Uranium tops list for investment cash
Uranium tops the list of resources being targeted for exploration by mining companies
When it comes to attracting investment for mineral exploration and development, uranium is the undisputed heavyweight champion of Saskatchewan.
Spending on the search for the metal that provides most of the world’s atomic energy has been No. 1 since 2012, when potash last led the way, according to recent figures from the province’s minerals regulator.
Exploration and development spending for uranium topped $136 million in 2015 and the final figure was expected to be higher in 2016. In contrast, preliminary figures show $70 million was spent on potash exploration, $14.5 million on diamonds and $3.7 million on gold in 2016.
“So there remains, despite low uranium prices, a lot of interest in our world-class uranium resources,” says Cory Hughes, executive director of mineral policy for the Saskatchewan Ministry of the Economy.
Investment in exploration is an indicator of where Saskatchewan’s next big mine developments will take place in the coming decades.
“There are a lot of identified world-class uranium deposits in the North. Right now, there isn’t the necessary demand for the development of those projects, but of course they’re moving forward in the process.”
Saskatchewan is the world’s second-largest uranium producer at 22 per cent of global supply.
Uranium production in the province last year totalled about 13,300 tonnes and came from three mines: McArthur River/ Key Lake, Cigar Lake/McClean Lake and Rabbit Lake, which was closed last spring. The total output for 2017 is expected to reach 13,900 tonnes.
Large exploration projects are underway in north-central Saskatchewan’s Athabasca Basin, where explorers have uncovered world-class deposits, Hughes says.
“The Patterson Lake area on the southwest side of the basin hadn’t had a lot of development until exploration firms like NexGen and Fission Uranium came along,” Hughes says. “Those two companies have identified hundreds of millions of pounds of uranium at very, very high grades comparable to the McArthur and Cigar deposits.”
NexGen Energy now holds the largest undeveloped deposit in Canada.
“Our flagship asset is the Arrow deposit, which is located in the southwest Athabasca Basin, approximately 155 kilometres north of La Loche,” says Travis McPherson, corporate development manager with the Vancouver-based company. Arrow is named after the village that is the closest populated area to the remote find.
So far the company says it has uncovered more than 450 million pounds of uranium and it continues to find more in the area.
Fission Uranium reports having discovered the Triple R deposit, a major near-ground find in its Patterson Lake South project, as well as two other deposits.
“So we have two world-class deposits moving through the evaluation phase,” Hughes says.
Also, at Wheeler River on the eastern edge of the Athabasca Basin, a joint venture led by Denison Mines has the Phoenix and Gryphon deposits. Denison also has 19 unsurveyed mineral claims totalling more than 11,700 hectares at Wheeler River. Denison reports a 60 per cent interest in the joint project, Cameco is in for 30 per cent and the remaining partner is JCU Canada Exploration Co. Ltd.
Cameco also owns 70 per cent of the Millennium project discovered in 2000 on the southeastern portion of the Athabasca Basin. Cameco has reported it was awaiting better market conditions before moving further ahead on that front.
The minerals branch’s Hughes also lists Areva Resources Canada at its Midwest Deposit, “which is through the assessment process, as well as additional deposits at McClean Lake.”
While he says the provincial government hasn’t finalized the latest survey of uranium companies’ plans for exploration and development in 2017, there is a “very strong expression” of interest in the resource.
POTASH
Current spending for potash exploration and development in Saskatchewan remains below half of peak levels — about $70 million in 2016, versus $170 million in 2012.
“We’ve gone through a major expansion of our potash capacity,” Hughes says.
K+S Potash is about to begin production at a new mine near Bethune, the Mosaic Co. is halfway through a 10-year expansion of its Esterhazy K3 mine and BHP Billiton is also in the middle of its giant Jansen development.
Nevertheless, Hughes adds that “there remains a lot of interest in our potash resources and we are the largest potash producer in the world.”
A solution potash mine costing some $3.6 billion is being investigated by Yancoal and has made its way through the environmental assessment process. It’s believed to be moving toward an investment decision later this year on the project just north of Regina. On a similar scale, Muskowekwan First Nation has formed a partnership with junior mining company Encanto to mine potash on its reserve for sale to India.
“And there are multiple other potash projects at different phases of exploration and evaluation,” Hughes says.
DIAMONDS & GOLD
The search for diamonds in northern Saskatchewan, which previously attracted more than $100 million in investments, has also declined to about $14.5 million in 2016. The gems remain the third-largest target for exploration and development in the province.
“Although we don’t have any diamond production, we are cautiously optimistic that we will be a diamond producer,” says Hughes.
East of Prince Albert in the Forta-la-Corne forest area, Shore Gold is working on environmental assessments and seeking investors to move ahead, Hughes says. Also, near the town of Hudson Bay, work continues on the North Arrow project where diamond-bearing kimberlites have been found.
Diamond giant De Beers was also active in the Athabasca Basin in search of kimberlites.
On the gold front, work continues at the long-producing Seabee Gold Operation that was acquired by Silver Standard Resources last year.
Silver Standard’s budget of about $5 million annually for exploration at Seabee will target the mature Seabee mine, the nearby Santoy mine complex and the adjacent Fisher land holding, in which the company recently acquired an interest through a joint venture with Eagle Plains Resources.
“Last year, we continued to spend aggressively underground and increased the reserve at Seabee by 50 per cent — pleasingly also at a higher grade. So that’s enabling us to have a look at the mine plan,” says Paul Benson, president and chief executive officer of Silver Standard.
Another prospect for Silver Standard is the Amisk Lake property on Saskatchewan’s eastern flank. The holding contains a gold resource of 1.6 million ounces, but “that probably needs a higher gold price to move forward,” Benson says.
There remains, despite low uranium prices, a lot of interest in our worldclass uranium resources.
We’ve gone through a major expansion of our potash capacity.