Zarechnoye Mine
Zarechnoye is an operating in situ recovery uranium mine located in the Syr-Darya basin in the Otrar region, South Kazakhstan province, approximately 200 km west of Shymkent and 450 km southeast of Kyzylorda, Kazakhstan. The mine is owned by the Zarechnoye joint venture, a Kazakh registered joint stock company in which Uranium One has a 49.67% interest. The remaining shares in this company are owned as to 49.67% by JSC NAC Kazatomprom, Kazakhstan’s state-owned company responsible for the mining and exporting of uranium, and 0.66% by an affiliate of the government of Kyrgyzstan.
Production
The mine covers two deposits, Zarechnoye Main, which is in production, and Zarechnoye South, which is under development.
Pilot production at the Zarechnoye mine commenced on January 30, 2009. The production was entirely from the Zarechnoye Main deposit.
Pursuant to the terms of its subsoil use contract, the current production capacity of the Zarechnoye mine is 2,522,000 lbs U3O8 (970 t U) per year. It is expected that the annualized rate of production will reach this level in 2012.
Uranium is extracted at the Zarechnoye mine using the in situ recovery method, and processed using ion exchange technology at the processing facility on site.
Most recently, in 2011, the Zarechnoye mine produced 1,908,200 lbs U3O8 (734 t U), of which 947,900 lbs U3O8 (365 tonnes U) was attributable to Uranium One.
Mineral Resources and Mineral Reserves
The following table sets out the mineral resource and mineral reserve estimates for the Zarechnoye mine as at December 31, 2011.
|
ZARECHNOYE MINE (as at December 31, 2011) |
Ore (000s tonnes) |
Grade (% U) |
Tonnes U |
Grade (%U3O8) |
U3O8 (000s lbs) |
||
|
Reserves |
100% |
100% |
49.67% |
|
100% |
49.67% |
|
|
Proven |
22,900 |
0.005 |
1,160 |
576 |
0.006 |
3,000 |
1,490 |
|
Probable |
29,500 |
0.023 |
6,690 |
3,323 |
0.027 |
17,400 |
8,643 |
|
Proven and Probable |
52,400 |
0.015 |
7,850 |
3,899 |
0.018 |
20,400 |
10,133 |
|
Resources |
|
|
|
||||
|
Measured |
7,600 |
0.027 |
2,000 |
993 |
0.032 |
5,200 |
2,583 |
|
Indicated |
18,300 |
0.054 |
9,900 |
4,917 |
0.064 |
25,700 |
12,765 |
|
Measured and Indicated |
25,900 |
0.046 |
11,900 |
5,911 |
0.054 |
30,900 |
15,348 |
|
Inferred |
11,600 |
0.047 |
5,500 |
2,732 |
0.055 |
14,300 |
7,103 |
Notes:
(1) Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Inferred Mineral Resources have a great amount of uncertainty as to their existence and as to their economic feasibility. Under no circumstances can it be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher Mineral Resource category or converted to Mineral Reserves.
(2) The foregoing Mineral Resource and Mineral Reserve estimates are taken from the report titled “Technical Report on the Zarechnoye Uranium Mine, Kazakhstan” dated February 27, 2012 (as amended May 2, 2012), prepared for Uranium One by Roscoe Postle Associates Inc. and are subject to the methods, parameters, assumptions, qualifications and procedures which are set out in such report. For a complete description of such methods, parameters, assumptions, qualifications and procedures, reference should be made to the full text of the foregoing reports, which is available for review on SEDAR under Uranium One’s profile located at the following website: www.sedar.com. Mineral Resources and Mineral Reserves are reported in accordance with Definition Standards on Mineral Resources and Mineral Reserves adopted by the Council of the Canadian Institute of Mining, Metallurgy and Petroleum and National Instrument 43-101 – Standards of Disclosure for Mineral Projects promulgated by the Canadian Securities Administrators.
(3) The second column for “Tonnes U” and “U3O8” represents the portion of total Mineral Reserves and/or Mineral Resources notionally attributable to Uranium One’s equity interest in the joint venture through which the property is owned in the percentage indicated in this column.
