Alligator Energy’s ‘encouraging’ review of new SA uranium project flags development

Alligator Energy (ASX: AGE) reports that a desktop study of its recently acquired Samphire uranium project in South Australia shows the deposit is highly amenable to in-situ recovery (ISR) processing.

This means that, upon commissioning, an immediate product could be produced for third-party toll processing, a factor that would reduce future capital costs.

Alligator said the project may now be a “timely potential development” opportunity.

In June, the company acquired Samphire, which holds an inferred 46.6 million pounds of uranium oxide and has languished since its 2007 discovery.

Samphire was previously owned by UraniumSA, the former listed company that discovered its two deposits, Blackbush and Plumbush.

Uranium heats up as US starts buying

Alligator has now updated and improved its flowsheet for uranium extraction and processing using ISR.

“An alternative open pit operation would be feasible but not the preferred option,” the company said.

Alligator pointed out this development comes at a time when the US Senate has passed a bill allowing the country’s energy department to purchase up to US$120 million (A$159 million) of uranium annually to establish a strategic reserve and that the market is now expecting uranium purchase prices to rise to the US$45-50 per pound (A$60-66/lb) range.

Such a price would support producer cost bases.

Alligator chief executive officer Greg Hall said the desktop review included previous work by UraniumSA and factored in modern processing and the latest exploration techniques.

“The Samphire project represents an exciting opportunity for Alligator within an improving uranium market for a timely potential development,” he added.

The review looked at 790 historic holes over 58,000m.

One hole at Blackbush intercepted 15.9m at 0.3% uranium oxide, including 4m at 1.02%.

Laboratory test work to follow

Alligator is now planning drilling to expand the Blackbush deposit and will also conduct sonic core drilling to provide samples for test work at Australia’s Nuclear Science and Technology Organisation (ANSTO) at Lucas Heights in Sydney.

Alligator is not permitted by the ASX to release details of its inferred-only resource, but the former UraniumSA published Blackbush as having an inferred mineral resource 64.5 million tonnes at a grade of 230 parts per million uranium oxide, for a contained 32.7Mlbs or 14,850 tonnes.

Plumbush’s inferred mineral resource was previously reported as 21.8Mt at 292ppm for a contained 13.9Mlbs, or 6,300t.

Alligator’s initial focus on uranium was the Alligator Rivers uranium province (ARUP) of West Arnhem in the Northern Territory, in a search for uranium deposits of similar mineralisation style and tenure to that of the world-class Alligator Rivers uranium deposits of Jabiluka and Ranger, that were concealed beneath the covering sandstone.

ARUP covers more than 1,000sq km of exploration licences.