Uranium exploration is a business activity that is focused on identifying economic concentrations of mineralization that can be economically exploited through mining.
Exploration begins with an evaluation of the investment worth of conducting exploration within a particular political jurisdiction and geographical area. This includes desktop study of historical, geological, and other technical information. A technical objective is the identification of the potential for the occurrence of economic concentrations of uranium within the geological setting under investigation. Another objective is the selection of suitable exploration technologies.
Once a geographical area has been selected, field programs are designed relying on well-known geological, geochemical, geophysical exploration methods [11]. These programs can be conducted over a decade or longer depending upon results. The programs typically involve both regional and detailed exploration components and culminate in the drill testing of promising targets. On rare occasions, economic concentrations of uranium mineralization are encountered and some of these discoveries are developed into ore bodies through more intensive follow-up work. Descriptions of the exploration process and exploration methods can be found in [12].
The typical exploration process is depicted in Fig. 11. Following research and the selection of a project area, exploration moves from regional or reconnaissance surveys, to detailed exploration follow-up, and culminates in drill testing. It is estimated that approximately one in 1,000 exploration projects will lead to the discovery of an economic uranium deposit, and that the probability of success is one in three, that these projects will advance through the feasibility study to the mining stage.
FIG. 11. The exploration process.
Expenditures increase from the exploration to mining stage as the program advances from project generation through to exploration, discovery, and beyond. Pre-development, development, production, and ultimately decommissioning phases associated with mining involve larger investments (Fig. 12).
57
The sequence of uranium project generation, exploration, discovery, evaluation of deposits to determine their economic viability, and mining project development, involves increasing levels of expenditure and decreasing levels of investment risk. A return on investment is realized only after production starts and after lead times that can be decades long. Upon depletion of a mine’s uranium reserves, additional costs are associated with reclamation and environmental monitoring.
The economic viability of uranium deposits depends upon many factors at the mining stage.
Some of these factors are ranked in a survey by [14]. Risks associated with the definition of economic reserves, political and country risk, social and environmental risk, metal price, and operating costs are identified as being more significant (Fig. 13).
The world’s lowest cost primary uranium producers can be found in the in-situ-acid-recovery amenable sandstone-hosted roll-front uranium deposits of Kazakhstan, and the unconformity-related uranium deposits of Saskatchewan. The long-term viability of producing mines can be impacted by depressed fuel prices leading to the curtailing of production, mine closure, the deferral of mining developments, and the deferral of investments in uranium exploration.
The economic viability of uranium mining operations is related to the sales price of uranium.
A uranium production cost curve is presented in Fig. 14. Producing mines are illustrated by geological deposit type relative to short- and long-term uranium fuel price indicators. A global annual uranium production capacity of ~80 million pounds U3O8 (~30,000 t U) is available at
< US$30/lb, and ~120 million pounds U3O8 (~45,000 t U) is available at < US$40/lb [15].
The economic viability of uranium deposits discovered through the exploration process is dictated by uranium grade, and tonnage, among many other factors previously depicted in Fig.
13. To illustrate this, the size distribution of primary Australian and Canadian uranium deposits by contained uranium, is presented in Fig. 15.
Many deposits may never meet an economic size threshold considering the uranium sales price, and social, and political factors. Examples include the sub-economic Kintyre and Millennium deposits, which appear to be sub-economic at current price, based upon public announcements.
These deposits provide a rule-of-thumb for a deposit size threshold that economic deposits must exceed. Another example includes the mature Rabbit Lake mine, which closed in response to the depressed uranium market. Another example relates to the challenges associated with committing to mine expansion at Ranger concomitant with low sales price and the timing of the extension of mining agreements.
58
FIG. 12. Hypothetical cash flow linked with exploration and mining development. After [13].
FIG. 13. Ranking of principal mining project risks. After [14].
59 FIG. 14. Uranium mining production cost curve. After [1517].
In Australia, the inclusion of the Koongarra deposit into the Kakadu National Park means that it may never be developed. This is an example of sovereign risk that has contributed to the withdrawal of uranium exploration and mining investments from the region. The Quebec government moratorium on uranium development is a similar example. Jabiluka, one of the world’s largest undeveloped uranium deposits, was discovered in 1971. It has been on long-term care and maintenance for many years due to socio–political factors. Fig. 16 is an illustration of the time from discovery to production for significant Canadian and Australian [18] uranium deposits. The time to production ranges up to 33 years for economic deposits.
Many of the other deposits classified in the sub-economic category have been inventoried for over 30 years to over 60 years, despite significant expenditures to expand resources by successive exploration and mining companies. The large ‘economic’ Jabiluka uranium deposit is also represented in this category. The statistics for Canadian and Australian deposits indicate that less than one half of the significant deposits that have been discovered have been brought into production (Fig. 17).
The IAEA World Distribution of Uranium Deposit Database (UDEPO) is an inventory of the global distribution of uranium deposits [19]. An estimate of the number of economic uranium deposits suggested by their size threshold is presented in Fig. 18. While recognizing that the UDEPO database also includes information on mined out deposits, ~37 economic deposits exist assuming a rule-of-thumb economic cut-off of 50,000 t U. Assuming that one-half of these deposits will be producers, this analysis yields ~30 deposits in this category, or ~2% of the global inventory of deposits.
A comparison of success rates for uranium exploration in the Athabasca Basin and for the USA manufacturing sector is presented in Table 1 for added clarity, where ~100 uranium showings
60
have resulted in one economic discovery [18]. Uranium exploration can be compared to any other research-and-development activity, with comparable rates of conversion of concepts to economic outcomes.
FIG. 15. Status and size distribution of uranium deposits in Australia and Canada. Australia size data from [18]. ‘Sub-economic’ deposits fall in gray shaded area.
61 FIG. 16. Number of years from discovery to production for selected Australian and Canadian uranium deposits. Australian data from [18].
FIG. 17. Conversion of significant discoveries to mines for Australian and Canadian uranium deposits.
62
FIG. 18. Estimated number of uranium deposits in the world with economic potential based on size.
Data from [19].
TABLE 1: COMPARISON OF USA MANUFACTURING SUCCESS RATES WITH ATHABASCA BASIN DISCOVERY RATES (USA MANUFACTURING DATA FROM [20]. ATHABASCA DISCOVERY RATES AFTER [21])
USA Manufacturing 1 in 3,000 success rate
Athabasca Basin 1 in 10,000 success rate
Raw ideas 3000 Conceptual drill targets and 10000
Ideas submitted 300 Reconnaissance drill targets 1000
Small projects 125 Showings 100
Significant development 9 Advanced projects 10
Major development 4 Prefeasibility 3
Launches 1.7 Feasibility 1.5
Commercial success 1 Economic deposits 1