The Cebolleta Project is situated in the Laguna mining district near the southeastern end of the prolific Grants Mineral Belt, which has been the largest source of uranium production in the United States, and is one of the largest concentrations of sandstone-hosted uranium deposits in the world. The project area includes the former L-Bar mill and underground uranium mine of Sohio Western Mining and the former St. Anthony open pit and underground mines of United Nuclear Corporation. The southern boundary of the Company’s lease adjoins the northeastern end of the former Jackpile uranium mine of Anaconda, which was one of the largest uranium mines ever developed and mined in the United States.
Uranium Resources completed a Canadian National Instrument 43-101 Technical Report on Resources for Cebolleta project, defining non-reserve Inferred mineral resources of 5.6 million short tons averaging 0.17% uranium, and containing 18.98 million pounds of uranium at a cut-off grade of 0.08%. This mineral resource estimate does not include any mineralization from the adjoining historic St. Anthony mine area, which has yet to be modeled.
Based on the quantity and quality of the in-place mineralized material, the technical report recommends that the Company advance the Cebolleta Project to a Preliminary Economic Assessment. The Company is evaluating the Technical Report recommendations and expects to make a decision on further development and assessment work in conjunction with the completion of evaluation of the Company’s other key assets in New Mexico.
Uranium Resources through its subsidiary Neutron Energy, acquired in 2007 a lease from the La Merced del Pueblo de Cebolleta (“the Cebolleta Land Grant” or “CLG”) covering approximately 6,700 acres of privately-owned (deeded) mineral rights. Under the terms of the lease our Company has the right to explore for, mine and process uranium and associated minerals from the leased lands. The project area includes the former L-Bar mill and underground uranium mine of Sohio Western Mining and the former St. Anthony open pit and underground mines of United Nuclear Corporation.
The region of the Cebolleta Project has been an area of considerable interest to the U.S. uranium industry since the discovery of the Jackpile and Paguate uranium deposits by Anaconda in the early 1950s. Subsequent to the discovery and initial development of the Jackpile deposit, Climax Uranium developed a mine at the Woodrow Pipe, and followed that with the discovery of the St. Anthony deposit. The St. Anthony was developed and mined between 1953 and 1960 by Climax Uranium. The St. Anthony Mine was then sold to United Nuclear Corporation (UNC). UNC developed two open pits and one underground mine at St. Anthony.
Other historical development within the Cebolleta Project area includes exploration by Sohio Western and Reserve Oil & Minerals, which ultimately led to the advancement of the L-Bar Project immediately north of the St. Anthony Mine. The Sohio/Reserve exploration program resulted in the discovery of several new uranium deposits in the project area and the joint venture developed one of the deposits as a new underground mine and constructed a mill.
The St. Anthony group of mines operated until the late 1970s, and the L-Bar project, which commenced in 1976, shut-down production in 1981. Collectively, the L-Bar operation is credited with production of 1.9 million pounds of U3O8, and the St. Anthony mines produced approximately 1.13 million pounds of U3O8.
Since acquiring the Cebolleta Project in 2007, the Company has conducted geological mapping and geochemical sampling of host rocks in mine exposures in the project area, assembled essentially all of the historical exploration and production data, and carried out an intensive technical study of the geology and mineral resource endowment and distribution of the project.
The Cebolleta Project is located near the eastern end of the prolific Grants Mineral Belt. The uranium deposits at the Cebolleta Project, as well as those at the adjoining Jackpile and Paguate mines, are hosted in the Jackpile sandstone unit of the Jurassic age Morrison Formation.
The Cebolleta uranium deposits are contained within the fluvial sandstones of the Jackpile unit, and are generally flat-lying tabular bodies of mineralization that are from 3 to 20 or more feet in thickness, are several tens to a few hundred feet wide, and many hundreds of feet long. Generally the deposits are positioned above the local water table. The deposits at St. Anthony are shallow, generally about 200 to 300 feet below the surface, while the deposits in the northern part of the project area are up to 800 feet deep.
Environmental and Permitting Status
The Cebolleta Project is situated in an area that was previously the site of open pit and underground mining. The Company holds no environmental liabilities associated with those former operations. Uranium Resources has undertaken comprehensive biological and cultural resource surveys of the project area to facilitate permitting for both exploration and mining activities.
The Company holds an Exploration Permit from the State of New Mexico for development drilling and monitor well construction at Cebolleta, and has filed a Sampling and Analysis Plan as a precursor to any future formal mining permit.