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The Sage Creek Project is located within the southern Powder River Basin. Structurally the basin is a north-northwest trending asymmetrical syncline that extends from central Wyoming into southern Montana and from the western slopes of the Black Hills to the eastern flank of the Big Horn Mountains. It covers an area of about 3.1 million hectares (7.7 million acres). The project area is located on the western side of the basin axis in an area characterized by shallow northeast dipping strata forming low bluffs and broad flat uplands cut by gullies created by recent erosion. Elevations range from 5,480 feet (1670 m) on the low western part of the property up to nearly 5,905 feet (1800 m) along the crest of Sage Creek Divide.
Figure 1 - Converse County Surface Geology
Cretaceous and early Tertiary sedimentary and volcaniclastic rocks cover most of the surface within the basin, with a thickness of up to 4 km (12,000 feet). In the project area the surface units are the members of the Paleocene Fort Union Formation and the overlying Eocene Wasatch Formation. Uranium has been mined from multiple sandstone horizons within each of these formations in the Powder River Basin.
The Wasatch formation is the youngest strata in the Sage Creek project area, with thickness in Cameco's adjacent Smith Ranch property from 61 to 91 m in the north and up to 152 m in the southern part of T 36 N, R 74 W. The Fort Union Formation is over 1,000 feet (305 m) thick with uranium bearing sandstone units in the upper 800 feet (213 m). The contact between the Wasatch and Fort Union formations is defined by the School coal seam or its signature lignite horizon.
The Fort Union Formation is a fluvial sedimentary unit consisting of fine to coarse grained arkosic sandstone interbedded with siltstone, mudstone, and carbonaceous material. The coal beds mined in the Powder River Basin are the in the upper Fort Union Formation and include the School and Badger seams mined at the Dave Johnson mine. Uranium resources have been developed on Cameco's Smith Ranch in the O, M and K sandstone units in the Fort Union Formation and lesser amounts have been found in the E sandstone of the Wasatch Formation. Thickness of the ore horizons ranges from 10 to 180 feet (3 to 60 m), with the O sand being the thickest and most persistent.
The uranium deposits of the Powder River Basin are classified as roll front style mineralization produced by dissolution and transport of uranium and subsequent deposition at an irregular, active boundary where a reducing environment balances the oxidative capacity of the uranium-bearing ground water. Controls for deposition included an oxygen-rich aquifer confined between near horizontal aquitards (clay beds), a source of some soluble species of uranium minerals, and contact with a reductant such as carbon rich material and/or disseminated sulfides in the unoxidized aquifer. In the Powder River Basin, the uranium bearing sandstone units are sandwiched between impermeable layers of volcanic ash-clay which allow in situ recovery ("ISR") operations to remove the uranium while maintaining the regional groundwater quality.
The Powder River uranium deposits are typically multiple "C-shaped" roll fronts distorted by variations in the gross lithology of the host sandstone unit. Individual rolls range in thickness from 1 to 6 m (3 to 20 feet) and may be a thousand meters (3,000 feet) in length. As they occur in stacked deposits, the overall mineralized sections of sandstone may approach 200 m (500 feet) in thickness, although individual ore-grade beds are dispersed throughout the overall lower grade mineralized zone.
Figure 2 is a conceptual model of a typical roll front uranium deposit showing the predominant mineral phases and alteration. Altered sandstone in the core of the leached aquifer shows characteristic feldspar alteration and limonite/hematite staining. The unaltered sands are light gray with no limonite and the feldspar grains are relatively unaltered. The ore-bearing sands range from yellow uranium mineral-stained to medium to dark gray pyritic sandstone. Higher grade zones occur at the nose of the roll front and where carbonaceous material occurs in the sediments.
Figure 2 - Roll front cross-section
The Sage Creek project borders Cameco's ISR operations at Smith Ranch and Reynolds Ranch. Additional properties with drill indicated resources lie to the west, north and south of the Sage Creek ground. Cameco's newest leach field lies three miles (nearly 5km) east of the southern claims boundary of the Sage Creek project.
Review of the Wyoming Department of Natural Resources database for the Sage Creek project area yields well construction, depth and geological logs for many of the oil and gas, water and some uranium exploration drill holes from the past several decades. Research into the deeper wells that penetrate the favorable sandstone unit of the Fort Union Formation has shown that the sandstone unit that hosts the uranium mineralization on Cameco's Smith Ranch and Highland ISR operations can be traced in drill hole well logs onto the eastern central part of the Sage Creek claims. Figure 3 shows the cross section showing a fence of drill holes and corresponding stratigraphy of the uranium-bearing sand unit in the Fort Union Formation, including the westernmost drill hole located on USEMI claims in Section 22 T36N, R75W. The cross section demonstrates the continuity of the Fort Union sandstone beds over nearly fifteen miles (24km) of strike length through Cameco's operations onto the Sage Creek property. The location of the current Cameco/PRI ISR operations and Sage Creek claims are noted on the section.
Figure 3 - Stratigraphic cross-section
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