CEO.CA Chairman's Briefing

TORONTO, Jan. 11, 2017 /CNW/ - U3O8 Corp. (TSX: UWE, OTCQB: UWEFF) ("U3O8 Corp." or the "Company") announces assays from a second type of uranium - vanadium mineralization that occurs in addition to the typical mineralized gravel at La Rosada, an area that lies within the larger Laguna Salada Project in Patagonia, Argentina.

"Our focus is squarely on reducing estimated production costs at the Laguna Salada Deposit," said Dr Richard Spencer, CEO of U3O8 Corp. "One way of achieving that goal is by delineating additional higher grade material - and our exploration team has risen to that challenge by finding high-grade uranium-vanadium in friable volcanic rocks – a type of mineralization that occurs in addition to the gravel-hosted mineralization typical of the Laguna Salada district. Trenching over the last couple of months has shown that uranium-vanadium in the volcanic rock constitutes a target in its own right, adding to the potential of the La Rosada target. Assay results from mineralized gravel at La Rosada will be released in the next few weeks."

Figure 1. Map showing the location of the La Rosada exploration area relative to the footprint of the Laguna Salada resource and the gravel plain in which the mineralization occurs (inset map). The main map shows the location of mineralized tuff (pale blue) and gravel (green).

Assay Results

Table 1. Summary assay results for composite panel samples from the walls of trenches excavated in rhyolitic tuff (volcanic rock) from the La Rosada area. Results from tuff from a prior press release made on November 12, 2013, before the significance of this mineralization was appreciated, are included (shaded grey) for completeness.

Mineralized Zones

Uranium-vanadium is exposed in rhyolitic tuff where the overlying gravel has been eroded at La Rosada. The three zones of mineralization identified to date have a high proportion of carbonate where the tuff has been altered and weathered to form a soft, friable layer that starts anywhere from surface to a depth of 1.5 metres. 

The average thickness of mineralization in the La Pala zone is 0.9 metres with an average grade of 3,128ppm (0.31%) U₃O_8, with grades ranging between 0.23% and 0.39% U₃O₈ (Table 1).  Mineralization in the 12 Zone averages one metre thick with an average grade of 2,522ppm (0.25%) with a grade range of 0.04% to 0.9% U₃O₈. The layer of mineralization at Pescado Norte is thinner, averaging 0.5 metres with an average grade of 2,679ppm (0.27%) and a grade range of 0.09% to 0.79% U₃O₈.  Vanadium grades are relatively constant at 0.1% V₂O₅ across the three areas of mineralized tuff. 

The mineralization encountered to date shows lateral continuity over a combined area of approximately 0.4 square kilometres.

Mineralization in the tuff at Pescado Norte lies in a northeast-trending zone that is aligned with, and may form the extension of, a mineralized channel in the adjacent gravel. The alignment raises the question as to whether there is a link between mineralization in the volcanic rocks and the adjacent gravel. 

There is a possibility that the horizontal mineralized layer in the tuff derives from feeder structures deeper in the tuff – a possibility that will be investigated by drilling as available exploration funding permits.

Beneficiation

Beneficiation characteristics of the gravel at Laguna Salada are good, resulting in concentration of 82% of the gravel's uranium into fine-grained material that constitutes just 9% of the gravel's original weight¹, because the barren pebbles and coarse sand can be so easily removed by sieving.  Beneficiation of the tuff, which does not contain pebbles, is likely to be less efficient at concentrating the mineralization; however, this assumption will be confirmed with test work in due course.

Estimated Cash Cost of Production at Laguna Salada (from the PEA)

Since the mineralization at Laguna Salada is contained within a flat sheet lying within three metres of surface, mining could commence at any chosen location. The Preliminary Economic Assessment "PEA") modeled mining of the richest areas of the Laguna Salada Deposit followed by successively lower-grade areas so that the capital cost of the Project could be paid off as quickly as possible.  Using the data available at the time of the PEA, this approach resulted in an estimated cash cost of production of US$11.62 per pound of uranium in year one, rising to average US$21.62 per pound over the life of the mine modeled in the PEA (Figure 2). 

Figure 2. Estimated cash cost of production of uranium by year at Laguna Salada plotted against the average grade of the fine component of the gravel – the material that would be processed each year - as per data in the Laguna Salada PEA. 

Work Plan

The short-term work plan focuses on ways of reducing estimated production costs for the broader Laguna Salada Project through exploration for additional higher-grade material as well as through refining and improving the efficiency of processing techniques.

Higher-grade targets in the La Rosada area include:

• The mineralized rhyolitic tuff that is considered as a target in its own right, and on which exploration is planned to continue; and
• Mineralization in the adjacent gravel, which will be more fully described in a press release shortly.

In addition, a possible link between mineralization in the tuff and the overlying gravel at La Rosada has led to a better understanding of higher uranium-vanadium grades found at the base of the gravel where it lies on tuff in the Laguna Salada resource area – a concept that will be discussed with associated results in a future press release. 

Metallurgical test work to determine the efficiency of the U-pgrade © processing method to concentrate uranium and vanadium into a smaller mass than is currently being achieved with screening, constitutes a key step before pilot plant work can commence.

Sample Preparation and Assay

Panel samples were taken on the walls of each trench, bagged and delivered to ACME's preparation facility in Mendoza, Argentina.  Each sample was crushed, split and pulverized to 75µm and a split of 250 grams sent for assay at ACME's analytical facility in Vancouver, Canada, for analysis by ICP-ES and ICP-MS after four-acid digestion.  QA-QC procedures were as described in the Laguna Salada PEA.

Technical Information

Dr. Richard Spencer, P.Geo., CGeol., President and CEO of U3O8 Corp. and a Qualified Person as defined by National Instrument 43-101, has approved the technical information in this news release relating to the Laguna Salada Deposit and the related PEA.

About U3O8 Corp.

U3O8 Corp. is focused on exploration and development of deposits of uranium and associated commodities in South America.  Potential by-products from uranium production include commodities used in the energy storage industry – in the manufacture of batteries - such as nickel, vanadium and phosphate.  The Company's mineral resources estimates were made in accordance with National Instrument 43-101, and are contained in three deposits: 

• Laguna Salada Deposit, Argentina – a PEA shows this near surface, free-digging uranium - vanadium deposit has low production-cost potential;
• Berlin Deposit, Colombia – a PEA shows that Berlin also has low-cost uranium production potential due to revenue that would be generated from by-products of phosphate, vanadium, nickel, rare earths (yttrium and neodymium) and other metals that occur within the deposit; and
• Kurupung Deposit, Guyana – a uranium resource has been estimated in four veins within a uranium-zirconium vein system. Resources have been estimated on four veins, while consistent mineralization of the same type has been intersected in scout drilling of an additional six veins, while yet other veins require first-time exploration drilling.

Information on U3O8 Corp., its resources and technical reports are available at www.u3o8corp.com and on SEDAR at www.sedar.com. Follow U3O8 Corp. on Facebook:  www.facebook.com/u3o8corp, Twitter: www.twitter.com/u3o8corp and Youtube: www.youtube.com/u3o8corp.

Forward-Looking Statements

This news release includes certain "forward looking statements" related with the development plans, economic potential and growth targets of U3O8 Corp's projects. Forward-looking statements consist of statements that are not purely historical, including statements regarding beliefs, plans, expectations or intensions for the future, and include, but not limited to, statements with respect to: (a) the low-cost and near-term development of Laguna Salada, (b) the Laguna Salada and Berlin PEAs, (c) the potential of the Kurupung district in Guyana, (d) impact of the U- pgrade^TM process on expected capital and operating expenditures, and (e) the price and market for uranium. These statements are based on assumptions, including that: (i) actual results of our exploration, resource goals, metallurgical testing, economic studies and development activities will continue to be positive and proceed as planned, and assumptions in the Laguna Salada and Berlin PEAs prove to be accurate, (ii) a joint venture will be formed with the provincial petroleum and mining company on the Argentina project, (iii) requisite regulatory and governmental approvals will be received on a timely basis on terms acceptable to U3O8 Corp., (iv) economic, political and industry market conditions will be favourable, and (v) financial markets and the market for uranium will improve for junior resource companies in the short-term. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in such statements, including, but not limited to: (1) changes in general economic and financial market conditions, (2) changes in demand and prices for minerals, (3) the Company's ability to establish appropriate joint venture partnerships, (4) litigation, regulatory, and legislative developments, dependence on regulatory approvals, and changes in environmental compliance requirements, community support and the political and economic climate, (5) the inherent uncertainties and speculative nature associated with exploration results, resource estimates, potential resource growth, future metallurgical test results, changes in project parameters as plans evolve, (6) competitive developments, (7) availability of future financing, (8) exploration risks, and other factors beyond the control of U3O8 Corp. including those factors set out in the "Risk Factors" in our Annual Information Form available on SEDAR at www.sedar.com. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. U3O8 Corp. assumes no obligation to update such information, except as may be required by law. For more information on the above-noted PEAs, refer to the September 18, 2014 technical report titled "Preliminary Economic Assessment of the Laguna Salada Uranium-Vanadium Deposit, Chubut Province, Argentina" and the January 18, 2013 technical report titled "U3O8 Corp. Preliminary Economic Assessment on the Berlin Deposit, Colombia."

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¹ September 18, 2014 technical report: "Preliminary Economic Assessment of the Laguna Salada Uranium Vanadium Deposit, Chubut Province, Argentina." 

SOURCE U3O8 Corp.