Discovery to Recovery: Heathgate Resources' Journey in the Frome Basin
1. Heathgate Resources Pty Ltd
Frome Basin – Beverley North Deposits
Discovery to Recovery
Brett Rava – Geology Manager
Resources Investment Symposium
Broken Hill
May 2015
2. 2
Affiliate of General Atomics (San Diego, California)
– World leader for high-technology research and production for
industry and government in the U.S. and overseas
• nuclear fuel cycle , electromagnetic systems, remotely operated
surveillance aircraft, airborne sensors, and advanced electric,
electronic, wireless and laser technologies.
Heathgate Resources Pty Ltd
– Established in 1990; based in Adelaide
– Operator of the Beverley uranium mine, which commenced
production in 2000
– Owner of the Beverley North uranium mines, commenced
production in late 2010
– Heathgate Resources is a service provider to Quasar
Resources.
Quasar Resources Pty Ltd
– Subsidiary of GA; based in Adelaide
– 75% ownership and manager of the Four Mile Uranium Project
General Atomics Torrey Pines Site
Beverley Uranium Mine
4. Gammon
Ranges
National Park
EL5261
EL5118
EL5119
EL5177
EL5349
EL5328
EL5311
EL5329
EL5017
25km
Heathgate EL
Quasar-Alliance EL
Heathgate ML
Quasar-Alliance ML
Quasar EL
Heathgate Resources & Quasar Resources – Frome Basin tenements
FROME BASIN PROJECT – 100% Heathgate
Total Total Area (km2)
Exploration Licences (EL) ** 7 4,108
Retention Leases (RL) 3 7.5
Mining Leases (ML) 2 178
TOTAL 4,115.5 km2
5
FROME BASIN PROJECT – Quasar-Alliance JV
Total Total Area (km2)
Exploration Licences (EL) ** 1 780
Mining Leases (ML) 1 122.1
TOTAL 780 km2
FROME BASIN PROJECT – 100% Quasar
Total Total Area (km2)
Exploration Licences (EL) 2 1,051
TOTAL 1,051 km2
TOTALS
Total Total Area (km2)
Exploration Licences (EL) ** 10 5,816.9
Mining Leases (ML) 3 300.1
• Active exploration since 2002.
• Sedimentary uranium focussed
exploration programs.
• Exploration investment since 2002
approximately +$150M.
• Total planned exploration budget 2015
(excluding JV) ~$3.47M.
• CSIRO Collaborative Project
• Approximately 36 Mlbs of in-place
resources discovered in 100% HGR
tenements (not all amenable to ISR)
** EL underlies ML
5. 5
• Northern Flinders Ranges – rated one of the 5 most naturally radioactive places in the world
• Surface could contain ~1Mlbs based on airborne radiometric data (within drainage area)
• In the last 5.3Ma (time of last uplift and erosion – Skirrow, 2009) significant amount of uranium
has been mobilised into the basin (Skirrow, 2009 & Quigley et al, 2006)
• In-ground resources discovered to date (not all in-ground resource amenable to ISR)
ü Pepegoona E & W 3.5 Mlbs
ü Pannikan 3.9 Mlbs
ü Beverley 25.9 Mlbs
ü Other ~3 Mlbs(?)
ü Four Mile East (FME) & Four Mile West (FMW) 71 Mlbs* (Indicated & Inferred)
ü FMNE (Four Mile North East) 70-80 Mlbs** (Exploration Target)
Total ~177-187 Mlbs
• Is there more and where is it?
Skirrow, R.G., 2009 (editor) GA Record 2009/40, p110
* Alliance Resources Ltd, Annual Report 2014 ** Alliance Resources Ltd, ASX Announcement 24 February 2015
Airborne Radiometrics
(U channel)
Why are we looking in the Frome Basin?
6. Roll-front in an open cut mine – South Texas
Upper and Lower Limbs
• generally narrow, weakly mineralised, dominated by
daughter products
• Strong –ve DEF
Roll
• strongly mineralised – roll-front ore zone
• strong +ve DEF
Redox Front
• precipitation uraninite or coffinite at redox front/boundary
• moderately to strongly mineralised
• weak –ve DEF
Protore
• weakly mineralised
• +ve DEF
What are we exploring for ?
DEF = Disequilibrium Factor (ratio PFN grade vs. γ grade)
DEF > 1.0; +ve DEF = uranium enriched
DEF < 1.0; -ve DEF = uranium depleted
DEF = 1.0; equilibrium
7. 7
0.5–+5km
Bulldog Shale
Namba Formation
60m
5-6m
3-4m
250m
25-50m
A A’
• Deposits occur at the redox – front and described as similar
in occurrence to a string of pearls
• Roll-fronts are typically thin and often complicated in nature
• Are commonly stacked, with occurrence of multiple sub-rolls
Roll-Fronts in Reality – not that simple
8. 8
• Regional exploration to initially define redox-front
• Great start - extensive drillhole database
• approximately +15,000 holes
• majority within Beverley and Beverley North MLs
• historical drilling
• Majority of historical holes limited to testing of Namba
Formation – an issue when exploring the Eyre
Formation
• HGR-QSR exploration holes drilled to Bulldog Shale
• Redox boundary defined by broad spaced (+1km)
drilling over approximately 110km length within
northern tenements.
• Re-reduction a consideration– looking at
geochemical finger-printing
• Potential for Beverley style palaeochannel
mineralisation still considered high
Where to start ?
9. 9
How hard is it !
PR1108
• June 2009 - Regional drill program
• PR1084 – no mineralisation
intersected, reduced sediments
• All drillholes on section
intersected reduced sediments
• July 2009 – weak mineralisation
intersected at base of Namba
Formation
• PR1108 – 0.8m @ 0.07 eU3O8
PR1084 400m
10. 10
PR1126
• August 2009 - first ore intercept within
Eyre Formation
• PR1126 – 2.8m @ 0.14 pU3O8
Pepegoona
How hard is it !
• June 2009 - Regional drill program
• PR1084 – no mineralisation
intersected, reduced sediments
• All drillholes on section
intersected reduced sediments
• July 2009 – weak mineralisation
intersected at base of Namba
Formation
• PR1108 – 0.8m @ 0.07 eU3O8
400m
11. 11
PR1132
Pepegoona
• September 2009 - first major ore
intercept
• PR1132 – 4.6m @ 0.36 pU3O8
• August 2009 - first ore intercept within
Eyre Formation
• PR1126 – 2.8m @ 0.14 pU3O8
How hard is it !
• June 2009 - Regional drill program
• PR1084 – no mineralisation
intersected, reduced sediments
• All drillholes on section
intersected reduced sediments
• July 2009 – weak mineralisation
intersected at base of Namba
Formation
• PR1108 – 0.8m @ 0.07 eU3O8
400m
12. 12
Pepegoona
• Further drilling defined Pepegoona
Deposit
How hard is it !
• September 2009 - first major ore
intercept
• PR1132 – 4.6m @ 0.36 pU3O8
• August 2009 - first ore intercept within
Eyre Formation
• PR1126 – 2.8m @ 0.14 pU3O8
• June 2009 - Regional drill program
• PR1084 – no mineralisation
intersected, reduced sediments
• All drillholes on section
intersected reduced sediments
• July 2009 – weak mineralisation
intersected at base of Namba
Formation
• PR1108 – 0.8m @ 0.07 eU3O8
400m
13. 13
• February 2010 – restart regional drill
program
• PR1218 – no mineralisation
intersected, reduced sediments
PR1218
Pepegoona
400m
How hard is it...to miss!
14. 14
• February 2010 – restart regional drill
program
• PR1218 – barren
PR1219
• March 2010 – first intercept At
Pannikan
• PR1219 – 6.6m @ 0.24 pU3O8
400m
How hard is it...to miss!
15. 15
• February 2010 – restart regional drill
program
• PR1218 – barren
• March 2010 – first intercept At
Pannikan
• PR1219 – 6.6m @ 0.24 pU3O8
• Pannikan drill out completed by
end March 2010
Pepegoona
MISSED
by <200m
400m
How hard is it...to miss!
Pannikan
16. 16
Pannikan
• Large “classic” roll front or wedge-shaped
“geochemical” cell encompassing nearly the entire
Eyre succession
• Highest grades hosted by carbonaceous sands
• Multiple stacked rolls
Pepegoona West
• Series of relatively competent multiple stacks of roll-
fronts hosted within the Eyre Formation
Pepegoona
• Multiple stacked roll fronts (staggered)
• Hard to predict behavior due to the interference of
abundant reductants (pyrite)
• Complex network of thinner, less competent roll fronts
Pepegoona
Beverley North Deposits
18. 18
Statistical Analysis
• Statistical analysis of drill data is undertaken
on;
• Grade
• Thickness
• GT
• DEF
to determine distribution, trends and
correlations
• statistical analysis enables us to understand
spatial relationships in order to properly use
geostatistical methods
• roll front grade is very positively skewed and
requires log normal kriging or multi-indicator
kriging
PFN reading error
Is this indicative of another grade population?
Is high grade data
missing
or
Is this another
population?
19. 19
Geology Front Mapping – GT Contouring
GT Contouring for Resource Estimation and Wellfield Planning
• Map
• Redox-front
• DEF
• GT values
• Interpreted roll-front characteristic
20. 20
GT Contouring for Resource Estimation and Wellfield Planning
• Map
• Redox-front
• DEF
• GT values
• Interpreted roll-front characteristic
• Contour
• Contour GT values
• Each roll-front must be mapped separately
• Why GT Contouring
• Defines the geometry of the roll-front
• Cumulative GT
• doesn’t take into account the nature of the roll-
fronts (e.g. stacked roll-fronts or sub-rolls)
• represents a 2D grade distribution but no continuity
between roll-fronts especially when roll-fronts are of
varying depth
• will over-estimate resource in early exploration
stages of stacked fronts
Geology Front Mapping – GT Contouring
21. 21
Predictive Flow Modelling for Wellfield Design
Injector Well
Extractor Well
Balance Line
Grade Thickness
Contour
Wellfield Design & Planning
• Wellfields designed to maximise
recovery and lower costs
• Traditional 5 and 7 spot patterns
may work for “blob” interpretation
but not for complex sinuous roll-
fronts
Custom
Pattern
7-Spot Pattern
22. 22
Predictive Flow Modelling for Wellfield Design
Wellfield Design & Planning
• Wellfields designed to maximise
recovery and lower costs
• Traditional 5 and 7 spot patterns
may work for “blob” interpretation
but not for complex sinuous roll-
fronts
Injector Well
Extractor Well
Balance Line
Grade Thickness
Contour
Custom
Pattern
7-Spot Pattern
23. 23
7-Spot Pattern
• 40 wells (7 extractors, 33 injectors)
• 30m well spacing
• Installation cost ~$3.6M
• Under leach ??
Injector Well
Extractor Well
Balance Line
Grade Thickness
Contour
Custom Pattern
• 28 wells (9 extractors, 19 injectors)
• 28 – 34m well spacing
• Installation cost ~$2.52M
• Under leach ??
versus
Modelling Resource Under Leach
Custom
Pattern
7-Spot Pattern
24. 24
Custom
Pattern
7-Spot Pattern
Mineralisation not initially swept is swept
by later role reversals
7-Spot Pattern
• 40 wells (7 extractors, 33 injectors)
• 30m well spacing
• Installation cost * - $3.6M
• Under leach – 1,264,000 lbs
Custom Pattern
• 28 wells (9 extractors, 19 injectors)
• 28 – 34m well spacing
• Installation cost * - $2.52M
• Under leach – 1,323,000 lbs
versus
Injector Well
Extractor Well
Balance Line
Grade Thickness
Contour
Modelling Resource Under Leach
25. Geophysics – Seismic Interpretation, Palaeochannels
25
POONTANAFAULT
POONTANAFAULT
Stratigraphy picked from drilling
WEST
EAST
POONTANAFAULT
NAMBA
Channels
EYRE