (U3O8). Finally through Phase 4, the company will earn an additional 10% once the Feasibility Study is costed with greater than 25% accuracy.
The Livingstonia project area was originally targeted based on airborne radiometrics, which were carried out in the nineteen-eighties. Three prospect areas have been defined at Livingstonia consisting of the Chombe prospect and the Chiweta and Bunga anomalies.
To date, Chombe has been the focus of most the work carried out on the project. Resource Star said that the mineralisation is predominantly contained within a relatively permeable sandstone host unit, which lies between less permeable layers.
Since 2006, Globe has drilled 94 holes totalling 11,533m, of which 75% encountered mineralisation, Resource Star said. Multiple horizons were encountered in many holes, with thicker and higher grade trends also recognised.
The best results from Globe’s drilling on the Chombe prospect include 15m at 402 parts per million (ppm) Triuranium octoxide (U3O8) including 9m at 562ppm U3O8, 5m at 576ppm U3O8 including 3m at 836ppm U3O8, 8.1m at 644ppm equivalent U3O8 including 3.1m at 806ppm equivalent U3O8 and 11.7m at 283ppm equivalent U3O8 including 2.2m at 677ppm equivalent U3O8.
Resource Star’s work in producing the resource estimate should help define targets for the 2010 drill program.
