Uranium Exploration Forms A JV With Newcrest

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By Greg Peel

One thing about uranium is that it is rarely ever found completely on its own. In fact rarely is any metal oxide found in isolation, and hence it is common for one mine project to produce combinations of metallic elements. To that end it is also not uncommon to find uranium alongside copper and gold.

Uranium Exploration Australia (UXA) is another in a long list of companies hoping that the area in South Australia surrounding the world’s largest uranium deposit – BHP Billiton’s (BHP) Olympic Dam – is rich with further deposits. This is no pie in the sky exercise, as already Heathgate Resources’ Beverley mine is soon to start production nearby and the recently tested Beverley Four Mile project – a joint venture between Heathgate and Alliance Resources (AGS) – may yet prove a more expansive resource than Energy Resources Australia’s (ERA) Ranger mine in the Northern Territory.

Indeed UXA holds several exploration licences in this highly lucrative area known as the Gawler Craton. One tenement – Oak Dam Northeast – is located on the Stuart Shelf and lies only 6km from BHP’s Oak Dam uranium-copper-iron satellite and 15km from the recently discovered Carrapateena Project. It is for the Oak Dam Northeast project that Australia’s leading goldminer Newcrest (NCM) has agreed to spend a minimum $3 million over four years in a joint venture arrangement with UXA in return for the right to earn a 75% interest.

It was actually Newcrest that approached UXA, several months ago. The miner is interested in the very high prospectivity of this particular tenement, but is only interested in the iron-copper-gold deposits it hopes to find. UXA retains the full interest and right to explore solely for uranium, develop a mine and market the uranium regardless of whether it’s UXA or Newcrest that actually stumbles across it. For UXA, said managing director Patrick Mutz, it is the opportunity to work with and indeed learn from a highly experienced mining giant such as Newcrest. Despite becoming the pupil, UXA intends only to remain uranium focused.

UXA’s share price has had quite an up and down history – unusual for a uranium junior lately when the only way has been up. UXA peaked at $0.585 in the pre-May 2006 surge only to fall back below $0.20 in the pullback. UXA has recently been on the move again, and this latest news has provided another fillip with the share price edging up to $0.40 once more.

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