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Denison plans Zambia U mine
Brendan Ryan
Posted: Mon, 24 Sep 2007

[miningmx.com] -- CANADIAN 'intermediate' uranium producer Denison Mines is planning to develop a uranium mine in southern Zambia.

This follows Denison’s acquisition of ASX-listed junior OmegaCorp which controlled the “advanced stage” Kariba Uranium Project which covers 1,893 square kilometres in the Zambezi Valley just north of Lake Kariba.

Addressing the Alternative Energy Forum held in Keystone, Colorado, Denison president and COO, Ron Hochstein, said plans were to have the mine in production by late 2010 or early 2011. That was despite the fact that Zambia at this stage had no specific permitting legislation covering uranium mining and was still in the process of drawing this up.

Hochstein said Denison had been in close consultation with both the Zambian government and the local communities about development of the mine.

“Both the communities and the government have been extremely supportive although they have stressed that we must ‘do it right’. They have raised questions on aspects such as the tailings dams and the handling of waste from the mine.

“That’s where I think Denison has an advantage over OmegaCorp as the owner/operator because we can point to our existing operations in Canada and the United States where we have had no violations over a 25-year period.”

Hochstein described the attitude of the Zambian authorities towards uranium mining as “refreshing”. He added that: “The Minister of Mines has told us he will do his best to get this mine into operation by 2010.”

Denison was formed through the merger of Denison Mines and International Uranium Corporation last December.

The merged group controls seven active uranium mines in the US and Canada. It owns 100% of the White Mesa Mill in the US state of Utah and holds a 22.5% stake in the McClean Lake Mill in Saskatchewan, Canada.

Both mills are fully permitted and Denison estimates production from them during 2007 at 700,000 lbs of U3O8.

Plans are to expand the group’s North American production to 5 million lbs of U3O8 by 2011. Production from the White Mesa mill – which is being modernised at a cost of $20m – is estimated at 2.9 million lbs U3O8 for 2008.

Hochstein said the Kariba project at this stage involved three specific deposits – Mutanga, Dibwe and Bunga.

The focus so far was on Mutanga and Dibwe which were estimated to contain a JORC-compliant resource of 13.7 million lbs (6,200 tonnes) of U3O8 at an average grade of 0.04%.

This would support the establishment of a mine producing about 1.5 million lbs of U3O8 annually over an economic life initially estimated at between six and ten years. This could be extended depending on the results of further exploration and development work.

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Hochstein said the stripping ratio at Mutanga would be less than 2:1 while company reports indicate the stripping ratio over the expected life of mine was not expected to be greater than 4:1.

He said the Kariba project was a low-grade deposit which was shallow and could be mined using open-pit methods at a cash operating cost of $30/lb of U3O8 produced.

The project was currently at the prefeasibility stage but the indicated capital cost for plant and infrastructure was some $80m.

Hochstein said further drilling would be carried out at the Bunga deposit to establish a JORC compliant resource. Initial work there had shown 75% of the mineralisation was less than 30 metres deep with some high-grade surface samples recovered showing grades of 3.8% U3O8.