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Communiqué

Exploration at Shea Creek Going Underground

These tents house the core drilling samples at the Shea Creek project.

Extensive drilling at AREVA’s Shea Creek project has shown impressive results to date. A number of mineralized zones have been identified, many of them high grade. Now AREVA Resources is preparing a project description to take exploration to the next level – underground.

The Shea Creek project, 51% owned and operated by AREVA Resources and 49% owned by joint venture partner UEX Corporation, is located in the western Athabasca Basin, about 20 km south of the former Cluff Lake mine. It was discovered in the 1990s during exploration for additional resources in the Cluff Lake area. The Anne deposit was found in 1995 and the Colette deposit in 1997. Depressed market conditions in the late 90s stalled exploration, but with the rebound in uranium prices came renewed investment in Shea Creek. The payoff came during the 2004-2005 drilling season, when the Kianna deposit was discovered.

Exploration drilling goes on day and night.

While surface drilling has been successful, the depth of the ore body makes underground exploration essential to gaining a better understanding of the deposits. “Exploration drilling of targets more than 700 metres deep from the surface is extremely challenging as well as relatively slow,” explains François Brisset, vice president of exploration. “It is also not accurate enough, especially when dealing with mineralization associated with vertical structures, which represent a significant portion of the deposits.” The proposed shaft will be located between the Anne and Kianna deposits.

This will provide underground access via horizontal exploration drifts to both deposits, as well as the highly prospective corridor between them.

“The exploration shaft and drifts will allow much more efficient drilling programs and much more reliable delineation and evaluation of the deposits, with hopefully a substantial increase in size,” Brisset says.

Underground access will also provide a better understanding of potential mining conditions. For example, there are indications that large parts of the Kianna and Anne deposits might have better ground conditions and less chance of water inflow than other major deposits in the Athabasca Basin. This means that freezing of the rock walls during mining may not be required, but we will not know for sure until the exploration shaft and drifts are developed.

Grégoire André, geologist from the Mining Business Unit Paris office, measures core samples at the Shea Creek exploration camp.

The proposed shaft will have a vertical depth of approximately 950 metres. Depending on regulatory approvals, construction could begin in 2010. It would take about three years to complete and cost approximately $100 million. Once the shaft is done, it will take another three to four years to complete underground exploration in that area. At that point, if the resource is proven to be economically viable and environmental approvals are granted, transition to actual mining could begin.

“Shea Creek has the potential to become one of the big ore bodies in the Athabasca Basin, but we won’t really know until we can sink the exploration shaft,” says Vincent Martin, AREVA President and CEO. “There is still a lot of work to do, but I see Shea Creek as one of Saskatchewan’s next generation of ore bodies.”