Chirundu Project

The Chirundu project occurs approximately 150km southeast of Lusaka by sealed road and is where the Company was able to identify an initial Inferred Resource in September 2006. Since that time African Energy has discovered the Gwabe uranium deposit some 20km to the northeast, and has outlined over 11.1 Mlb of U3O8 (5,035t) in combined resources at the two deposits.

African Energy committed to a bankable feasibility study which commenced in May 2008. During the past year, work on the project concentrated on further metallurgical test work to assess mineral processing paths, environmental baseline surveys and resource delineation drilling. A mining licence for the project was granted for an initial period of 25 years, commencing in October 2009.

The Chirundu feasibility study is based on an operation utilising open pit mining and sulphuric acid heap leaching of the uranium ores, with mining initially from the Njame deposit only, followed by Gwabe once Njame has been exhausted. Uranium will be stripped from the leach solutions by ion-exchange resins, followed by elution and precipitation to produce a granulated UO4 product suitable for export at an annual rate of approximately 1.2 to 1.4 million lb U3O8 equivalent over a 7-8 year project life. A centralised uranium processing facility at Njame will support the combined operations with loaded ion-exchange resins trucked from Gwabe to Njame for final processing and packaging.

Mineral Resources at Chirundu

During the year a programme of reverse circulation (RC) percussion drilling at Njame South discovered additional inferred resources containing approximately 2.4 Mlb U3O8 at an average grade of 250 ppm U3O8. On the basis of this programme a revised mineral resource estimate for the project was completed. Combined Measured and Indicated resources for the Chirundu project now contain 7.4 Mlb U3O8 at an average grade of 293 ppm U3O8,  with a further 3.7 Mlb U3O8 at an average grade of 237 ppm U3O8 in Inferred resources. This may be suitable for a 7-8 year mining project producing 1.2 to 1.4 Mlb U3O8 equivalent per annum.

Njame Resource:
Measured: 2.7Mt @ 350ppm U3O8 2.1Mlb U3O8
Indicated: 3.7Mt @ 252ppm U3O8 2.1Mlb U3O8
Inferred: 6.6Mt @ 240ppm U3O8 3.5Mlb U3O8
Total: 13.0Mt @ 263ppm U3O8 7.6Mlb U3O8
Gwabe Resource:
Measured: 1.3Mt @ 237ppm U3O8 0.7Mlb U3O8
Indicated: 3.6Mt @ 313ppm U3O8 2.5Mlb U3O8
Inferred: 0.8Mt @ 178ppm U3O8 0.3Mlb U3O8
Total: 5.7Mt @ 278ppm U3O8 3.5Mlb U3O8
Appropriate rounding has been applied

Metallurgical Test Work Results

Mintek Laboratories have been performing bench-scale metallurgical test work studies on the mineralisation from Njame and Gwabe as part of the feasibility study. During the year, column leach testing continued on Njame and Gwabe uranium mineralisation to establish baseline data from which optimisation programmes would be derived. Work to date has indicated that uranium extractions at Njame are quick and very efficient, reaching up to 95% recovery and consuming less than 5kg/t sulphuric acid. Gwabe mineralisation is more refractory, requiring an oxidative leaching step to achieve extractions of 75% uranium. Further column leach testing is required to optimise extraction rates and reagent consumption.

Environmental Baseline Surveys

A programme of environmental baseline surveys to determine the existing levels of all potential airborne, waterborne and in-situ contaminants in and around the project areas and local communities has been initiated. This includes analysis of surface waters and groundwater for heavy and trace elements, colliform (bacteria) levels, turbidity, pH and sulphate contents, an assessment of noise, dust and gas (radon, SO2, NO2) levels, and an assessment of heavy and trace element levels in soils. These surveys will be used as the basis for an updated Environmental Impact Statement, as well as providing a baseline for future comparison. The entire baseline survey programme is managed by independent contractors.

Exploration Programmes in the Chirundu Project

Exploration in the Chirundu project concentrated on three prospects during the year, Njame South, Siamboka and Kabanana. At Njame South, a programme of RC percussion drilling outlined inferred resources containing 2.4 Mlb U3O8 at an average grade of 250 ppm U3O8, taking the total for the project to over 11 Mlb U3O8. Drilling at Siamboka was less successful, and no further work is planned at this prospect.

A programme of 18 RC percussion drill holes at the Kabanana prospect gave a best intersection of 4m @ 293 ppm U3O8. This prospect occurs at the contact between the Karoo sediments and the much older basement gneisses and schists. The mineralised intersection occurs close to the unconformity between the Karoo and the basement, and warrants further evaluation to determine if higher-grade unconformity-style uranium mineralisation is present. 3-D modeling of all exploration data for this project is underway to determine future work programmes.


 Location of the Chirundu Project in southern Zambia


 Location of the named prospects in the Chirundu project
in southern  Zambia