Shea Creek Emerges as Largest Undeveloped Uranium Resource in the Athabasca

UEX Reports Mineral Resources at the Shea Creek Project of 63.6 million pounds U(3)O(8) in the Indicated Category and 24.5 million pounds U(3)O(8) in the Inferred Category, with Mineralization in all Deposits Remaining Open

Trading Symbol: UEX-TSX

VANCOUVER, May 26 /CNW/ - UEX Corporation ("UEX") is very pleased to announce the first National Instrument 43-101 ("N.I. 43-101") compliant independent mineral resource estimate for the Shea Creek Project ("Shea Creek"). Shea Creek is located in the western Athabasca Basin (the "Basin") of northern Saskatchewan, Canada, and is owned 49% by UEX Corporation and 51% by AREVA Resources Canada Inc. ("AREVA"). AREVA is the project operator. The mineral resource estimate, commissioned by UEX, was completed by Golder Associates Ltd. ("Golder") of Burnaby, B.C. A technical report supporting this resource estimate will be filed on SEDAR within 45 days of this news release.

This resource estimate for Shea Creek incorporates resources from the Kianna, Anne and Colette Deposits based on drilling information up to December 31, 2009. Mineralization encountered during the ongoing 2010 program is therefore not included.

At a cut-off grade of 0.30% U(3)O(8), Indicated Mineral Resources for the three Shea Creek deposits comprise 1,872,600 tonnes grading 1.54% U(3)O(8) containing 63.57 million pounds of U(3)O(8), and an additional 1,068,900 tonnes grading 1.04% U(3)O(8) in the Inferred category containing 24.53 million pounds of U(3)O(8).

This estimate confirms Shea Creek as the largest undeveloped uranium resource in the Basin. It also ranks as the third largest uranium resource in the Basin, exceeded in size only by McArthur River and Cigar Lake. Resources at Shea Creek are largely open and have excellent potential to expand significantly as drilling continues. Some of the largest areas of mineralization, including the Kianna and Colette basement zones, are open and new areas of mineralization remain undefined, such as the sparsely tested 58B Area that is currently being explored after the initial positive results announced by UEX on March 17, 2010.

Graham Thody, President and CEO of UEX, commented: "This first uranium resource estimate for the Shea Creek deposits is a huge milestone in the development of this world class uranium system. Given the high success rate of our drilling on this trend and the amount of untested potential, we anticipate expanding these resources with our partner AREVA as we move towards an ultimate production decision." Mr. Thody went on to say: "This announcement is also a milestone in the evolution of UEX from the company with the highest exploration expenditures in the Athabasca Basin, to one now focused on the development of the third and sixth largest known uranium resources in the Athabasca Basin, being Shea Creek and Hidden Bay."

Resources at various cut-off grades are summarized in Table 1. Significantly, at higher cut-off grades most of the contained uranium is retained at substantially higher grades. For example, at a 1.5% U(3)O(8) cut-off grade, the contained uranium and 3.79% Indicated grade are comparable to the Cameco Corporation operated pre-development stage Millennium Deposit resource which is calculated at a substantially lower cut-off of 0.5% U(3)O(8).

                                   TABLE 1
     Shea Creek Mineral Resources, Tonnes and Grade at Various U(3)O(8) %

      These mineral resources were completed in May 2010 (incorporating
     drilling information up to December 31, 2009) using CIM standards of
                estimation of mineral resources and reserves.

                             Cut-off                    Grade      U(3)O(8)
    Category               U(3)O(8) (%)    Tonnes    U(3)O(8) (%)   (lbs)
                                 0.10    2,733,900        1.118   67,414,000
                                 0.30    1,872,600        1.540   63,572,000
    Indicated                    0.50    1,383,000        1.946   59,342,000
                                 1.00      785,200        2.885   49,948,000
                                 1.50      509,500        3.786   42,527,000
                                 0.10    1,862,800        0.674   27,688,000
                                 0.30    1,068,900        1.041   24,525,000
    Inferred                     0.50      746,700        1.323   21,776,000
                                 1.00      322,700        2.159   15,360,000
                                 1.50      188,700        2.829   11,771,000

The majority of the resources are from the Kianna and Anne Deposits, where a significant portion of the resources lie in basement rocks beneath the Athabasca unconformity. A breakdown of resources by deposit at a cut-off grade of 0.3% U(3)O(8) is provided in Table 2 and at a cut-off grade of 1.0% U(3)O(8) in Table 3.

                                   TABLE 2
     Breakdown of the Contribution of Each Deposit at Shea Creek to the
                 Total Resources at a 0.3% U(3)O(8) Cut-off.

                           Grade                            Grade
                          U(3)O(8)  U(3)O(8)               U(3)O(8)  U(3)O(8)
    Deposit        Tonnes   (%)      (lbs)          Tonnes   (%)      (lbs)
    Kianna  In-   713,000  1.442  22,665,000       573,100  1.360  17,184,000
    ------- di- ---------------------------- In- ----------------------------
    Anne    ca-   484,500  2.368  25,295,000 fer-  299,300  0.674   4,448,000
    ------- ted ---------------------------- red ----------------------------
    Colette       675,100  1.049  15,613,000       196,500  0.668   2,893,000
    -------     ----------------------------     ----------------------------
    -------     ----------------------------     ----------------------------
    TOTALS      1,872,600  1.540  63,572,000     1,068,900  1.041  24,525,000

                                   TABLE 3
     Breakdown of the Contribution of Each Deposit at Shea Creek to the
                 Total Resources at a 1.0% U(3)O(8) Cut-off.

                           Grade                            Grade
                          U(3)O(8)  U(3)O(8)               U(3)O(8)  U(3)O(8)
    Deposit        Tonnes   (%)      (lbs)          Tonnes   (%)      (lbs)
    Kianna  In-   297,400  2.687  17,621,000       256,000  2.329  13,143,000
    ------- di- ---------------------------- In- ----------------------------
    Anne    ca-   232,300  4.321  22,130,000 fer-   43,100  1.402   1,332,000
    ------- ted ---------------------------- red ----------------------------
    Colette       255,600  1.811  10,205,000        23,600  1.700     884,000
    -------     ----------------------------     ----------------------------
    -------     ----------------------------     ----------------------------
    TOTALS        785,200  2.885  49,948,000       322,700  2.159  15,360,000

Resource Estimation Details

The Shea Creek resource estimate was prepared by K. Palmer, P.Geo., of Golder, an independent Qualified Person as defined by N.I. 43-101, and peer reviewed by G. Greenough, P.Geo. and O. Tavchandjian, P.Geo., both of Golder. The resource calculation utilized 361 diamond drill holes (totaling 292,100 metres) which were drilled from 1992 to 2009. Drill spacing across the deposits is variable, ranging from about 7 metres to more than 50 metres, which is reflected in the different resource categories.

The mineralized wireframe models from the Kianna, Anne and Colette Deposits (shown in Figures 1, 2 and 3 respectively) which form the basis of the resource outlines were constructed using a minimum cut-off grade of 0.05% U(3)O(8). The resource estimate utilized a geostatistical-block model technique with ordinary kriging methods and the DATAMINE Studio 3 software package. Log histogram and log probability plots were created for uranium geochemical data for each mineralized zone in order to define a capping strategy, and as a result a total of 52 samples were capped at various grades for the different zones.

The resource database utilized primarily uranium geochemical analyses from the Saskatchewan Research Council (SRC) Geoanalytical Laboratories in Saskatoon, Saskatchewan. In addition to AREVA's internal quality controls, duplicate and independent check analyses were performed by UEX on sample suites representing approximately 5% of the mineralized assay database since mineralization was discovered in 1992. In cases where geochemical analyses were not available due to incomplete sampling or core recovery issues, downhole gamma probe data were used to calculate equivalent uranium grades based on correlation of assays with previous probe results. A total of 678 dry bulk density samples, representing all rock types and mineralization styles from the three Shea Creek deposits, form a comprehensive basis for the density component of the resource estimate.

Ongoing Exploration

UEX and AREVA continue to explore the Shea Creek deposits and four drills are currently active in several target areas, including:

    i)  Testing the down plunge continuations of high-grade basement
        mineralization in the Kianna Deposit; and

    ii) Testing new basement and unconformity-hosted mineralization in the
        sparsely tested 58B Area.

The 58B Area lies between the Kianna and Colette Deposits where both significant unconformity and basement mineralization have been encountered in successive drill holes, suggesting a high potential to define a fourth deposit with further drilling.

The Shea Creek Project has excellent potential for further expansions of current resources. These expansions will come from new discoveries within the trend, much like Kianna and the evolving 58B Area were discovered, and also from further expansion of the three known deposits, all of which are open in most directions. An $8.0 million 2010 annual exploration budget was approved for Shea Creek, of which UEX is responsible for its 49% share of approximately $3.9 million.

About the Shea Creek Deposits

The Kianna, Anne and Colette Deposits within Shea Creek are distributed along a strike length of over three kilometres of the north-northwest trending Saskatoon Lake graphitic conductor (see Figure 4). The Saskatoon Lake conductor is coincident with a southwest-dipping, reverse fault that displaces the flat-lying unconformity with the overlying Athabasca Group sandstone by several tens of metres. Depth to unconformity typically ranges from 700 to 740 metres. As a result of the sandstone thickness, drilling is normally completed by drilling a master pilot drill hole from which several wedge holes are drilled to enable close-spaced drilling.

Known deposits and mineralized areas along the Saskatoon Lake conductor at Shea Creek occur often in areas where east-northeast trending discordant faults offset the north-northwest trending conductive graphitic unit. Three styles and settings of mineralization are present, all of which form components of the current resource estimate:

    -   Perched, sandstone-hosted mineralization is found in discrete zones
        tens of metres above the unconformity;

    -   Unconformity-type mineralization is found in close proximity to the
        unconformity; and

    -   Basement-hosted mineralization is found in zones up to 200 metres
        below the unconformity.

Although each style of mineralization is comparable to individual uranium deposits in the Athabasca Basin, the common vertical stacking of these three styles is unique to the deposits at Shea Creek. The resources reported here include components of all three of these mineralization styles. Mineralization is mineralogically simple comprising dominantly pitchblende as the primary host to uranium, typical of other significant deposits in the Athabasca Basin, and lacking significant quantities of deleterious elements such as As, Ni, and Co found in some uranium deposits. Some portions of the Shea Creek deposits contain significant gold grades, which were not assessed in this current resource, but will be further investigated.

Qualified Persons

Technical information in this news release has been reviewed by R. Sierd Eriks, P.Geo., UEX's Vice President of Exploration, UEX geological consultant David Rhys, P.Geo., and Kevin Palmer, P.Geo., of Golder, all of whom who are Qualified Persons as defined by N.I. 43-101.

About UEX

UEX is a Canadian uranium exploration and development company actively involved in 19 uranium projects, including seven that are 100% owned and operated by UEX, one joint venture with AREVA that is operated by UEX, ten joint-ventured with AREVA and one under option from JCU (Canada) Exploration Company, Limited, which are operated by AREVA. The 19 projects, totaling 338,972 hectares (837,618 acres), are located in the eastern, western and northern perimeters of the Athabasca Basin, the world's richest uranium belt, which accounts for approximately 22% of the global primary uranium production. UEX is currently developing several uranium deposits in the Athabasca Basin which include the Kianna, Anne and Colette Deposits at its 49%-owned Shea Creek Uranium Project, a joint venture with AREVA in the western Athabasca Basin, and the Horseshoe, Raven and West Bear Deposits located at its 100%-owned Hidden Bay Project in the eastern Athabasca Basin.

About AREVA Resources Canada Inc.

AREVA, a uranium exploration, mining and milling company, is a subsidiary of AREVA Group, a worldwide expert in the energy field with manufacturing facilities in 43 countries and a sales network in more than 100 countries. AREVA Group, through its Canadian subsidiary, has significant interests in several uranium deposits in the Athabasca Basin, including the McClean Lake, Midwest and Shea Creek deposits operated by AREVA, as well as the McArthur River, Cigar Lake and Millennium deposits operated by Cameco Corporation. AREVA also holds a majority interest in the Kiggavik deposits in Nunavut.

Forward-Looking Statements

This news release contains "forward-looking statements" that are based on UEX's current expectations, estimates, forecasts and projections. These forward-looking statements include statements regarding UEX's resource estimates, outlook for our future operations, plans and timing for the commencement or advancement of exploration activities on our properties, and other expectations, intention and plans that are not historical fact. The words "estimates", "projects", "expects", "intends", "believes", "plans", or their negatives or other comparable words and phrases are intended to identify forward-looking statements. Such forward-looking statements are based on certain factors and assumptions and are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from UEX's expectations include uncertainties relating to interpretation of drill results and geology, additional drilling results, continuity and grade of deposits, public acceptance of uranium as an energy source, fluctuations in uranium prices and currency exchange rates, changes in environmental and other laws affecting uranium exploration and mining, and other risks and uncertainties disclosed in UEX's Annual Information Form and other filings with the securities commission on SEDAR. Many of these factors are beyond the control of UEX. Consequently, all forward-looking statements made in this news release are qualified by this cautionary statement and there can be no assurance that actual results or developments anticipated by UEX will be realized. For the reasons set forth above, investors should not place undue reliance on such forward-looking statements. Except as required by applicable law, UEX disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise.

SOURCE UEX Corporation

For further information: For further information: Graham C. Thody, President & CEO, (604) 669-2349

Organization Profile

UEX Corporation

More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890