Cauldron Energy (ASX:CXU) has applied for a licence to extend its exploration rights on the Bennet Well uranium project in Western Australia after identifying as much as 7.4 additional kilometres of potentially economic mineralisation at the site.
Cauldron pegged the potential strike extension from the southeasterly strike extension of the Bennet Well resource known as the Bennet Well Channel. This was achieved by interpreting its recent drilling in the area along with historic drill results and new geophysics data.
The company has applied for a new exploration licence application to secure the potential strike extension of the entire mineralised portion of Bennet Well Channel.
Bennet Well Channel is a linear zone of mineralisation proximal to the Bennet Well resource extending to the southeast for at least 3.2 km and about 500 m wide.
The Bennet Well deposits holds 36.1 million tonnes of resources at 270 parts per million uranium oxide (U3O8) for a total contained oxide content of 21.5 million pounds.
Exploration on a roll
This effort to expand Bennet Well Channel follows quickly on a drilling campaign that exceeded Cauldron’s maximum target exploration range with exceptional results in thickness and grade.
Rotary drillholes from Bennet Well Channel returned 4.15 metres at 529 parts per million uranium oxide from 88.9 metres, 3.05 metres at 397 ppm U3O8 from 72.4 metres and 1.9 metres at 480 ppm U3O8 from 70.1 metres.
The delivery of extensions to strike length and grade increased the exploration target at Bennet Well Channel five-fold to a range of between 1.6 million tonnes and 8.6 million tonnes mass of mineralisation at 470 ppm U3O8 for a contained uranium oxide content of between 1.6 and 8.9 million pounds.
Further successful drilling in this area –coincident with a high conductive response on the regional airborne electromagnetic data – is believed likely to result in resource growth for the broader project.
Other target areas at the project being followed up by Cauldron include Bennet Well South, where five holes to test a western extension (or possible new channel) to Bennet Well have been planned based on interpreted forks in mineralisation and channel morphology as well as the existence of a new channel to the west.
The Bennet Well Deep South area is targeted for six holes to test potential northern and southern extensions as well as possible additional channel limbs.
Drilling at the Manyingee South Channel area and other regional tests of Cauldron’s exploration model could confirm the company has unlocked the secret of finding low cost, low impact uranium sources in the Yanrey region.
The bigger picture
Mineralisation at Bennet Well is part of the Yanrey project, which comprises a collection of twelve exploration tenements in northwestern WA.
Known deposits in the Yanrey region include Paladin Energy’s (ASX:PDN) Manyingee and Carley Bore properties, which contain 25.8 million pounds and 15.6 million pounds of uranium, respectively.
The area is prospective of sandstone-style uranium mineralisation capable of extraction by in-situ recovery (ISR) mining technique.
WA is emerging as Australia’s next major uranium province, with Cameco (TSX:CCO) recently receiving an environmental clearance for its Kintyre development and Toro Energy’s (ASX:TOE) Wiluna project already approved to be the state’s first uranium mine.
Cauldron is demonstrating that its exploratory predictions are translating into tangible results capable of growing both the Bennet Well resource and shareholder value.
Success in finding additional mineralisation at the project using non-invasive low-cost geophysics may represent an opportunity to bring key intellectual property to the exploration team and an advantage versus other uranium developers.
The potential strike extension demonstrates the upside inherent in Bennet Well, where exploration has already proved successful at expanding the mineralised area and improving grade.
Further proposed drilling at the Bennet Well Channel is likely to increase the project’s current resource of 21.5 million pounds of U3O8.
Bennet well is on a pathway to establish a producing operation by 2020 using the ISR uranium extraction technique, which is roundly considered the most economic and efficient means of uranium production.
Cauldron is in the process of growing Bennet Well’s intrinsic value by expanding the resource and understanding the geochemistry for ISR mining having now predicted the result through a model and currently in the process of proving it.
Bennet Well is predicted to operate at a production price of US$13 per pound of uranium, which would make it economic at the current uranium price range around US$40 per pound.
Cauldron had $1.2 million in cash as of the end of June.
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