UEX Corporation ("UEX") is pleased to update its shareholders on the progress of an environmental baseline study ("EBS") and a final feasibility study (the "Feasibility Study") at its West Bear Uranium Deposit ("West Bear"). West Bear is located within UEX's 100%-owned and operated Hidden Bay Project, in the Wollaston Lake area of northern Saskatchewan, approximately 340 kilometres north of La Ronge, SK.
West Bear Highlights
- Current National Instrument 43-101 ("N.I. 43-101") compliant indicated uranium resource of 46,500 tonnes grading 1.385% U3O8, containing 1,391,000 pounds U3O8;
- High probability of resource expansion from additional sonic drilling, a process that has demonstrated better core recoveries in soft, highly-altered rock such as is found at West Bear;
- Uranium spot price at $52.00 (US) per pound as quoted on September 5, 2006;
- Mineralization occurs near-surface, at 13 to 31 metres (42 to 102 feet) depth;
- Low cost, open pit mining is planned at West Bear - baseline and final feasibility studies are underway;
- Existing infrastructure - 2 milling facilities less than 80 kilometres (50 miles) from the deposit;
- Mining and haulage of material to a milling facility would be tendered out for contract.
2005-2006 West Bear Environmental Baseline Study
An EBS has been underway at West Bear since August 2005. An EBS is a required first step in any mine development plan and forms the basis of an Environmental Impact Statement ("EIS"), as is normally required for the development of uranium mines in Saskatchewan. Golder Associates ("Golder") of Saskatoon, SK, a division of a premier global group of consulting companies specializing in ground engineering and environmental science is carrying out the EBS, and continues to collect biological, hydrogeological and other environmental data in the West Bear area. The budget for the 2005/2006 EBS was approximately $500,000 (CDN) and a summary report is expected to be completed in September 2006. Further baseline studies are anticipated in 2007 following more detailed information on the project design which will be generated from the feasibility study. Following receipt of the final EBS report from Golder, UEX plans to initiate an EIS with the appropriate government agencies, on both provincial and federal levels.
2006 West Bear Feasibility Study
In 2006, after submitting requests for proposals to leading mining engineering firms, UEX awarded the contract for the West Bear Feasibility Study to Golder.
Golder is presently engaged in determining the economic viability of a mining operation at West Bear. The Feasibility Study will examine the most efficient methods and procedures for extracting the defined uranium resource, including the most appropriate road access and support infrastructure, mining methods and operating plans.
Golder is currently carrying out mine, open pit slope, and waste dump design work. As the Feasibility Study progresses, Golder will supervise the tendering of contracts for all aspects of a potential mining operation, and will generate cash flow analyses and projections in order to calculate a net present value and an internal rate of return for West Bear. UEX looks forward to completion of the Feasibility Study, which is expected to be delivered in June 2007, following Golder's receipt and integration of the results from UEX's 2007 winter sonic drilling program.
2007 Winter Exploration Program
In 2006, Cameco Corporation ("Cameco") of Saskatoon, SK, at that time the operator of the Hidden Bay Project, recommended carrying out a 70-hole sonic drilling program totaling 2,100 metres to define the eastern extent of the deposit. Due to unusually warm, winter weather the 2006 drilling program was postponed. A Hidden Bay Project exploration program planned for the winter of 2007 includes a $700,000 (CDN) sonic drilling program at West Bear, and is expected to commence by February 2007.
To view a map of West Bear please access UEX's website at http://www.uex-corporation.com
About West Bear
West Bear is flat-lying and has been defined by drilling over a strike length of 300 metres. The mineralization occurs at a vertical depth of between 13 and 31 metres (or approximately 42 to 102 feet) from surface and is one of the shallowest, undeveloped uranium deposits in the prolific Athabasca Basin. The deposit ranges in width from 5 to 25 metres, and in thickness from 0.1 to 10.5 metres. Approximately 70% of the uranium resource as calculated by Cameco lies within a 100 metre-long section of the deposit. The zones of mineralization have lithology, structure, alteration, and chemical features that closely resemble those at Cameco's Cigar Lake Deposit. Polymetallic mineralization is observed within the uranium mineralization, with higher concentrations of nickel, cobalt, and arsenic concentrated along the east end of the mineralized zone, as defined by the 2005 sonic drilling program.
Historically, core recovery was a significant problem that plagued Gulf Minerals ("Gulf") during its drilling definition programs in 1977, 1978 and 1979. A single diamond drill hole in 2002, and a sonic drilling test of the deposit by UEX in 2004, combined with Cameco's review of the historical Gulf resource estimate suggested that the historical work did not accurately estimate the uranium content of the deposit. Sonic drilling was chosen by UEX as the preferred drilling method at West Bear due to its better core recovery in softer, highly-altered rock. In 2005, UEX's sonic holes were drilled on fences spaced 25 metres apart except over a single 50 metres strike interval where fences were spaced 12.5 metres apart. The spacing of holes along each drill fence was 5 metres.
Based on the results of UEX's 2005 sonic drilling program, Cameco calculated a N.I. 43-101 compliant resource estimate. West Bear is estimated to contain 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 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.
The new West Bear resource estimate represents a three-fold increase in uranium grade and an increase in total pounds of uranium from the historical 1980 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 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.
The technical information in this document regarding Cameco's West Bear resource estimate report was compiled and reviewed by Roger Lemaitre, P. Geo., a qualified person as defined by N.I. 43-101. Cameco's West Bear resource estimate report is available for review at www.sedar.com
About UEX
UEX is a Canadian uranium exploration company formed under an agreement between Pioneer Metals Corporation and Cameco. Cameco, the world's largest supplier of uranium, is UEX's largest shareholder. UEX began trading on the Toronto Stock Exchange in July 2002 and is actively involved in the exploration and development of 19 uranium projects, including seven that are 100% owned and operated by UEX, one joint venture with AREVA that is operated by UEX, ten under option from AREVA and one under option from Japan-Canada Uranium Company, Limited, which are operated by AREVA. The 19 projects, totaling 386,650 hectares (955,400 acres), are located in the eastern, western and northern perimeters of the Athabasca Basin, the world's richest uranium belt, which accounts for approximately 30% of the global primary uranium production. UEX's exploration budget for 2006 is $19.0 million and the Company has a cash position of approximately $83.0 million.
ON BEHALF OF THE BOARD OF DIRECTORS OF UEX CORPORATION
Stephen H. Sorensen, President & C.E.O.
Forward looking statements: This news release contains certain forward-looking statements. These forward-looking statements are subject to a variety of risks and uncertainties beyond UEX's ability to control or predict, which could cause actual events or results to differ materially from those anticipated in such forward-looking statements. Although UEX believes that the assumptions inherent in the forward-looking statements are reasonable, undue reliance should not be placed on these forward-looking statements.
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