Ablation Joint Venture

Ablation was patented by Ablation Technologies LLC (“ABT”), a company based in Wyoming, USA. It is a low cost method of separating uranium mineralisation by applying a physical, grain-size separation process, to ore slurries. No chemicals are added in the process, yet very high mineral recoveries can be achieved with considerable mass reduction, using grain-size classification to separate a high-value, high-grade ore product from a coarse-grained barren “clean sand” product. Application of Ablation is expected to have a very positive effect on the development of many uranium deposits, globally, because it is expected to significantly reduce both the capital and operating costs for many projects; while timelines to obtain mine permits may also be reduced.

Extensive testwork has shown that, from amenable sandstone-hosted uranium ore types, typically more than 90% of the uranium mineralisation can be separated into 10-20% of the initial sample mass. Recent development work on a secondary upgrade circuit has seen recoveries in test work exceed 99%.

In April 2012 Black Range released the results of a scoping study that indicated the best way to develop its Hansen/Taylor Ranch Uranium Project is to utilise underground borehole mining and Ablation. The scoping study demonstrated the robust nature of the chosen development scenario, with estimated operating costs of approximately US$30/lb U₃O₈ and capital costs, based on off-site uranium milling, estimated to be less than US$80 million.

Shortly thereafter, in light of the substantial benefits of utilising Ablation at the Project, while also recognising the potential to apply this process elsewhere, Black Range reached agreement with ABT to jointly commercialise the Ablation process. Black Range and ABT agreed to establish the Ablation JV, with Black Range agreeing to fund commercialisation. The Ablation JV holds the rights to utilise Ablation at all mineral deposits (not just for uranium), globally.  Applications of Ablation other than for uranium are yet to be assessed, but it is anticipated that additional opportunities could arise.

Testwork and Commercialisation

Abundant testwork, on samples from numerous sandstone-hosted uranium deposits around the world, has confirmed that Ablation will have widespread applications. The Ablation JV is advancing negotiations with numerous parties that have successfully commissioned first-pass test work on samples from their deposits, whom are now interested in undertaking more extensive field trials. These opportunities provide the Ablation JV potential near-term revenue streams.

5tph Unit

During the 2013 December quarter, the Ablation JV initiated testwork with ore in the semi-commercial scale Ablation Unit it has been constructing in Casper, Wyoming, which has nominal capacity of 5tph (“5tph Unit”).

Ore from the October stockpile in western Colorado was mixed with water to prepare slurries that comprise 15-20% solids – the optimal slurry density for the 5tph Unit.

Multiple batches of slurry were used to run tests in the 5tph Unit; each time modifying specific parameters of the operating system slightly to facilitate performance optimisation.

In all cases preliminary analytical results indicate that greater than 90% (and up to 94.5%) of the uranium in the ore has been separated into the finest size fractions following Ablation. Initial tests suggest that recoveries can be further improved, potentially to 97-98%, with secondary separation. This bodes extremely well for commercial scale Ablation operations.

Furthermore, the initial performance of the 5tph Unit is even more encouraging because the residence time to achieve these results was considerably less than anticipated. Indeed, the Ablation process was so effective in the 5tph Unit that only one of the three available Ablation modules was needed to achieve >90% recoveries (the other two Ablation modules were bypassed). This indicates that, as expected, the higher energy of the 5tph Unit (compared to that available in the pilot plant) is dramatically improving the efficiencies of the Ablation process. As such it is probable that throughputs in excess of the nominal target of 5 tonnes per hour can be achieved with the “5tph Unit”. Furthermore it provides the Ablation JV further confidence that it should be possible to commercialise Ablation in the near-term.

Following this initial testwork the Ablation JV has been further refining the design and operation of the 5tph Unit. The design of the piping and hosing is being modified slightly to compensate for increased wear that has been observed when operating the 5tph Unit with high energies.

Preliminary tests have also commenced utilising a prototype “air ablation” system (that operates in dry conditions rather than utilising a wet slurry). Extremely encouraging initial results have been returned. Further testwork continues.

Goviex Madaouela Project

In December 2013, Black Range announced that the Ablation JV has undertaken extensive testwork on the amenability of ore from GoviEx Uranium Inc.’s (“GoviEx”) Madaouela Project in Niger to Ablation. The Madaouela Project comprises a series of sandstone-hosted uranium deposits that contain Canadian National Instrument 43-101 (NI 43-101) mineral resources of 39.7 Mt at 0.14% eU3O8, for a total of 122.3 million lbs of U3O8.

The Ablation testwork was overseen by the independent international consulting company, SRK Consulting (UK) (“SRK”). SRK subsequently prepared a NI 43-101 Technical Report for GoviEx on the proposed development of the Madaouela Project.

Black Range advised that GoviEx had recently issued a letter to its shareholders advising that the preferred development plan for the Madaouela Project includes the use of Ablation (see http://www.goviex.com). GoviEx’s development plan envisages annual production at an average rate of 2.53Mlb of U3O8 per annum, with life of mine production of 45.6Mlb of U3O8 over 18 years.

The Ablation JV is extremely pleased that an independent third party has publicly acknowledged the considerable benefits that Ablation affords the conventional uranium mining industry, and continues to be very encouraged that Ablation can be commercialised in the near-term.