The National Instrument 43-101 resource at Laguna Salada was based principally on a one-metre thick layer of uranium-vanadium-bearing gravel that extends from surface to a maximum depth of only three metres. However, exploration that was undertaken after the resource estimate had been completed, revealed that the mineralization extends downward in channels below the average level of the gravel base. These extensions not only increase the contained volume of mineralization, but contain generally higher uranium-vanadium grades, that may result in the estimated cash-cost of production being even lower than for the near-surface material on which the preliminary economic assessment ("PEA") was based (see press release dated February 7, 2017).  

 

The Company's initial exploration was in areas where the gravel is exposed on surface and thus yields strong radiometric anomalies that were easily located in the field with a hand-held scintillometer. In adjacent areas where the mineralized gravel is covered by barren gravel, the radioactivity is masked and exploration for the deeper layer has been done through trenching, which is time consuming and expensive. Using vertical ET profiling, the Company has successfully located completely buried gravel-filled channels that correspond with relatively high grades from prior drilling. The ET profile shown in Figure 1 shows subtle depressions that define the base of the gravel-filled channels that are anywhere from 100 to 400 metres wide. These channels can be projected in the third dimension to yield a map that outlines a network of channels that have a similar geometry to present-day braided rivers. This is consistent with the origin of the gravel at Laguna Salada: it developed in a very extensive gravel plain formed from the erosion of the Andes mountains. 

 

This test work has proven that ET is highly effective as a tool to identify gravel-filled channels. Although the all-in cost of the survey was approximately US$3,500 per line kilometre ET would ideally be used to define the depth, location and orientation of channel features so that further resource expansion through trenching and/or drilling could be undertaken more efficiently and more cost-effectively. Even where channels are too deep for any contained uranium-vanadium to have potential to be commercially extracted, their location still provides valuable information that could be used to trace them into areas where they are less deeply buried - where they would constitute exploration targets.