Overview
The 1,426 ha Midwest property consists of three contiguous mineral leases located approximately 750 km north of Saskatoon, Saskatachewan, Canada.
In 1966, Esso Resources Canada started initial uranium exploration work in an adjacent area. In 1977, radioactive mineralization was discovered in a drillhole penetrating the regional unconformity at the base of the Athabasca sandstone. The Midwest deposit was delineated in an extensive drill program between 1978 and 1980. The Midwest A deposit is located about 3km to the northeast of the main Midwest deposit in one of the three claims owned by the Midwest Project.
The project is a joint venture between Areva Canada Resources Inc. (69.16%), Denison Mines Corp. (25.17%) and Ourd (Canada) Ltd. (5.67%) with Areva being the operator.
In December 2007, announced the decision to proceed with the development of the Midwest uranium mine project. The Midwest Project, involves draining part of the Mink Arm of the South McMahon Lake in Northern Saskatchewan to construct an open pit mine about 45 hectares in size and 215 m deep. The pit, as currently designed, will produce an estimated 36 million pounds of U3O8.
Subject to regulatory approvals, site construction including the haul road, water treatment and other facilities could begin in mid-2009. Stripping of the rock over the ore was planned to commence in early 2010 with ore removal starting in mid-2011 and continuing through to 2013.
The ore would be trucked 15km along a dedicated haul road to the McClean Lake mill for processing.
Unit mining costs per bank cubic metre of material excavated is estimated to average $4.69 over the two year life of the mining operation, which translates into $5.02 per lb. of U3O8. The total unit milling cost for Midwest ore is estimated to be $4.86 per pound of U3O8 produced.
On 25 November 2008, development of Midwest was postponed due to economic conditions, delays and uncertainties associated with the regulatory approval process. The increasing capital and operating costs and current markets for uranium were also factors attributed to the decision. Environmental assessment and engineering work were to continue.
Location
The Midwest property is located 750 km north of the city of Saskatoon in the sparsely populated northern part of the province of Saskatchewan, Canada.
The project lies north of Points North Landing at about 400km north of La Ronge and could be accessed by year around gravel roads. Highway 102 runs from La Ronge to Southend for 194km. Highway 905 runs north from Southend to an intersection with a road to Rabbit Lake and Collins Bay after 247km. From that point, it takes a north-western route and reaches Points North Landing after 30 km.
Access to the Midwest A site from Points North Landing is by a 2km dirt road to the old Midwest exploration shaft and dam and then by a 2km trail through boreal forest on the peninsula separating two branches of the McMahon Lake.
Access to the McClean Lake mine and plant site of Areva, about 10km to the east, and to the Cigar Lake mine site of Cameco, about 50km to the southwest, are found along that last stretch of the 905 highway.
There are regularly scheduled air services between Saskatoon, La Ronge and Points North Landing.
Physiography of the project area is typical of the recently glaciated terrains of northern Canada with sand or gravel moraines and drumlins. Drainage is characterized by numerous lakes and wetlands with occasional muskeg in topographic depressions. Relief is limited with natural topo elevations of about 480m above sea level. Vegetation is predominantly moss with few jackpines and black spruces. The area lies within a zone of discontinuous permafrost.
Climate is characterized by long cold winters with mean monthly temperatures below freezing points for seven months of the year. The mean monthly temperatures are below 0 degrees C for seven months of the year. The precipitation is relatively heavy for the region (550 mm annually with more than half that total falling as rain). The mean date of last frost in the spring is June 1st and the mean date of the first frost is September 1st, giving a mean annual frost-free period of 86 days. Site activities are carried out all year despite the cold weather during the winter months.
Geology
The Midwest and McClean Lake uranium deposits lie near the eastern margin of the Athabasca basin in the Churchill Structural Province of the Canadian Shield. The bedrock geology of the area consists of basement Archean and Paleo-Proterozoic gneisses unconformably overlain by flat lying, unmetamorphosed sandstones and conglomerates of the Athabasca Group. The basement surface is marked by a paleoweathered zone with lateritic characteristics referred to as regolith, onto which the Athabasca sandstone was deposited.
The Midwest deposit is lens to cigar shaped, 600 m long with pods of higher grade mineralization separated by lower grade mineralization. The width ranges from 10 metres to over 100 m. The zone thickness ranges from 5 m to 10 m.
Mineralization consists primarily of uranium oxides (uraninite and pitchblende) with a suite of nickel-cobalt arsenides, sulphides and sulpharsenides in a clay matrix. The highest grade mineralization consists of one to four metre thick sections of massive uranium oxides and niccolite surrounded by a thin clay envelope. Typically, high-grade mineralization is surrounded by a thin low-grade envelope (0.05% to 0.5% U3O8), one to two metres thick, which consists of massive clay and strongly argillized sandstone.
The Midwest deposit is representative of a typical unconformity-type zone, where the bulk of the high grade material is located at the basement - sandstone contact, either in the basal conglomerate or in the upper basement unit. The deposit displays sharp lateral boundaries, both in plan and section. Mineralization follows a general northeast trending structural fault corridor, parallel to the strike of a metasedimentary graphitic unit. High grade lenses are elongated to N70 degrees E. Locally, mineralized lenses occur along steep faults above and below the main unconformity mineralization. These are termed "perched" and "deep basement mineralization" respectively.
According to the 2007 Midwest Feasibility Study, the Midwest deposit has estimated probable reserves of 640kt at 2.2%U (14,113tU) plus inferred resources of 345kt at 0.7%U (2356tU), both at a 0.085%U cutoff.
The Midwest A deposit consists of several sub-parallel high-grade mineralized structures trending N60 to N70 and following the local foliation. These structures are surrounded by low-grade remobilized and clay-rich mineralization that has formed in the typical 'pancake' morphology. This occurs on several layers, with the most pronounced being located in the sandstone just under the contact with the chlorite zone, immediately under a conglomerate marker horizon (disturbed and locally destroyed by the quartz dissolution) located at about 175 m below surface. Another layer, more poorly defined, occurs just above the unconformity. The mineralized structures also exhibit structurally controlled roots that go well down into the basement (as far as 70m beneath the unconformity). It was noted during the drill programs that if a mineralized graphitic structure was intersected in the basement, it could be followed up into the overlying sandstone where it would always produce a zone of strong mineralization. The uranium mineralization is nickel, arsenic, copper, lead and cobalt rich.
Following the 2007 winter program Midwest A resources were estimated at 464,000t grading 0.48% U containing 5.8Mlbs U3O8 and 9,200t at 18%U for 4.3Mlbs U3O8.
Mining & Operations
The Midwest uranium project involves draining part of the Mink Arm of the South McMahon Lake to construct an open pit mine approximately 900 by 350 m and 215 m deep. The mine will produce approximately 360,000 tonnes of ore averaging at 4 percent uranium resulting in the production of 36 million pounds of U3O8.
The majority of ore release will occur at the end of the mining life, since the deposit is largely tabular and located at the basement contact with the sandstone. Initial mining activity will involve excavation of barren waste along with some quantities of special waste (material with elevated uranium content) occurring on certain benches.
Special waste material has been designated as waste rock containing a minimum of 0.03% U3O8 and a maximum of 0.30% U3O8. 0.30% U3O8 material is classified as ore. When special waste is encountered in the course of mining it will be mined selectively from the barren waste material and stockpiled separately on surface adjacent to the pit. Once mining is complete the two million tonnes of accumulated special waste material stockpile will be rehandled and dumped back inside the open pit prior to closure.
The waste mining program is planned using large conventional mining shovels and trucks with a high productive capacity and relatively low unit mining costs.
When mining approaches the main mineralized zone in the lower benches of the pit, it is planned that the mining fleet will be changed over to the smaller hydraulic excavators and mining trucks currently in use at the McClean Lake operations. This equipment is better suited to the selective mining and recovery of the ore grade materials. The mining rate will be significantly slower than for waste removal. Careful selectivity will ensure that materials of various grade classifications will be recovered and stockpiled separately for subsequent blending and transport.
Mine equipment was planned to include one OK RH120 Shovel; one Hitachi 1100 Backhoe; five Cat 777 Haul Trucks; two Cat D9 Dozer; one Cat 16G Grader; one Water truck; up to six Pickup Trucks; one Fuel Truck ad one Service Truck.
Water for industrial activities is readily available from any of the many lakes in the Midwest vicinity. Electric power is available from the provincial grid through a switch station at Points North Landing.
Subject to regulatory approvals, site construction including the haul road, water treatment and other facilities could begin in mid-2009. Stripping of the rock over the ore would then commence in early 2010 with ore removal starting in mid-2011 and continuing through to 2013.
Processing
The Midwest property is located about 20 km by existing roads from the JEB processing mill (McClean Lake operations) which will process Midwest production.
The operation is planned to blend approximately 2.5 t of special waste material with each tonne of the recovered ore from the pit to produce material suitable for truck haulage to the JEB mill. Operating plans call for a 2.35 percent U3O8 maximum grade of material to be truck-hauled to the JEB mill to ensure safe handling and control of the ore materials. The average reserve grade at Midwest is estimated to be 5.47 percent U3O8.
The JEB mill consists of a modern uranium processing facility licensed to produce eight million pounds of U3O8 per year, a sulphuric acid plant, warehouses, shops, offices and living accommodations for site personnel, together with related infrastructure.
The mined-out JEB pit located adjacent to the JEB mill has been converted into the JEB Tailings Management Facility, designed to also receive tailings from the Midwest and Cigar Lake deposits in addition to the tailings from the McClean Lake deposits.
The main unit operations in the process are: Grinding with SAG and ball mill; Leaching; Counter current decantation (C.C.D); Pregnant solution clarification; Solvent extraction; Yellow cake precipitation; Ammonium sulphate crystallizer; Tailings neutralization and disposal; Water treatment.
The annual capacity of the JEB mill will be increased from eight million pounds to twelve million pounds of U3O8 both to accommodate Midwest production and Cigar Lake ores. The available mill capacity for processing Midwest ore is estimated at 4.3 million lbs annually.
A 98 percent metallurgical recovery of uranium can be achieved provided that leach times are extended to 24 hours from the current operating practice of eight hours for McClean ore. A separate leaching circuit for Midwest ore is now planned in the design for the JEB mill to accommodate this requirement.
The Midwest deposit has a high arsenic content of approximately 7%. A process has been developed that will remove arsenic from the process solutions and to convert it into a stable solid compound for disposal.
The Midwest mineralization is also estimated to contain 4.35% nickel and 0.34% cobalt (1.88% Ni and 0.14% Co after dilution to mill feed grades). A 30 percent nickel and 3.14% cobalt grade precipitate containing both the nickel and cobalt could be made from the waste raffinate from the uranium recovery process. The radioactivity of the precipitate would be below typical background levels.
Environment and community
The Midwest property is subject to decommissioning liabilities. The Midwest site is operated under various permits, licences and leases granted and renewed from time to time.
At the end of the mining operation approximately two million tonnes of special waste material will remain to be re-handled into the pit. The pit will be allowed to flood and the special waste will be covered with water to prevent oxidation.
The nearest permanent community is Wollaston Post, about 50 km from the property on the east side of Wollaston Lake. Personnel are recruited from the northern communities and major population centres such as Saskatoon, and normally work one week on and one week off. Workers commute to and from the McClean operations by aircraft landing at Points North then by bus to the site. While at the site, workers reside in permanent camp facilities at McClean Lake.
Midwest personnel will reside at camp facilities near the Midwest property. It is anticipated that the project will employ approximately 150 people.
