It's been an interesting few weeks since I last checked in on uranium.
The search for what's next in yellowcake projects has taken me to some out-of-the-way places. Dusty corners of libraries, with books that haven't been checked out since Reagan was president. Phone conversations with experts who've traveled to obscure uranium mines the industry has largely forgotten.
Here's what's most important. After all of this digging, I'm more convinced than ever that the uranium sector is ripe for new discoveries.
Uranium is the Peter Pan of commodities. It's a business that never really got the chance to grow up.
Michel Cuney and Kurt Kyser have put together some great research on this point. The following charts from their paper "The Effect of Economic and Research Factors in Understanding Uranium Exploration and Discovery of Deposits" make the case. (Images are courtesy of my iPhone, as I'm in Paris right now away from my scanner.)
The chart at right shows a generalized model for the way mineral exploration progresses -- as applied to the development of uranium deposits in Canada's Athabasca Basin.
There are three stages exploration goes through. Initially, most of the work is done by prospectors. In a virgin area, not a lot of geologic expertise is needed. The better approach is to simply get out in the field and walk over the rocks. Because the area is relatively underexplored, there are ore bodies sitting at surface waiting to be discovered by anyone who puts boots on them.
In Athabasca, prospector-driven exploration in the 1960s and 1970s led to discoveries around the edge of the basin, such as Key Lake.
The next stage for exploration is model-driven. The low-hanging deposits that have been discovered are analyzed by geologists, geochemists, engineers and geophysicists. These professionals come up with general ideas about where and why these ore bodies form.
Exploration personnel take these ideas and apply them in the field, guiding them to the discovery of less-obvious deposits. In Athabasca, the study of surface-outcropping deposits at the basin rim led to models that directed exploration in the 1980s and 1990s for buried "blind" deposits lying below hundreds of meters of sandstone in the basin center; leading to the discovery of some of the world's largest uranium ore bodies, such as McArthur River and Cigar Lake.
Then there's the third exploration phase. Eventually, exploration teams get very good at applying the models. And discover most of the deposits there are to be found.
At that point, the industry undergoes a "paradigm shift". The lack of easy new discoveries pushes mining companies into intense research and technology development. They come up with new ideas on where to find different types of deposits. Or how to economically process known deposits previously considered too difficult.
This research stage led to the development of heap-leach processing technology for gold, SX-EW processing for copper, nickel laterite exploration and the Carlin-style exploration model for gold in Nevada.
In uranium things never got that far. The chart at left is a little dense, but very important. It plots the number of research publications on uranium released yearly, going back to 1960. Publications in refereed scientific journals are shown by the dotted line, while total uranium publications (refereed and non-refereed) are represented by the solid line.
As the chart shows, the research boom was on in the 1980s. Spurred by the rising uranium price late in the 1970s, research rose substantially. Even after the price fell early in the 1980s, research in refereed journals continued to rise until 1988.
At that point, research fell off a cliff. And it has yet to recover to the level of the 1980s, even with the uranium price boom of recent years.
This has some critical implications. A lot of knowledge on uranium (including models on where new, significant deposits might be discovered) was generated in the 1980s. And then due to the crash, little of it was ever put in to practice in the search for new ore bodies.
Today, it's been over 20 years since the last research boom - enough that almost no one has thought to go back and re-read the work of the 1980s, and apply it to modern exploration. This is the reason uranium has not seen the research/technology-driven "new discovery" predicted on the first chart above.
Having read through a good chunk of this work the past few weeks, I can attest that little of the research knowledge of the 1980s has made it into the collective consciousness of today's uranium exploration industry.
Some of the papers I've looked at contain incredibly powerful syntheses of information from uranium deposits worldwide and excellent suggestions on new exploration ideas. But the library slips in the back reveal most of these documents have not been checked out since 1987. No joke.
Therein lies the opportunity. Compiling this information has already led me to some great ideas on where the "next step" for uranium might be. This week I'll begin putting down this information in these pages (with the caveat that transmissions may be a little patchy as I'm soon off to Slovakia for some project appraisals).
These are the "building blocks" that will lead to the exploration and development projects many of you (any myself) are interested in. The kind with a real chance of generating a billion-dollar discovery.
I hope you'll all tune in over the next several days. It will be worth your time.
Here's to putting your discovery cap on,
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