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Resources Evaluation Nuclear Fuel Resources Boston October 13 – 14, 2010

Resources Evaluation Nuclear Fuel Resources Boston October 13 – 14, 2010. Jean René BLAISE. The evaluation of the uranium potential is an ongoing activity throughout the life of the mine, from exploration to development and production.

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Resources Evaluation Nuclear Fuel Resources Boston October 13 – 14, 2010

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  1. Resources EvaluationNuclear Fuel ResourcesBostonOctober 13 – 14, 2010 Jean René BLAISE

  2. The evaluation of the uranium potentialis an ongoingactivitythroughout the life of the mine, from exploration to development and production. Variousdecisions have to be made and will have important financial implications: - Halt or continuation of the exploration and developmentwork, - Opening of a new mine, - Increase of production capacity, - Shut-down of the miningoperations. Nuclear Fuel Resources – October 13-14, 2010

  3. Different stages of an ore reserve estimation • The resourcedatabase • The geological model • In situ resourceevaluation • Estimation of the recoverablereserves • Ranking of the reserves • Quality of the estimation • Classification of resources and reserves Nuclear Fuel Resources – October 13-14, 2010

  4. The Resource Database The Resource Databaseisestablished by the collection, verification, recording, storing and processing of the exploration data and forms the foundationnecessary for the estimation. The Resource Databasetypicallywillinclude : - geological data (e.g.lithology, mineralization, alteration, and structure), - survey data, - geophysical data, - geochemical data, - assay data, - rock quality - bulkdensity information. Nuclear Fuel Resources – October 13-14, 2010

  5. The Resource Database A Mineral Resource must have reasonable prospects of economic extraction. Consequently, preliminary data and information concerning a number of factors (e.g. mining, metallurgy, economics and social and environmentalsensitivity) willbecollected and assessedduring the estimation of a MineralResources. Nuclear Fuel Resources – October 13-14, 2010

  6. The Resource Database The establishment of a QA/QC program (Quality Assurance/Quality Control) of all data is essential during the establihmeny of a resourcedatabase. This program concerns: Data verification, drill samplerecovery, sample size, samplepreparation, analyticalmethods, the use of duplicates/blanks/standards, effects of multiple periods of data acquisition and consistency of interpretation in three dimensions. The results of the QA/QC program form part of the database and must berecorded. Nuclear Fuel Resources – October 13-14, 2010

  7. The Resource Database A databaseconsists of two types of data, primary data and interpreted data. Primary data are parametersamenable to direct physicalmeasurements. Examplesincludeassays, survey data, and geological observations. Interpreted data sets are derivations or interpretations of primary information. Examples are geological projections and block models. Nuclear Fuel Resources – October 13-14, 2010

  8. The Resource Database Todaymostdatabases are generallymaintained in an electronically-stored digital format. Hand-printed tables withwell-organized information mayalsoform a database. It isrecommendedthat data bestoreddigitally, using a documented, standard format and a reliable medium thatallows for easy and complete future retrieval of the data. Nuclear Fuel Resources – October 13-14, 2010

  9. Standardisation of the radiometric data Variations caused by the type of probe used Corrections related to measuring conditions in the drill holes Countinglosses Nuclear Fuel Resources – October 13-14, 2010

  10. Radiometry – Grade correlation Radiometrymeasured in drill holescannotassimilated to a grade: Only 2.1 % of the « gamma » are derivedfrom the Uranium group, the remaindercomesfrom Radium B (Pb 214) and C (Bi 214) A regressioncurvebetween the 2 variables canbeestablished and extrapolated to the wholeorebody. Nuclear Fuel Resources – October 13-14, 2010

  11. Radiometry – Grade correlation Nuclear Fuel Resources – October 13-14, 2010

  12. The ResourcesDatabase Grid of information (trenches, drill holes, miningworks, …) Data gridshouldberegular and properlylocated in regards to the trend size and the shape of the mineralization Information must support the wholemineralized area. Closerspacing to definegeostatisticalparameters. Nuclear Fuel Resources – October 13-14, 2010

  13. The ResourcesDatabase Geologicalprobingparameters Specificporosity Resistivity Neutron Scintillometry Theseparameterswillbeused for the interpretation of the geological model Nuclear Fuel Resources – October 13-14, 2010

  14. The Resource Database Geographical position of the measure: Topographicalsurvey of drill holes Holedeviationmeasurements Survey of the miningworks Nuclear Fuel Resources – October 13-14, 2010

  15. Geologicalinterpretation All geological information within the depositshouldbetransposedfrom plans onto sections (or vice versa) to confirmreliability and continuityusing all available data (drill holes, mine workings, etc.). Two directions of vertical sections (usually orthogonal) and plans shouldbeused to ensuremanualinterpretations are internally consistent. Nuclear Fuel Resources – October 13-14, 2010

  16. Geologicalinterpretation Geologicalinterpretationisfrequentlycompleted in a threedimensional(3D) computer environment. Computer assistedinterpretationsshouldbevalidated on plan and orthogonal section to evaluate the reliability of the geologicalinterpretation. Nuclear Fuel Resources – October 13-14, 2010

  17. Geologicalinterpretation Mineralizationmaybedefined or limited by somecombinations of featuressuch as structure, lithology and the alterationenvelope. Theselimits or boundariesshouldbeused to constrain the interpolation of grade or qualitywithin the model. Depositscan comprise more than one type of mineralization. The characteristics of each type willlikelyrequiredifferentmodeling techniques and/or parameters. Nuclear Fuel Resources – October 13-14, 2010

  18. Geological model Minimum components of a model Limits of the mineralized bodies atdifferentcut-offs Topographic surface Contours of mining (stopeoutlines, pit contours, …), if thereis active mining Nuclear Fuel Resources – October 13-14, 2010

  19. EconomicRequirements Cut-off grades used for resourcesevaluation are largelydetermined by reasonable long termmetalprice(s), millrecovery and capital and operating costsrelating to mining, processing,administration, amongothers. All assumptions and sensitivities must beclearlyidentified. Cut-off grade must be relevant to the grade distribution. The mineralization must exhibitsufficientcontinuity for economic extraction under the cut-off applied. Nuclear Fuel Resources – October 13-14, 2010

  20. Estimation techniques Methods range from polygonal or nearestneighborestimates, inverse distance to a power, variouskrigingapproaches (e.g. ordinarykriging, multiple indicatorkriging) through to more complexconditional simulations. The estimation uses methodsthatoperate on variables (grade, grade-thickness) in a 2 or 3 dimentionnalspace. Nuclear Fuel Resources – October 13-14, 2010

  21. In situ resourceevaluation Estimation obtained, within the enveloppe defined by the geological model, using an above background cut off No miningcut offs or constraints are applied to the geological estimation There is no change in time of this estimation without new data. Nuclear Fuel Resources – October 13-14, 2010

  22. In situ resourceevaluation Precision of the estimation The precision of the estimation of the geologicalresourcesis the sum of the relative variances resultingfrom the errors on each variable: Precision of the density Precision of the informingsamples Precision on volume Precision on the estimation of the mean value Nuclear Fuel Resources – October 13-14, 2010

  23. Estimation of recoverablereserves Due to the spatial variability of the quality of the ore, the overallresources are rarelyentirelymined. Recoverablereservesdepend on: The cut off defined by the costs The support of the selection unit The information ultimatelyavailableat the time of the selection. Nuclear Fuel Resources – October 13-14, 2010

  24. MiningRequirements Miningassumptions for a Mineral Reserve include: Continuity of mineralization, Methods of extraction, Geotechnicalconsiderations, Selectivity, Minimum miningwidth, Dilution, Percent mine extraction. Nuclear Fuel Resources – October 13-14, 2010

  25. Estimation of recoverablereserves Estimation methods: Service variable method Disjunctivekriging Uniform conditioningmethod Modelswithoutedgeeffect Conditionalsimulations Nuclear Fuel Resources – October 13-14, 2010

  26. Integration of technicalconstraints Open pit • Overburden • Pitslope • Wasteminingcost • Ore miningcost • … Nuclear Fuel Resources – October 13-14, 2010

  27. Integration of technicalconstraints Underground mining - Access to the block - Extraction cost - Ventilation - Dewatering - … Nuclear Fuel Resources – October 13-14, 2010

  28. Classification of resources and reserves ReasonablyAssuredResources (RAR) refers to uranium thatoccurs in knownmineraldeposits of delineated size, grade and configuration suchthat the quantitieswhichcouldberecoveredwithin the given production cost ranges withcurrentlyprovenmining and processingtechnology, canbespecified. Nuclear Fuel Resources – October 13-14, 2010

  29. Classification of resources and reserves ReasonablyAssuredResources (RAR) Estimates of tonnage and grade are based on specificsample data and measurements of the deposits and on knowledge of depositcharacteristics. ReasonablyAssuredResources have a high assurance of existence. Nuclear Fuel Resources – October 13-14, 2010

  30. Classification of resources and reserves InferredResourcesrefers to uranium, in addition to RAR, thatisinferred to occurbased on direct geologicalevidence, in extensions of well-exploreddeposits, or in deposits in whichgeologicalcontinuity has been established but wherespecific data, including measurements of the deposits, and knowledge of the deposit’scharacteristics are considered to beinadequate to classify the resource as RAR. Nuclear Fuel Resources – October 13-14, 2010

  31. Classification of resources and reserves InferredResources Estimates of tonnage, grade and cost of furtherdelineation and recovery are based on suchsampling as isavailable and on knowledge of the depositcharacteristics as determined in the best known parts of the deposit or in similardeposits. Nuclear Fuel Resources – October 13-14, 2010

  32. Classification of resources and reserves Prognosticatedresourcesrefers to uranium, in addition to inferredResources, thatisexpected to occur in deposits for which the evidenceismainly indirect and which are believed to exist in well-definedgeological trends or areas of mineralisationwithknowndeposits. Nuclear Fuel Resources – October 13-14, 2010

  33. Classification of resources and reserves Prognosticatedresources Estimates of tonnage, grade and cost of discovery, delineation and recovery are basedprimarily on knowledge of depositcharacteristics in knowndepositswithin the respective trends or areas and on suchsampling, geological, geophysical or geochemicalevidence as maybeavailable. Nuclear Fuel Resources – October 13-14, 2010

  34. Classification of resources and reserves SpeculativeResources (SR) refers to uranium, in addition to PrognosticatedResources, thatisthought to exist, mostly on the basis of indirect evidence and geological extrapolations, in depositsdiscoverablewithexisting exploration techniques. Nuclear Fuel Resources – October 13-14, 2010

  35. Classification of resources and reserves SpeculativeResources (SR) The location of depositsenvisaged in thiscategorycouldgenerallybespecifiedonly as beingsomewherewithin a givenregion or geological trend. As the termimplies, the existence and size of suchresources are speculative. SR are normallyexpressed in terms of uranium contained in mineable ore, i.e., in situ quantities Nuclear Fuel Resources – October 13-14, 2010

  36. Resources classification Nuclear Fuel Resources – October 13-14, 2010

  37. Resources classification Nuclear Fuel Resources – October 13-14, 2010

  38. ESTIMATION OF MINERAL RESOURCES and MINERAL RESERVES BEST PRACTICE GUIDELINES Adopted by CIM Council on November 23, 2003 www.cim.org/committees/estimation2003.pdf Nuclear Fuel Resources – October 13-14, 2010

  39. The JORC Code and Guidelines The JORC Code provides minimum standards for public reporting to ensure that investors and their advisers have all the information they would reasonably require for forming a reliable opinion on the results and estimates being reported. www.jorc.org/jorc_code.asp Nuclear Fuel Resources – October 13-14, 2010

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