COMPANY GEOLOGICAL RATIONALE

Curnamona Energy‘s exploration areas lie in the Lake Frome region of northeastern South Australia, which is a broad topographic depression bounded to the west, south and east by the Flinders, Olary and Barrier Ranges respectively (Figure 1). During the middle Tertiary period roughly 20-40 million years ago, the climate in this part of Australia was quite humid, and several major rivers flowed northwards from the Olary Ranges in broad incised valleys often several kilometres wide. As the climate changed the river valleys became choked with sand of the Eyre Formation and eventually they were buried beneath tens of metres of clay of the Namba Formation deposited in a vast ancient lake occupying all of the northeast corner of SA and beyond, that was a pre-cursor to Lake Frome and Lake Eyre. Three of these ancient buried river valleys, named the Yarramba, Lake Namba and Billeroo Palaeovalleys by geologists, have been recognised from drillholes in the southern Lake Frome region.

Figure 1 Click to Enlarge

After burial, water continued to move through sands within these palaeovalleys, following the hydrological gradient from south to north. This water carried oxygen and minute amounts of dissolved uranium that was weathered from the exposed uranium rich bedrock at the margins of the Lake Frome region, especially in the Mount Painter and Olary regions. The uranium thus introduced into the palaeovalley drainage systems remained in solution for as long as dissolved oxygen was retained. This situation is chemically termed oxidising conditions. Where these oxidised solutions came into contact with decaying leaf litter and woody debris while migrating through the palaeochannel sands, free oxygen was consumed. When all the oxygen has been used up the chemical condition is termed reduced. The uranium, no longer able to remain in solution, immediately became deposited in the porous sandy host sediments. The oxygen progressively destroyed the organic trash and the oxidation front over extended time tended to move slowly down the palaeovalley carrying the uranium with it, producing a characteristic roll front (Figure 2). Within the Curnamona Energy exploration area, the highly saline oxidising waters are generally moving in a northward direction down the palaeovalleys. Consequently it is likely that the process of uranium dissolution and precipitation is still continuing in the palaeovalley sands until the present day with potentially continual upgrading of the uranium mineralisation.

Figure 2 Click to Enlarge

The process of formation of roll front uranium deposits as described above is well known from earlier discoveries in the Tertiary basins of Wyoming, USA. As a consequence the geologically analogous Lake Frome region was explored in the 1960s and 1970s for similar styles of secondary uranium deposits and when the palaeovalley drainage systems were discovered they quickly became the focus of attention. Several significant discoveries were made at this time, including the Beverley deposit, which is currently being mined by in situ recovery methods, and the Honeymoon deposit, currently being developed by Uranium One, within the Yarramba Palaeovalley. Several other uranium prospects were also discovered including the East Kalkaroo and Yarramba deposits, and the more distant Oban deposit in a northern tributary, and the Goulds Dam deposit in the Billeroo Palaeovalley (Figure 1 & Figure 3).

Figure 3 Click to Enlarge

The Honeymoon uranium deposit lies roughly 18 km upstream (south) from the tenement boundary. Drilling by Uranium One has confirmed a resource of approximately 4,000 tonnes of uranium at Honeymoon. The deposit occurs at a depth of 100-120 metres in the basal sand, the lowest of three sand members that are separated by clay layers in the Eyre Formation (Figure 4).

Figure 4 Click to Enlarge

Field trials have established that uranium in the Honeymoon sand hosted deposit can be extracted via wells drilled from the surface by in situ recovery (ISR) technology, which is currently successfully employed at the Beverley uranium mine (Figure 5). The ISR extraction process for uranium does not involve any major physical disturbance to the environment, as in a normal mining operation. Solution mining is a closed system method in which a weak chemical leach solution is sent down injection wells to dissolve the uranium from the hosting sands and the resulting solutions are then pumped to the surface via production wells where the uranium is chemically extracted (Figure 5).The leach solution is then chemically reconditioned and recirculated through the wellfield and process plant in a continuous closed cycle of leaching and uranium recovery until production falls below economic levels. The method has been used very successfully at Beverley and has been endorsed by Government research organisations as meeting acceptable environmental standards. The uranium in solution is in relatively low concentrations and care is taken to ensure it is not mixed with waters in other parts of the palaeochannel aquifer. Water quality in the lower parts of the palaeochannels in this area is invariably very poor, having a high total dissolved salt content (often including uranium and other heavy metals), rendering it unsuitable for human or animal consumption.

Figure 5 Click to Enlarge

EXPLORATION PROJECTS

Widely spaced drilling for sand-hosted uranium mineralisation was conducted over a large portion of Curnamona Energy’s land holdings more than thirty years ago. This drilling identified many promising uranium prospects, both within the Yarramba and Lake Namba Palaeovalleys and also in the blanket sands to the north, including Oban, Jack’s Reward, Yalkalpo and Bingelly (Figure 6). This era of drilling also discovered the Honeymoon and Goulds Dam uranium deposits operated by Uranium One. Curnamona Energy has confirmed many of these earlier uranium anomalies with its own drilling, and in several cases has identified extended areas of uranium mineralisation that warrant detailed follow up drilling.

Figure 6 Click to Enlarge

Curnamona Energy has concentrated its main exploration effort over the last two years on its flagship Oban project, where the most promising initial drilling results were obtained, resulting in definition of a 2,100 tonne inferred uranium resource that has been defined by 385 drillholes. Much of the country around Oban and to the north is very sandy and difficult to access by conventional drilling equipment, which accounts for the limited earlier drilling in the area, and subsequent lack of follow up of earlier uranium anomalies. This has necessitated Curnamona Energy acquiring its own all wheel drive drilling and logging equipment in order to be able to operate effectively and efficiently in this remote and sandy semi-desert terrain.

The exploration methodology of mud drilling and gamma ray downhole logging normally employed to locate concentrations of radioactive minerals in the palaeochannel sands is well proven and has been shown to be extremely effective in the discovery of uranium deposits in the Curnamona Province. Consequently the largest proportion of Curnamona Energy’s exploration budget to date has been spent on such exploration activities.

Oban project

Yarramba Palaeovalley drainage system

Mongala section

Yantawena tributaries

Lake Namba Palaeovalley drainage system