PRETORIA () -- Mining activity is beginning to heat up in South Africa's Karoo Basin, an area where uranium ore deposits are once again attracting interest from mining companies.
Brinkley Mining Plc. [AIM:BRM] on Feb. 13 confirmed that South Africa's Department of Minerals and Energy has officially granted Western Uranium Pty. Ltd., Brinkley's South African subsidiary, prospecting rights for four uranium prospects in the Karoo region, including two in Waterval and Rietkull, prospects that are "hugely important to Brinkley," said a spokesperson for the company. Rights to an additional area called "remainder of Krugel's claim 459" were also confirmed.
Rights to three of these prospects - two in the Waterval and one in the Rietkull Prospect - were previously announced on Oct. 13 last year. The fourth rights award covers the remainder of the Waterval Farm property.
Additionally, Brinkley on Dec. 8 announced that it is expanding its relationship with Blue Nightingale 709, one of its South African Black Economic Empowerment partners. In return for issuing Blue Nightingale 6 million fully paid, newly issued company shares Brinkley has obtained a right of first refusal over any uranium projects in South Africa that Blue Nightingale originates.
"Brinkley's experience with Blue Nightingale to date has been extremely fulfilling...There are very few uranium companies outside South Africa that have achieved this without cutting corners ... Western Uranium intends to commence a work programme as soon as possible," Brinkley's spokesperson told Resource Investor.
The Waterval & Rietkull Farms
Western Uranium with Blue Nightingale 709 applied for prospecting rights in aggregate over five farm properties in the Karoo made up of 22 portions which are considered to host significant uranium resources.
Occurrences of uranium oxide in the Karoo Basin have been located in a broad belt stretching from the Aberdeen district through Beaufort West to Sutherland in an east-west direction. Various historical estimates of the grade and tonnage of the properties of Sutherland and proximate areas were undertaken in the 1970s and 1980s. The Essex Minerals Company explored and drilled in the Waterval Farm area in the late 1970s, according to company information, according to Brinkley information.
Western Uranium owns the freehold on the Waterval Farm which encompasses two of the portions for which the South African DEM granted prospecting rights. The third is located on the Rietkull Farm property, for which Western Uranium has sole ownership rights.
The three portions of the Waterval Farm property comprise the entire 3,601 hectares for which it applied. For the Rietkull Farm property Western Uranium has been awarded prospecting rights over one of three portions, equivalent to 218 hectares of the 7,341 hectares for which it has applied.
With its Waterval and Rietkull prospecting rights confirmed Western Uranium intends to commence airborne reconnaissance, detailed geological mapping, re-sampling of previous drill holes and a new drilling programme at the earliest opportunity, according to a press release.
Said Gerard Holden, non-executive chairman of Brinkley Mining commented, "We are delighted to have completed the execution of these prospecting rights. We look forward to commencing exploration activities immediately for these prospects over which Western Uranium has exclusive access and ownership rights."
SRK Consulting in the Competent Persons Report it prepared by and submitted on 31 May 2006 reported that the Waterval Farm has non-compliant historical mineral resources of between 39,000 and 50,590 tonnes of uranium and molybdenum mineralisation with an in situ grade of 1,690 and 1,820 parts per million (ppm) of uranium oxide. It estimated Brinkley's exploration potential on the whole of the Waterval Farm to be between 10 million and 21 million pounds of uranium oxide.
For the Rietkull Farm prospect SRK reported that the prospect has non-compliant historical mineral resources of 1,152,115 of uranium and molybdenum mineralisation with an in situ grade of 1,788 (parts per million) ppm of uranium oxide.
The prospect has non-compliant historical mineral resources of 1,152,115 of uranium and molybdenum mineralisation with an in situ grade of 1,788 ppm of uranium oxide. It estimated Brinkley's exploration potential on whole of the Rietkull Farm to be between 12 million and 25 million pounds of uranium oxide, Brinkley reported.
Western Uranium reported last October that it had a budget of approximately 4 million pounds sterling to carry out the work necessary to reach a development decision on the five farm prospects in the Karoo.
Blue Nightingale Partnership
In addition to being granted prospecting rights in the Karoo through Western Uranium, Brinkley is also expanding its relationship with Blue Nightingale 709, the Brinkley Group's joint Economic Empowerment Partner in the five applications it has filed for prospects in the Karoo region.
In return for granting Blue Nightingale 6 million fully paid, new ordinary company shares, Brinkley gains a right of first refusal for all uranium projects the former may originate in South Africa. The shares are subject to a 12-month lock-in agreement from the issue date, which is dependent upon Blue Nightingale gaining approval for the arrangement from the Reserve Bank of South Africa.
Blue Nightingale also owns 25% of Brinkley's South African Western Uranium (Proprietary) Ltd.
Other owners include Summer Days Trading 3 Pty Ltd. which has a 26% share in the company. Brinkley Mining retains Board control and the right to appoint the CEO as the single largest shareholder with a 49% holding. Summer Days is a Historically Disadvantaged South African (HDSA) women's group based in Cape Town that assisted Brinkley in applying for and receiving prospecting rights in the Karoo.
Blue Nightingale and Summer Days will benefit from their free-carried Brinkley shareholdings during the exploration phase of the Karoo uranium projects prior to a Development Decision, as defined in their agreement and according to South African law.
Once a Development Decision has been made Brinkley Mining has no ongoing obligations to maintain a free-carried interest or provide loan finance to Summer Days or Blue Nightingale but will assist them to procure finance, according to company information.
"We are delighted to have been granted our first prospecting rights and look forward to the processing of the remaining applications. These rights now provide us with the opportunity to commence our exploration and evaluation program on these strategic assets for South Africa," said Holden.