Kings Valley Claims, Nevada, USA
Western Uranium acquired the Kings Valley property in January 2005. Recognizing the regional exploration potential the property holds to host uranium and potentially gold or molybdenum mineralization. The Company has been aggressively exploring the area over the past five years and has conducted various phases of exploration including undertaking large geochemical surveys, airborne and ground geophysical surveys, geologic mapping, large regional structural analyses, and various drill campaigns. The Company currently holds in total 2087 claims covering over 40,000 acres within the McDermitt Caldera. AMEC Mining and Metals, Inc. prepared a NI 43-101 compliant resource estimation based on historical drill information including drilling undertaken by the Company during 2006 and 2007. A NI 43-101 compliant inferred resource has been calculated that indicates 4.8 million pounds of uranium in approximately 3 million tonnes at a cutoff of 0.035% U3O8 for the north zone and 0.05% U3O8 for the south and Moonlight zones are present.
Permitting is in progress to allow for an expanded drill program on the western margin of the caldera in the zones of known mineralization. Further drilling in the areas of known mineralization may expand the inferred resource and it is expected that with additional work and drilling, these resources could be upgraded to the Indicated category with additional information regarding the mineral processing and mining methodology. Future exploration is targeted at expanding the known resources in the North, South, and Moonlight Mine areas and locating additional targets in the claim block that may host uranium or other types of mineral deposits.
The 2010 drill program is focused on testing a strong geophysical anomaly that occurs west of the area between the North and South zones of known uranium mineralization. Although the area does not return highly anomalous uranium in rock chip samples at surface, copper and gold have been detected up to 0.9% copper and 0.25 g/t gold in silicified granodiorite and 500 ppm copper and 18 ppb gold in propylitized granodiorite. Stream sediment samples west of the identified anomaly also yielded anomalous copper values. The geophysical anomaly has coincident strong resistivity, high chargeability readings (IP) and a magnetite destructive signature. All three are the type of signatures that may be associated with porphyry style mineralization. The interpretation of the geophysical data suggests that potential altered or mineralized rock is near surface. The drill program consists of 6-10 angle holes averaging 250 meters in depth.
A survey grid was also run over the area of known uranium mineralization at the North Zone. The re-evaluation of the Chevron data coupled with the WUC IP survey over the North Zone suggests previous drilling by Chevron and WUC may not have adequately tested the strongest IP anomalies. A drill test of this area is planned when approval of the Plan of Operation covering this location is received from the BLM.
A comprehensive review of the Chevron Resources IP survey data from the late 1970’s and early 1980’s showed that IP/Resistivity was an effective tool for targeting uranium by identifying sulfides associated with mineralization. The surveys completed by WUC this past spring support this hypothesis and additional surveys are planned elsewhere on the property. Additional drill programs are planned for fourth quarter of 2010.
Geologic Discussion
Exploration and drilling results indicate that the mineral and alteration assemblage found at three areas of known mineralization, the North Zone, South Zone and Moonlight Mine consists of at least two mineralizing events, one event appears to include deposition of gold, silver, arsenic, antimony, copper, lead and zinc and the other system appears to control deposition of uranium, molybdenum, silver and mercury. Geologic and structural mapping along the western escarpment of the caldera has defined a 5 kilometer long, north- to northeast-trending structural corridor extending from the Moonlight Mine in the south past the North Zone.
The Company's regional exploration programs have successfully identified additional areas within the caldera exhibiting potential for containing additional uranium, gold, silver, lithium and possibly molybdenum mineralization. Regional exploration has identified several large geochemical and geophysical anomalies in areas peripheral to previously identified zones of drill defined uranium mineralization. These anomalies are in areas with similar geology to other known uranium deposits within the McDermitt Caldera.
The Company believes that the geologic setting of the McDermitt Caldera is similar to that of the Streltsovka Caldera in Transbaikalia, Russia which hosts reported uranium resources of greater than 600 million pounds U3O8 distributed in 20 deposits. Although the geologic ages of the calderas differ, the internal rock types, complex structural components, the geologic environment, and nearly identical geographical dimensions are analogous.
Geologic work to date has identified a large area of approximately 16 kilometers in strike length and 3 kilometers in width covering prospective regional targets from south to north referred to as JJ, Horse Canyon, Bull Basin, Old Man Springs, and Albisu. Several of these targets have been tested in previous drilling programs and may warrant additional testing. The data gathered during these programs is used in guiding future exploration activities.
Albisu is an area that exhibits paleo-hot springs style surface alteration and lies at the northern end of the dominant north-south structural trend that seems to focus much of the uranium or gold mineralization along the western edge and side of the caldera.
The drilling at Albisu intercepted geochemically anomalous and intensely altered volcanic rocks in every drill hole. Low grade, wide intercepts of gold with scattered narrower zones of higher grade was encountered in many of the holes. The gold occurs in hydrothermally altered brecciated volcanic rocks that exhibit strong argillization, silicification and sulphide veining characteristic of high level epithermal systems. The large halo of widespread and continuous lower grade gold along with geochemically elevated intervals of silver, arsenic, cobalt, mercury and molybdenum within hydrothermally altered and brecciated volcanic rocks indicates this has been an active and dynamic system. Due to the amount of widespread alteration and geochemically elevated levels of gold and various pathfinder elements the Company believes that this area deserves further evaluation. As such, it has joint ventured Albisu to Kenai Resource Ltd. (TSX.V: KAI) to continue exploring.
In summary, there is a dominant north-south corridor of mineralization and alteration that strikes 24 kilometres along the western rim of the McDermitt Caldera. The southern part of the trend is defined by the known zones of uranium mineralization. The north end as defined as Albisu appears to be a gold enriched portion of the system. Along this entire trend scattered old prospect pits and random historic drill holes tend to have elevated geochemical signatures of metals that may occur proximal to large mineral systems. Many of the holes are geochemically elevated significantly above background concentrations in arsenic, mercury, and silver along with scattered zones of elevated gold and molybdenum. All of these elements when examined on a regional scale suggest that an extremely large, active, multi-element, metalliferrous system has been active in the caldera.
