Drill Campaign Could Re-ignite Utah Uranium Mining Boom
Talk about lousy timing. In the summer of 1980, exploration
manager Clancy Wendt, then working for Phillips Uranium, a
subsidiary of the oil company, had three rigs and a crew
drilling mile centers in Utah's Thomas mountain range. They
drilled between 60 and 70 holes, over every square mile, looking
for altered versus unaltered rock to indicate uranium. One of
those drill holes encountered 0.05% U3O8 over a 100-foot
thickness at a depth of 900 feet. Shortly thereafter, Clancy
Wendt was transferred to the company's minerals division,
Phillips drilled a few more holes, and oh, by the way, there had
been an accident about 2,000 miles away near Middletown,
Pennsylvania, at a place called Three Mile Island. Utilities
stopped building reactors and the uranium exploration business
came to a grinding halt.
Phillips Petroleum got out of the minerals business, and Clancy
Wendt went on to discover the Mt. Hamilton gold deposit in the
Carlin Trend for another company. But that drill hole about 150
miles southwest of Salt Lake City never stopped bugging him.
"When you find something, you always remember that," Wendt told
StockInterview.com. "I was working with it day and night. That
was my project." And it is his project again today.
After a twenty-odd-year hiatus, Wendt staked 540 acres of the
property, which had been abandoned, and then optioned the 27
claims to Max Resource Corp (TSX: MXR; OTC BB: MXORF) for what
both parties called a reasonable sum. Since then, Max Resource
Corp staked around those claims, and increased the company's
land position to 195 lode claims comprising 3,900 acres in the
Thomas Mountain range. "We staked the entire caldera rim," Wendt
explained, "because that is exactly where I think the uranium is
going to be, within that rim or within the moat inside that
rim." Wendt is now the vice president of exploration for Max
Resource Corp.
Max Resource Corp President Stuart Rogers is quite thrilled with
the upcoming exploration of the caldera rim that he hopes will
yield an economic grade of uranium, "It's felt that the caldera
was the source of the mineralization for the nearby Yellow Chief
uranium mine." A caldera is a large crater formed by volcanic
explosion or by the collapse of a volcanic cone. "This is one
that didn't get on the radar screen because it just had the one
ore grade hole on it before they stopped exploration," Rogers
explained about the PPCO claims. "Clancy was one of the few guys
who knew about it."
The Geological Significance
Who would have remembered Utah's Yellow Chief, a uranium mine
defunct since the early 1960s? It was a small producing open pit
mine of less than 100,000 metric tons with a grade of 0.20 -
0.23 percent U3O8 in the middle of a desert in a mountain range.
Delta, the closest town, is 20 miles away with a population of
3209, according to the last census. Uranium might be the last
thought on anyone's mind. About 1.5 miles west at Spor Mountain
is the world's largest economic beryllium deposit, owned by
Brush Wellman (NYSE: BW).
Like enriched uranium, beryllium is high up on the U.S.
government's classified list. Beryllium is a strategic material
used in most sophisticated U.S. weapon systems, used to control
reactors on nuclear powered submarines and surface vessels, as a
triggering device for nuclear warheads, and used in guidance,
optical and satellite systems for which there are no substitute
metals. Needless to say, there probably won't be much
environmental challenge in Utah for uranium mining. Clancy Wendt
observed, "This is an area that is well known for mining. They
all want mining to happen. It helps the community. The Brush
Wellman mine runs all year long."
Back to the Yellow Chief mine. Discovered by prospectors in
1953, the ore zone was outlined by rotary drilling in 1955 and
open pit mining of tabular ore lenses began in 1959. Most of the
ore was mined by 1962. Stuart Rogers explained, "Most people
agree the Yellow Chief stopped production because mineralization
was faulted off to the east." And that is the direction where
Max Resource Corp is going.
Wendt explained the geology of the caldera, "The age of the
mineralization is very young, when compared to uranium in
Wyoming. It's between 27 and 34 million years. It's found within
the caldera ring of the vent within a major vent, which is 40 to
50 miles across. Right at the edge of the circle (it stands out
just like a circle on a topography map or land sat image), is
where we found the mineralization." Wendt added, "It is
postulated that this vent was the source rock for the Yellow
Chief sediments. I am hoping a great deal of the ring itself
will be mineralized because that's a nice conduit area. It's an
area that's going to be permeable because it's along the ring
fracture of the major vent."
David A. Lindsay of the U.S. Geological Survey (Denver) who has
written extensively about mineralization in western Utah, wrote
in a 1978 report, where Yellow Chief was mined and where Max
Resource Corp plans to drill, "Uranium occurs in four diverse
settings in the Thomas Range:
1. In tuffaceous sandstone and conglomerate at the Yellow Chief
mine, 2. In beryllium deposits in water-laid tuff, 3. In
fluorspar pipes, and 4. In veinlets of opaline silica in
volcanic rocks of all ages."
Wendt, who has talked with Lindsay about the geology at Thomas
Mountain, said this about the beryllium tuft, "The
mineralization found in our drill hole, I think, is in the
beryllium tuff unit. If it is not that unit then it is probably
the source." Wendt also explained that background or trace
values might be present, but economic values of beryllium would
be very unusual. Ore occurs in tuffaceous sandstone that has
been correlated with the tuff that hosts beryllium deposits
nearby.
Another indicator mineral suggesting uranium mineralization came
about by accident on the first pass two decades ago. "When I
drove up in my truck and I started walking toward the drill
rig," Wendt remembered. "I thought for a minute the drillers had
been dumping cottonseed hulls. (Drillers sometimes use
cottonseed hulls to plug up formations that might suck up
water.) Instead of hulls, I'm looking at this long line of black
quartz crystals on the rocks." Smoky quartz, or black quartz,
crystals are formed through natural radiation coming from nearby
uranium deposits. That confirmed for Wendt that a uranium
deposit was in the vicinity. "It's not an indicator mineral in
all systems, but it is in this one," said Wendt.
Reverse Circulation Drilling Could Increase Grade
Asked if he would find uranium during this month's drill
program, Wendt chuckled after answering "Yep." Why is he certain
he would when most geologists pause on questions asking for a
guarantee? "Because I found it there before," Wendt laughed. "If
I hadn't drilled the hole there before, I would waffle, too.
After the first hole, I don't promise any guarantees. That's the
one I drilled." Why test what was once drilled in 1980? "We're
going to re-drill to confirm the hole so that it complies with
National Instrument 43-101," Wendt explained. "Secondly, we want
to get a good sample that we can assay."
His comment about getting a "good sample" to assay opened the
door to the previous drilling, which was mud rotary style. Wendt
explained how mud rotary drilling was done over 25 years ago at
the present site:
"You would dig two pits, like baby swimming pools, next to each
other, and fill both of them up with water. The rig would start
drilling a hole. Out of the hole would come the material that
you're grinding. It would go in the first pit, which would be
the settling pond for any of the material coming out of the
hole. Material would then flow over into the next hole where
you've got your intake hose pumping the water back down into the
hole. You would catch your sample coming out of a pipe with a
colander (just like you would for a salad or spaghetti). You
would catch up the ground up material, and dump a lump of it on
the ground every five feet, building 20 piles of material in a
row - that's a hundred feet. And you would just keep plopping
them down. When you got to whatever depth you were going to do
it to, you would stop."
Wendt agreed this was not a very scientific method in
determining grades. "When you dumped it on the ground, you
really didn't get a great sample for assay," he laughed. "You're
only getting the chunky material. Any of the "real fine"
material" would go through the colander. Wendt is optimistic
about establishing a more accurate grade from the upcoming drill
program, "It should come in higher." How will reverse
circulation provide a different grade? "With reverse circ, you
are sucking the material right up out of the center of the
pipe," Wendt emphasized. "You are not losing the fine material."
Another reason for reverse circulation is Wendt believes the
system is "probably 6-7 million years old and in
disequilibrium." He clarified, "This means that you have a
reading on the electronic probe that may give you a lower
reading than is really there." Lindsay's geological survey
report points in the same direction, "Mineralogical and
geochemical studies of the (water-laid) tuff have shown it is
extensively zeolitized, leached of alkali metals, and likely to
have been leached of uranium by ground water, so that the tuff
is a possible source for the uranium at the Yellow Chief mine."
The historic grade at the Yellow Chief was 0.2 percent. How
would Clancy Wendt feel if the new drilling brought in 0.2? "If
I had 100 feet of 0.2, then I'm in heaven. I would have over
$100 in my rock. That would be like drilling 100 feet of 0.3
gold. Would that attract anyone?" He knows it would. Perhaps the
timing was bad for Phillips Uranium, but just perfect for a very
patient Clancy Wendt and Max Resource Corp. As a side note, and
a possible parallel, there's now an oil rush in central Utah,
according to Associated Press in Salt Lake City. It appears a
tiny Michigan-based oil and gas exploration company triggered
the "oil rush" after a wildcat strike. Before then, the region
had a history of frustrating oil exploration. Will a uranium
discovery by Max Resource Corp trigger a 1950's style uranium
boom in western Utah?
On July 6, 1952, Charlie A. Steen struck the biggest deposit of
high-grade uranium ore in the United States on the other side of
Utah. School teachers, insurance brokers, used car salesmen, and
shoe clerks around the nation rushed to Utah to seek their
fortune. A group of high school students staked forty claims,
later selling them for $15,000. Within a few years, nearly six
hundred producers were shipping uranium ore. Employment in the
industry topped 8,000 workers in the mines and mills. Salt Lake
City was dubbed "The Wall Street of Uranium." The boom ended in
1964 when the Atomic Energy Commission announced, "It is no
longer in the interest of the Government to expand production of
uranium concentrate." A lot has changed over those three decades.
Since 2001, spot uranium has jumped by more than 500 percent.
Accompanying the new uranium upswing, many of the old projects
in Wyoming, New Mexico and elsewhere are being revived.
According to a USA Today article published in mid January, "...a
new generation of prospectors is staking thousands of claims in
the desert Southwest." The Utah Geological Survey said more than
6,000 uranium claims were filed in 2005. Max Resource Corp's
uranium project in Utah may be one of those worth investigating.