Hidden Bay 
Introduction
The 57,000 hectare Hidden Bay property is in the heart of the prolific Wollaston Lake uranium district of the eastern Athabasca basin. Deposits within 15 kilometres of the property collectively have resources and production of more than 317 million pounds of U3O8. Since the Rabbit Lake discovery in 1968, numerous exploration prospects and two drill defined deposits been located on the property by previous operators, including Gulf Minerals and Cameco. Although the property has a long exploration history, follow-up of many prospects has not been completed, since exploration over the last 20 years has been focused on the delineation of orebodies on the adjacent Rabbit Lake property. Excellent infrastructure is developed that includes Highway 905, a network of mine service roads, and several nearby airstrips. The Rabbit Lake and Jeb mills, located on adjacent properties, are fully functional uranium ore processing mills operated by Cameco and AREVA Resources Canada Inc. (formerly COGEMA Resources Inc.)
Geological setting
The Hidden Bay property is underlain by up to 150 metres of flat-lying Proterozoic sandstone of the Athabasca Group, which unconformably overlies metasedimentary basement rocks and granitic intrusions of the Wollaston and Mudjatic domains of the trans-Hudson orogen. Several deformational events associated with northeast-trending folds, and amphibolite grade metamorphism associated with the 1820-1770 Ma Hudsonian orogeny are evident in basement rocks. Northeast-trending graphitic faults are localized along graphitic gneiss units throughout the area. These record both pre- and post-Athabasca reverse displacement, and often control the distribution of uranium mineralization.
Uranium mineralization
Mineralization in the district is of the unconformity uranium deposit type, which occurs at or near the sub-Athabasca unconformity. It comprises pitchblende pods, disseminations and veins in hematite-clay-chlorite alteration and breccia. Deposits are associated with chemically reactive basement rocks such as graphitic gneiss, and with hematitic redox reaction fronts and permeable sites along reverse faults. Types include:
- Cigar-shaped deposits with Ni-As-Co-Cu assemblages straddling the unconformity along faults in graphitic gneiss (Collins Bay zones, West Bear, Sue A).
- Basement hosted veins and replacements associated with faults that may extend to depths of >400 m below the unconformity (Eagle Point, Sue C, Raven-Horseshoe).
- Basement-hosted deposits in brecciated calc-silicate units in the hangingwall of faults (e.g. Rabbit Lake).
Prospects of all types are present on the property.
Drill defined deposits on the Hidden Bay property
The Hidden Bay property is host to two deposits with drill-defined resources, West Bear and Raven-Horseshoe. At West Bear, UEX's 2005 sonic drilling program, which allowed better recovery of the mineralized zones, led to the calculation of a National Instrument 43-101 compliant indicated resource estimate of 45,600 tonnes containing 1.385 million pounds U3O8 at an average grade of 1.391% U3O8 (see the 2005 West Bear resource estimate report at www.sedar.com).
At the Raven-Horseshoe Deposit, Gulf Minerals ("Gulf") calculated a resource in 1980 using parameters utilized by the low grade, open pit Rabbit Lake deposit operation, including a cutoff grade of 0.03% U3O8 and low specific gravity. No statistical analysis of grade distribution was performed at the Raven-Horseshoe Deposit by Gulf. Reviews of historical data indicate that the bulk of the contained U3O8 in the resources is within higher-grade, lower-tonnage portions of the deposits that have comparable grades to recently producing deposits in the district, and that excellent potential exists to expand the resource base.
Drill defined resources on the Hidden Bay property. Cut- off grade is 0.03% for Raven-Horseshoe figures. [Note: The historical resource estimate below for Raven-Horseshoe was not estimated using current Canadian Institute of Mining, Metallurgy and Petroleum categories, and no current resource or reserve confidence categories were applied.]
| Deposit |
Tonnes |
Grade
U3O8 |
Contained
U3O8, mil-
lions of lbs |
|
Raven- Horseshoe
Raven zone |
3,063,000 |
0.14% |
9.62 |
| Horseshoe zone |
3,617,787 |
0.17% |
13.20 |
| West Bear |
45,600 |
1.385% |
1.391 |
Raven-Horseshoe Deposits
The Raven-Horseshoe Deposits, comprising two linked, shallow plunging zones over a 2.5 kilometre strike length, are hosted by quartzite and graphitic biotite gneiss of the Hidden Bay Assemblage. Mineralization occurs in sinuous hematitic redox fronts surrounding zones of southeast-dipping clay alteration zones that surround by faults. The deposit occurs at depths of 50-450 metres below surface.
The Raven-Horseshoe Deposits contains areas of significantly higher grade than the historical resource estimates. These include historical intersections of 16 metres grading 0.8% U3O8 and 10.36 metres of 0.47% U3O8 in the Horseshoe Deposit on the footwall margin of a clay alteration zone. Higher grade historical intersections in the Raven Deposit include 3.6% U3O8 over 2.28 m in hole LB-009, 1.89% U3O8 over 2.43 metres in hole LB-080, and 0.6% U3O8 over 11.28 metres in hole LB-040. The historical drill spacing, designed by Gulf Minerals to test for a bulk tonnage, low-grade resource, is at 60 metres, too wide to evaluate the size of these and other higher grade areas. Potential exists to define multiple zones of higher grade (>0.5% U3O8) mineralization within the large, low-grade historical resource. For example, in 2006 UEX discovered high-grade mineralization in hole HU-16 at the Horseshoe Deposit, grading 4.53% U3O8 over 12.35 metres, which is the highest grade intersection ever encountered at the Horseshoe Deposit. Exploration in 2007 will evaluate and further delineate these highly-prospective areas by geological modeling and diamond drilling with four drills, as well as to potentially expand the resource by testing open areas of alteration, and parallel trends that extend beyond the limits of previous drilling.
Raven-Horseshoe Drill Hole Plan Map
Section 4515N |
Section 4570N |
Section 4593N |
Section 4640N |
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Section 4724N |
Section 4682N |
Section 4700N |
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West Bear deposit
The West Bear deposit is a classic unconformity-type uranium deposit that forms a cigar-like, linear elongate mineralized zone developed at the sub-Athabasca unconformity. It has been traced for 540 metres long along strike, forming a 10-50 metres wide and 1.5-20 metres thick zone of sooty to massive pitchblende mineralization in intense clay alteration that straddles the unconformity above a faulted graphitic gneiss unit. The deposit has very little cover and occurs at depths of only 15-25 metres below surface. The high grade core of the deposit is developed over a strike length of 250 metres between sections 132+00E and 139+00E, containing the bulk of the contained U3O8 at grades typically between 0.5 and 3% U3O8, and locally >5% U3O8. There is potential to upgrade this resource with reduction of overall tonnage but preservation of the bulk of the contained U3O8 with use of a higher cutoff grade. Confirmatory sonic drilling of the deposit began on a test basis in 2004. In 2005, UEX completed a 101-hole, 2,793 metres sonic drilling program in order to provide a National Instrument 43-101 compliant resource estimate for West Bear.
Based on the results of the 2005 sonic drilling program, Roger Lemaitre of Cameco, a Qualified Person as defined by National Instrument 43-101, estimated that West Bear contains an indicated resource of 45,600 metric tonnes averaging 1.385% U3O8, for a total uranium content of 1,391,000 pounds of U3O8, using a geostatistical-block model technique and the GEMCOM software package. The deposit also contains 0.34% nickel, 0.11% cobalt, and 0.50% arsenic. The boundaries of the deposit for Cameco's resource estimate were defined using a cut-off grade of 0.15% U3O8, and a grade/thickness parameter of 0.45 m% U3O8.
This new interim resource estimate represents a three-fold increase in uranium grade and an increase in total pounds of uranium from the historical 1980 Gulf Minerals ("Gulf") resource estimate of 131,000 tonnes at an average grade of 0.44% U3O8, representing 1.26 million pounds of U3O8 [Note: Gulf's historical resource estimate was not calculated using current Canadian Institute of Mining, Metallurgy and Petroleum categories, and no current resource or reserve confidence categories were applied.]
Cameco's 2005 interim resource estimate report notes that only two-thirds of the strike length of the mineralized area included as part of the historical resource outlined by Gulf was tested during the 2005 program. A number of historical Gulf holes indicate that uranium mineralization likely extends to the east up to 150 metres beyond the current boundaries of the deposit. This eastern area has the potential to significantly increase the total pounds of uranium contained in the deposit. A sonic drilling program is planned for the winter of 2007 to seek additional uranium mineralization in the eastern area of the West Bear Deposit.
The 2005 West Bear Resource Estimate Report is available for review at www.sedar.com
Excellent potential also exists to increase the economic viability of the West Bear area through the expansion of the resource base. Alteration and anomalous mineralization at the deposit are open at depth into basement rocks, and along strike in both directions. At the time of the West Bear exploration in the late 1970's, the spatial association between unconformity and basement hosted deposits such as at Eagle Point and Sue was unrecognized, and the exploration model applied was directed to deposits developed at the unconformity, and drill holes seldom penetrated to more than 10 metres below the unconformity. Evidence of basement hosted mineralization is developed at West Bear, including at the Pebble Hill prospect, 0.5 kilometres southwest, where basement fault-hosted mineralization has been intersected in two holes grading 0.8% U3O8 over 1.5 metres in both. In addition, since drilling at West Bear was localized on the known deposit, the potential for further mineralized pods both along strike, and along parallel graphitic units, as is common at other deposits, was not tested, even though limited step out drilling indicates the potential for both. Mineralization of up to 2.14% U3O8 over 2.44 metres has also been obtained on the property 1.6 kilometres to the northwest of West Bear at the North Shore prospect, where no follow up work has been completed since the early 1980's. The shallow depth and high exploration potential of the West Bear area make it a high-priority exploration target, and it has been tested by ground EM surveys to delineate graphitic units and alteration, soil geochemical surveys, and diamond drilling in previous campaigns.
Other exploration targets
Numerous exploration targets on the property have been identified through drilling, and many untested geological and geophysical targets are present. These include:
Telephone South: Faults, alteration and graphitic units that host the currently producing Sue deposits on the McClean Lake property extend southward into the Hidden Bay property. Excellent potential exists to trace mineralization on to the Hidden Bay property, and to identify mineralization on prospective parallel faults and fault steps.
Telephone Fault, Shamus Lake, Rabbit Lake fault, Wolf Claims and Tent-Seal fault: Clay alteration and basement hosted mineralization (locally >0.3% U3O8 over 1 metres) have been intersected in all of these areas within and adjacent to significant faults where drill fences are widely spaced (200-400 metres), and the down dip extent of mineralization is untested.
Vixen Lake: Ni-U bearing till and pitchblende cobbles occur south of the Rabbit Lake fault northeast of Vixen Lake. These may indicate the presence of a deposit along the fault up ice to the northeast, or along parallel faults associated with graphitic conductors to the southeast.
Rhino claims: A large zone of intense Rabbit Lake-style alteration has here been intersected in several holes on two sections spaced 400 metres apart. It is open at depth, and possibly both directions along strike.
Exploration program
The Hidden Bay property is a highly prospective uranium property with numerous exploration targets. Potential exists to upgrade and expand resources at the Raven-Horseshoe and West Bear deposits and to identify further deposits, all of which could be processed through existing nearby uranium processing facilities.
UEX's exploration focus is on the evaluation and expansion of higher grade resources at West Bear and Raven-Horseshoe and testing for associated nearby mineralized zones. Development of drill targets throughout the Hidden Bay property is also a priority for 2007, utilizing leading edge geophysical and geochemical exploration techniques along prospective fault trends.
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