Salamanca I

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Figure 1 - Retortillo Area

 

Figure 2 – Salamanca I Airborne Radiometrics

 

Figure 3 – Retortillo Geology and Drill Holes

 

Figure 4 – Santidad Geology and Drill Holes

 

Figure 5 – Zona 7 Airborne Radiometrics and Drill Holes

 

Salamanca I is 100% owned by Berkeley and is in the main historic uranium mining district, approximately 25km northeast of the Águila Area. Salamanca I includes the Retortillo and Santidad deposits and covers an area of 182,560 ha and includes several other untested areas of uranium mineralisation and radiometric anomalies. The Retortillo and Santidad deposits are only a few kilometers apart within the same stratigraphic horizon. Zona 7 is located 4 km to the north.

Berkeley has commenced a Feasibility Study on the Salamanca Uranium Project which will address the potential for sourcing feed for the Quercus Processing Plant from Retortillo.

Berkeley commenced drilling at Retortillo in December 2006.  Since then, the Company has calculated JORC compliant inferred and indicated resources for the area totaling 22.5 Mlbs (10.2 Kt) of U₃O₈ as detailed below:

At a 200ppm U₃O₈ cutoff, total inferred and indicated resources are:

Including the following indicated resources:

Full details of the latest resource estimate are available in the Company's ASX Announcement dated 19 November 2007 (PDF, 644KB) and ASX Announcement dated 26 February 2010

In February 2008, Berkeley released the results of a Scoping Study on mining Salamanca I.  The study was prepared by AMC Consultants and confirmed the potential economic viability of the project.

The Study, which was based upon the initial Inferred and Indicated Mineral Resources of 16.9 Mlbs of U₃O₈ included the following outcomes:

• Potential production of approximately 12.1 Mlbs U₃O₈ over 10 years
• Average cash operating costs of US$25 per lb of U₃O₈
• Initial capital costs totaling US$109m for a plant rated to process 1.5mtpa. The plant design has been scaled to allow for potential future additional resources
• Legal review confirms no impediments to mining
• Environmental review confirms no foreseeable major impediments to mining
• Good potential to improve financial and operating parameters in a number of areas, including utilising truck or radiometric sorting.

Further details of the Scoping Study are available in the Company's ASX Announcement dated 14 February 2008 (PDF, 456KB).

In late 2007, Berkeley conducted a helicopter airborne radiometric and magnetic survey over the Salamanca I area. The survey comprised 3,336 line kilometers flown by an internationally recognized contractor on 100m spaced north-south lines using a towed magnetic sensor at a nominal height of 35m with a spectrometer inside the aircraft.

The survey confirmed and extended the potential to add additional uranium resources in outcropping and covered areas in proximity to the existing resources.

In particular, it has significantly enlarged target areas associated with known uranium mineralization at the Zona 7 deposit, and at two previously mined areas, Mina Caridad and Mina Cristina. It has also identified covered extensions of favourable lithology along strike from the Retortillo and Santidad deposits.

Further details of the Aerial Survey can be found in the Company's ASX Announcement dated 5 February 2008 (PDF, 1.7MB).

The Retortillo Deposit

The Retortillo Deposit was previously drilled by the Junta de Energia Nuclear ("JEN") and ENUSA. Berkeley has subsequently drilled 72 diamond and RC holes at Retortillo.

The original JEN drilling was restricted to the northwestern end of the deposit on a 50 x 50m grid. After some verification drilling ENUSA initially extended the deposit to the southeast on a 50 x 50m grid. This phase was followed by further ENUSA drilling to the southeast and along the deposit margins on a 100 x 100m grid with final stage step-out drilling at 200m centres to the southeast.

Berkeley's drilling in 2007 (essentially diamond) had three objectives: verification drilling at 50m centres on selected traverses; extension drilling to the southeast along traverses spaced at 100-200m intervals, which has extended mineralisation by 400m; and targeted testing for geological continuity and structural and lithological controls, particularly along the northern edge.

This work defined the limits of the deposit, established geological continuity of mineralisation and provided significant insights into the styles of uranium mineralisation and their possible controls. Interestingly, Berkeley's verification drilling generally improved grade and thickness, and also revealed some significant inconsistencies in the historical data. As a result, a more uniform data base, largely based on Berkeley drilling and additional RC drilling, is required before any additional upgrade of resource categories.

Retortillo consists of two main blocks of mineralisation separated by the Retortillo Creek. The northwestern block lacks Tertiary cover and mineralisation has been affected by weathering and erosion. The adjacent area of the southeastern block has been similarly affected by weathering, due to a lack of cover. However, the presence of Tertiary cover from grid line 60E is associated with better development of supergene mineralisation. This cover increases to a maximum of around 30m in the southeastern parts of the deposit.

The top of the uranium mineralisation is associated with the uppermost appearance of sulphides and is generally sharp, horizontal and within 24m of the surface. The base of mineralisation is irregular and sometimes associated with the base of partial weathering. Mineralisation is associated with hydrothermal sericite, pyrite +/- chlorite alteration and averages 15.5m in thickness.

Primary uranium mineralisation consists of pitchblende, coffinite and black oxides incorporated into the main steeply dipping schistocity. A secondary enrichment of dominantly autunite and minor torbernite occurs as an upper sub-horizontal layer. Petrographically, uranium mineralisation is in the form of pitchblende with very minor coffinite; secondary autunite-series mineralisation is also present. Primary uranium mineralisation often coats pyrite grains and occurs within fractures in pyrite.

The Santidad Deposit

The Santidad deposit is located within the same package of regionally and thermally metamorphosed Ordovician metaphyllites and located 3 km to the northwest of Retortillo. The metaphyllites contain numerous granitic and pegmatitic sills and bodies and anomalously large chiastolitic blades of andalusite, indicating closer proximity to the main Banobarez granodiorite complex which outcrops to the SW. Erosion appears to have stripped the Tertiary cover from all of the areas tested to date, which may explain the strong supergene character of the mineralisation.

Testing of the Santidad radiometric anomaly with 87 RC and diamond holes has identified relatively shallow secondary uranium mineralisation over a strike length of 1.75 km and widths usually in the range of 100-200 m. It is open along strike in both directions. Drill traverse spacing is generally 50-100m with holes at 50 m intervals. The main block of mineralisation is geologically continuous over a strike of 1.2 km. The only visible uranium minerals are autunite and torbernite facies, however detailed mineralogical studies are in progress.

RC drilling accounts for about 95% of drilling to date and logging of chips indicates that most mineralisation occurs within the oxidised zone, close to the interface with fresh rock. The average depth to the top of mineralisation within the resource envelope is 8.8 m and it averages 12.6 m in thickness.

The Zona 7 Deposits

The Zona 7 deposit occur are located approximately 5km north of the Santidad deposit and consist of the significant Zona 7 deposit (3.5 Mlbs at 414 ppm U₃O₈) and a cluster of small deposits in close proximity (Las Carbas, Caridad and Cristina). All Mineral Resources are Inferred and total 5.7 Mt at 421 ppm for 5.3 Mlbs (2.4 Kt) U₃O₈.

The host rocks are PreCambrian chlorite-sericite schists, slates, quartzites and conglomerates and uranium mineralisation appears to be controlled by both structure and supergene enrichment.  Berkeley carried out a significant amount of drilling in this area in 2008 (5 Diamond and 178 RC holes).

Exploration Potential

The Salamanca I area has high potential to add further resources in the ongoing exploration program.

The Retortillo/Santidad stratigraphy remains untested for approximately 3.5km along strike to the northwest of the Santidad deposit, before it is truncated by granite and much of this extension is covered by Tertiary. The stratigraphy is also untested for approximately 1km to the southeast, before it meets the Rio Yeltes.

Additional drilling is also planned to test the area about 300 m to the northeast of the Santidad deposit, where further strong ground radiometric anomalies occur on the northern limb of the synclinal structure. Initial scout drilling in the area has encountered Santidad style uranium mineralisation.

At Zona 7 there is potential for significant additional resources and the anomaly appears to continue for several kilometers to the northeast and link to the previously mined La Cristina deposit.

Future drilling and exploration at Salamanca I will also benefit from the airborne survey conducted in 2007. The survey has confirmed and extended the potential to add additional uranium resources in outcropping and covered areas in proximity to the existing resource base.

In particular, it has significantly enlarged target areas associated with known uranium mineralisation at the Zona 7 deposit, and at the two previously mined areas, Mina Caridad and Mina Cristina. It has also identified covered extensions of favourable lithology along strike from the Retortillo and Santidad deposits.