Junior Uranium Explorer Turns Focus to Greenland
By Jon A. Nones
15 Jan 2008 at 10:29 AM GMT-05:00
resourceinvestor.com
St. LOUIS (ResourceInvestor.com) -- The scramble for Arctic riches has primarily been for oil & gas in the frozen north – largely considered the last frontier for undiscovered oil. Yet a plethora of other minerals including gems, precious and base metals, energy metals and rare earth metals have also been discovered. One junior hopes to tap some of these less-sought-after resources on the vastly under-explored island of Greenland.
Upon agreeing to sell its 100%-owned Three Sisters Gold Project in Queensland in Dec. 2007, and changing its name from The Gold Company Ltd., Australia-based Greenland Minerals and Energy [ASX:GGG] has opted to focus its full attention on its flagship Kvanefjeld multi-element project located on the southwest tip of Greenland.
The company has an option agreement to acquire a 61% interest in the project - with additional options to acquire up to 100% - and hopes to tap into multi-element mineralisation high in concentrations of niobium, tantalum, beryllium, lithium, zirconium, sodium fluoride and perhaps most notably, uranium.
The Kvanefjeld Project has a JORC-compliant inferred resource of 112 million pounds of U3O8 and is open at depth greater than 300 metres and along strike. Other identified mineralisation includes beryllium 180,000 tonnes at 0.1% Be and lithium 235,000 tonnes at 600-1900 parts per million (ppm) in water soluble form.
“The project could be one of the largest undeveloped multi-element occurrences of uranium and rare earth oxides - beryllium and lithium - in the world,” said Marino G. Pieterse, editor of the Uraniumletter International, in a recent update.
Uranium is estimated to account for 20% to 40% of deposit's potential economic value. Pieterse noted that the current in ground value is approximately US$10 billion or just A$2.50 per pound U3O8 (fully diluted), and less than 10% of the mineralised complex has been drill tested to date.
The property itself comprises two exploration licenses, totalling 82 square kilometres, which cover mineralised and prospective parts of the intrusive Ilimaussaq Complex, first recognized in 1806. In 2003, the Nuclear Energy Agency reported that untested mineralised host rocks could add significantly to the above estimates.
The company drilled 10,000 metres for 43 holes in the 2007 season. Best intercepts to date include 66 metres at a grade of 0.084% U3O8 from 2-68 metres and 44 metres at 0.059% U3O8 from 13-57 metres. The longest intersection shows 232 metres at 0.053% U3O8 from the surface.
A new resource estimate is expected to be completed in the first quarter of 2008, significantly raising current estimates. Greenland Minerals has also budgeted an additional 25,000 metres of drilling for the 2008 season, and hopes to commence a pre-feasibility study early this year.
Permitting
Important to note the company’s license does not include uranium, and currently it is not possible to be granted a mineral license solely for the exploration of uranium in Greenland. However, certain conditions of the license allow for the exploration of multi-elements that encompasses uranium without specifying it.
Both the Bureau of Minerals and Petroleum (BMP) and Nuna Law have indicated that exploration and mining as a by-product of normal activities may be applied for. The BMP, under the Home Rule Government enacted by Denmark in 1978, is responsible for the management and all licensing of mineral resource activities in Greenland. Nuna Law is Greenland’s leading law firm.
Even though laws in Greenland relating to uranium exploration and exploitation are currently under review, the country has continued to issue exploration licences on historic uranium properties.
In Sep. 2007, Prime Minerals Limited [ASX:PIM] was issued three exploration licences in Greenland, which cover an area of approximately 800 square kilometres in close proximity to Kvanefjeld. The tenements contain a number of high grade multi-element occurrences, including uranium grading up to 45,500 ppm.
Infrastructure
Greenland, the world's largest island, is about 81% ice-capped. But as global warming melts Greenland's ice, it is exposing new mineral resources and opening shipping routes.
Virtually every city or other locations of interest in Greenland are within reach of airplane, helicopter or ship. Bulk cargo is transportable through a well-developed network of industrial harbours by a modern transport fleet, while helicopters can reach even farthest places for material and personnel transportation.
The Kvanefjeld project is located just 20 kilometres from Narsaq, a coastal town with infrastructure facilities and a deep water shipping port. Narsaq has a highly skilled population of 3,500 that can be recruited as a workforce.
Politics
Greenland is in the midst of renegotiating its relationship with Denmark, which has ruled the island since 1721. Talks were scheduled to conclude last year, but have stalled on questions over ownership of the island's oil and mineral resources. Denmark likes the current arrangement whereby they receive half of any royalties, while Greenland wants a greater share.
Greenland has a long history of being a favourable mining environment, extending far back into the country’s past. The Danish-Norwegian missionary Hans Egede had mineral resources on his mind when he reported the presence of graphite shortly after his arrival in 1721. However, up until only recently, no commercial mining had been done since 1990.
In 1991, the Mineral Resources Act was changed in an attempt to attract investment for renewed mineral exploration. Now, the government of Greenland sponsors an annual amateur mineral hunt called Ujarassiorit with a 25,000 DKK ($5,000) top prize to further encourage exploration in the country.
In the last few years, Greenland began rapidly granting exploration permits to Chevron [NYSE:CVX], Exxon Mobil [NYSE:XOM] and other energy giants looking for oil off the western coast, as well as junior miners exploring for zinc, lead, iron ore, coal, molybdenum, gold, platinum, niobium, tantalite, uranium and gems.
In July 2004, Crew Gold’s [TSX:CRU] Nalunaq gold mine commenced production, and was Greenland’s first gold mine and the first new mine to be developed in the country in over 30 years. The mine has been operating uninterrupted since, producing approximately 75,000 ounces gold in fiscal 2006.
In June 2007, Alcoa [NYSE:AA] won a contract to develop a 340,000-tonne aluminum smelter in Greenland, utilizing gushing glacial melt water to create hydroelectric power. The smelter will bring hydroelectric power to the area by 2012 and will begin operating by the end of 2014.
And in 2008, Angus & Ross's [AIM:AGU] Black Angel mine in Greenland, whose entrance hangs 600 meters above the sea on a steep cliff, is due to start producing lead and zinc. The company estimates there are at least 4 million tonnes of high grade lead and zinc reserves in the Black Angel mine.
Share Structure
Greenland Resources has about 193 million shares outstanding and 168 million options for a fully diluted market cap of A$433 million.
Shares are down 4 cents today at A$1.16, flat for 2008 so far and off 25% since late Oct. 2007.
Uranium is currently priced at $90/lb. |
