DME grants uranium prospecting rights
Published: 6 Apr 07 – 0:00
The Department of Minerals and Energy (DME) has granted UK-listed firm Brinkley Min-ing the prospecting right for two loca- tions of the Waterval Prospect and has granted rights to Brinkley Min-ing’s subsidiary, Western Uranium, for one location.
The company has acquired the sole ownership rights to five farms which have uranium prospects, located in the vicinity of the town of Beaufort West, in the Western Cape province. The company has bought Waterval Farm and has the option to buy the remaining farms. Damsfontein, Bloemfontein, Rietkuil, and Flagfontein. These farms, have an aggregated area, totalling 42 000 ha.
In the competent person’s report prepared by SRK Consulting, it was reported that the Waterval Farm (in respect of which Western Uranium has now been awarded the prospecting rights over two of the three portions, equivalent to 2 515 ha of the total 3 601 ha applied for) has noncompliant historical mineral resources of about 39 000 t to 50 590 t of uranium and molybdenum mineralisation with an in situ grade of between 1 690 parts per million (ppm) and 1 820 ppm of uranium oxide. SRK Consulting estimated Brinkley’s exploration potential on the whole of the Waterval Farm to be between 10-million and 21-million pounds of uranium oxide.
In relation to the Rietkuil Farm (in respect of which Western Uranium has now been awarded the prospecting rights over one of the three portions, equivalent to 218 ha of the total 7 341 ha applied for), SRK Consulting reported that the prospect has noncompliant historical mineral resources of 1 152 115 t of uranium and molybdenum mineralisation with an in situ grade of 1 788 ppm of uranium oxide. SRK Consulting estimated Brinkley’s exploration potential on the whole of the Rietkuil Farm to be between 12-million and 25-million pounds of uranium oxide.
In its reporting of resources over the Waterval Farm and Rietkuil Farm prospects, SRK Consulting did not assign historical resources and, estimations of exploration potential to specific portions of the farm, and, as such, at this stage there is not a specific resource assigned to each portion of the prospects.
Western Uranium applied for prospecting rights in aggregate over five farms in the Karoo, which is made up of 22 portions that are considered to host significant uranium resources. Western Uranium owns the freehold on the Waterval Farm, which encompasses two of the granted portions. The Waterval Farm was historically drilled by Essex Minerals Company in the late 1970s.
The third portion granted is locatedon the prospective Rietkuil Farm, over which Western Uranium has sole ownership rights. The company has also partnered with an additional historically disadvantaged South African partner, Summer Days Trading. A new shareholders’ agreement has been signed, which complies with new black economic- empowerment policies proposed by the DME.
Under the terms of the new shareholders’ agreement, until a decision is made to develop a project, Brinkley Mining will own 49% of Western Uranium, Summer Days Trading will own 26% and Blue Nightingale will own 25%. As the single largest shareholder in Western Uranium, Brinkley Mining retains board control and the right to appoint the CEO of the company.
During the exploration phase prior to the development decision, Summer Days Trading and Blue Nightingale will benefit from a 26% free carried interest in Western Uranium. Brinkley Mining will fund Summer Day Trading and Blue Nightingale’s additional contributions through a loan. This loan will be nonrecourse to Summer Days Trading and Blue Nightingale in the absence of a development decision.
Western Uranium’s current budget to facilitate a development decision on the prospecting rights over five farms in the Karoo is about ?4-million.
In recognition of Summer Day’s contribution to the process of applying for and receiving prospecting rights, Brinkley Mining has agreed to issue 6,5-million new Brinkley ordinary shares to Summer Days, subject to a 12-month lock-in arrangement from the date of issue.
Brinkley mine nonexecutive chairperson Gerard Holden comments, “We are delighted to have been granted our first prospecting rights and look forward to the pro-cessing of the remaining applications.”
