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Press release from CNW Group

Uranium One Announces 42% Increase in Measured and Indicated Resources at Mkuju River Project

Thursday, November 03, 2011

Uranium One Announces 42% Increase in Measured and Indicated Resources at Mkuju River Project16:39 EDT Thursday, November 03, 2011TORONTO AND JOHANNESBURG, South Africa, Nov. 3, 2011 /CNW/ - Uranium One Inc. ("Uranium One" or the "Company") today announced an updated mineral resource estimate for the Mkuju River Project in Tanzania.  The updated resource model will form the basis for the definitive feasibility study being prepared on the Mkuju River Project, which is expected to be completed by the end of Q1 2012.Highlights:39% increase in Measured Resources to 55.3 million pounds U3O848% increase in Indicated Resources to 38.0 million pounds U3O8Inferred Resources of 26.1 million pounds U3O887% or 81.2 million pounds U3O8 of the Measured and Indicated resources is within 60 metres of surface (91% of Measured Resources and 82% of Indicated Resources)Mkuju River Project Mineral Resource Estimateas at September 27, 2011 Tonnage(million tonnes)Grade(U3O8 ppm)Contained U3O8(million pounds)Measured Resource80.331355.3Indicated Resource59.329138.0Total Measured & Indicated139.630393.3Inferred Resource42.527826.1Notes: Reported at a cut-off grade of 100 ppm U3O8.  All figures are rounded to reflect appropriate levels of confidence. Apparent differences may occur due to rounding. The resource estimate has been prepared by independent consultants CSA Global Pty Ltd ('CSA') under the supervision of Qualified Person Mr. Malcolm Titley and is reported in accordance with the Canadian National Instrument 43-101.Resource EstimateCSA Global Pty Ltd. ("CSA") has provided the Company with an updated NI 43-101 compliant mineral resource estimate as at September 27, 2011 for the Mkuju River Project.  The updated mineral resource estimate incorporates a cut-off grade of 100 ppm U3O8, additional drilling data and the use of Uniform Conditioning  grade estimation methodology.Compared to the mineral resource estimate previously announced by Mantra Resources Ltd. ("Mantra") in November 2010 (which used a cut-off grade of 200 ppm U3O8), the updated mineral resource estimate shows a 39% increase in the Measured Resource category to 55.3 million pounds and a 48% increase in the Indicated Resource category.The updated mineral resource estimate also shows a reduction in Inferred Resources of 9.8 million pounds U3O8 primarily resulting from the conversion of Inferred Resources into Indicated and Measured Resources.Additional details of the updated mineral resource estimate can be found in Appendix "A".Mantra Resources As previously announced, Uranium One's 51% majority shareholder, JSC Atomredmetzoloto ("ARMZ"), acquired Mantra on June 7, 2011 and Uranium One is the operator of Mantra's Mkuju River Project pursuant to an operating agreement entered into with ARMZ.  Additionally, Uranium One has a call option to acquire Mantra from ARMZ for consideration equal to ARMZ's cost plus certain additional expenditures, exercisable until June 7, 2012.  ARMZ also has a put option to sell Mantra to Uranium One for the same consideration on June 7, 2012.  The call option and put option may be extended to June 7, 2013 if Uranium One partially exercises its option and acquires approximately 15% of Mantra for US$150 million before January 31, 2012.  The option to acquire the remaining 85% interest in Mantra (or 100% if the option is not partially exercised) will be subject to Uranium One minority shareholder approval.About Uranium OneUranium One is one of the world's largest publicly traded uranium producers with a globally diversified portfolio of assets located in Kazakhstan, the United States and Australia.Cautionary StatementNo stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.Scientific and technical information contained herein has been reviewed on behalf of the Corporation by Mr. M.H.G. Heyns, Pr.Sci.Nat. (SACNASP), MSAIMM, MGSSA, Senior Vice President New Business and Technical Services of the Corporation, a qualified person for the purposes of NI 43-101.The information contained herein regarding the estimation of Mineral Resources was prepared  by Mr. Malcolm Titley of CSA Global Pty. Ltd. Mr. Titley is a Member of the Australian Institute of Geoscientists and has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity he is undertaking, to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code) and is a "Qualified Person" under National Instrument 43-101 - 'Standards of Disclosure for Mineral Projects'. Mr. Titley has verified the data disclosed in this release, including sampling, analytical and test data underlying the information contained in this release. Forward-looking statements: This press release contains certain forward-looking statements. Forward-looking statements include but are not limited to those with respect to the price of uranium, the estimation of mineral resources and reserves, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, currency fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage and the timing and possible outcome of pending litigation. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes" or variations of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Uranium One to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the completion of the transactions described in this press release, the future steady state production and cash costs of Uranium One, the actual results of current exploration activities, conclusions of economic evaluations, changes in project parameters as plans continue to be refined, possible variations in grade and ore densities or recovery rates, failure of plant, equipment or processes to operate as anticipated, accidents, labour disputes or other risks of the mining industry, delays in obtaining government approvals or financing or in completion of development or construction activities, risks relating to the integration of acquisitions and the realization of synergies relating thereto, to international operations, to prices of uranium as well as those factors referred to in the section entitled "Risk Factors" in Uranium One's Annual Information Form for the year ended December 31, 2010 and Management Information Circular dated August 3, 2010, each of which is available on SEDAR at www.sedar.com, and which should be reviewed in conjunction with this document. Although Uranium One has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.Accordingly, readers should not place undue reliance on forward-looking statements. Uranium One expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws.For further information about Uranium One, please visit www.uranium1.com.Appendix AMkuju River Project Mineral Resource EstimateCSA Global Pty Ltd. ("CSA") has provided the Company with an updated Canadian National Instrument 43-101 ("NI 43-101") compliant mineral resource estimate as at September 27, 2011 (the "Updated Resource Estimate") for the Mkuju River Project.  Resource modelling for the Nyota Prospect located within the Mkuju River Project has been updated for the entire resource area using additional drilling data, Uniform Conditioning ("UC") grade estimation and a cut-off grade of 100 ppm U3O8 to produce a mineral resource estimate.Uranium mineralisation is hosted within sub-horizontal sandstone units deposited within a braided stream system. The stream channel facies sediments are considered better conduits for mineralisation compared to the overbank facies, with interbedded claystone horizons and local normal faulting playing a role in the distribution of mineralisation. The channel and overbank facies can generally be differentiated through grain size distribution modelling, with the channels being dominated by coarser sediments. Surface geological mapping combined with drill hole logging and down-hole geophysical conductivity data was used to define faults, boundaries of the sedimentary facies cycles and claystone horizons. These fining-upwards sequences bounded by clay horizons are termed cycles. The average dip of cycles ranges between 2 and 3 degrees towards the north and north-northeast, and in some cases towards the east.Quality assurance and quality control information for all assay and geophysical data was reviewed by CSA and showed acceptable levels of precision and accuracy. Results comparing pairs of samples using chemical assay and geophysical results were analysed within the mineralised composites and showed a good comparison with assay data below 20 metres. In the upper 20 metres, there is an indication of potential negative disequilibrium, which has been taken into account in the Updated Resource Estimate.All drilling and trench data was composited to 1 metre down hole intervals. Geostatistical analysis was completed for all areas, which were subsequently grouped into zones defined by common geostatistical parameters.Grade estimation was carried out using Ordinary Kriging and UC. The UC estimates were corroborated using Multiple Indicator Kriging ("MIK") completed by Hellman and Schofield. The sedimentary cycle horizons were used as an aid in determining zone boundaries and the directions of mineralisation continuity. The cycle horizons were not used to constrain the mineralisation. Variography was completed on zones where there was sufficient data density; where data was insufficient, parameters from nearby deposits were used.Grade was estimated in a grid (panel) of 50 metres x 50 metres x 4 metres ("X x Y x Z"), with a recoverable Mineral Resource Estimate reported for a selective mining unit ("SMU") of 10 metres x 10 metres x 4 metres. A local uniform conditioning ("LUC") technique was used to convert the panel blocks to SMU size blocks for use in subsequent mine planning.The cut-off grade of 100 ppm U3O8 was selected in light of the proposed addition of heap leach processing to the resin in pulp process currently contemplated in the definitive feasibility study ("DFS") being prepared.Three estimation passes were completed based on the ranges derived from Gaussian transformed U3O8 variography. The orientation of the search ellipses were aligned to the major direction of mineralisation continuity for each zone. All potential mineralisation that fell outside the search parameters was ignored and assumed to be waste.Grades within 20 metres of surface were reduced by 30 ppm U3O8 to allow for near surface negative disequilibrium observed at the MRP. This is an increase from 10 metres used in the mineral resource estimate previously announced by Mantra Resources in November 2010 due to additional data obtained from the diamond drilling and chemical assay program.Grade estimate validation confirmed that the block model reflects the tenor of input grades, and can be considered reliable on a local scale in the Measured and Indicated areas, and reliable on a global scale in the Inferred areas.The Updated Resource Estimate has been classified as Measured, Indicated and Inferred, based on the guidelines specified in the JORC Code (2004 Edition) and Canadian National Instrument 43-101 ("NI 43-101").CSA has considered the following in determining the classification of the Updated Resource Estimate:Adequate validation of tenement title, drilling, sampling and geological process completed during a number of site visits by Mr Malcolm Titley, Principal Consultant, CSA Global (UK) Ltd, from April 2008 to August 2010Adequate geological evidence for continuity of mineralisation at the cut-off grade used in the estimation of the mineral resourceAdequate analytical evidence of U3O8 mineralisation through the use of multiple methods of U3O8 measurementAdequate diamond core sampling to validate geophysical assay results and provide metallurgical samples to confirm the viability of U3O8 processing and recovery methodsAdequate QA/QC controls in place to validate the U3O8 gradesAdequate diamond core sampling to determine the dry in situ bulk density in order to estimate the tonnage of mineralisationResource classification based on the estimation search parameters and the OK slope of regression, with material classified as Measured where the average sample spacing ≤ 60 metres and slope ≥ 0.85, Indicated where average spacing is ≤ 120 metres and slope ≥ 0.7 and the remainder InferredUse of a lower grade cut-off of 100 ppm for the Updated Resource Estimate (compared to 200 ppm previously) resulting in an increase in the Measured and Indicated resource, due primarily to increased grade continuity at the lower grade cut-offNear surface mineralisation, suitable U3O8 grade and known economic extraction methods at the 100 ppm cut-off ensure this resource has reasonable prospects for economic extraction For further information: Chris Sattler Chief Executive Officer Tel: +1 647 788 8500 Anton Jivov Manager, Corporate Development and Investor Relations Tel: +1 647 788 8461