Malone, Monaro Mining’s chairman said results of this work have dramatically exceeded the company’s already high expectations:

“The data validates our conviction as to the quality of the Rio Puerco asset which is located in the Grants Uranium District where approximately 340 million pounds of uranium has been produced. In our view, Rio Puerco is a serious deposit, located in one of the world’s premier uranium belts with tremendous up-side. It is quite clear that we have barely scratched the surface in terms of defining the final size and tenor of the deposit within our claim block. The result also validates our view that the company focus its attention on the US assets where it has the means to grow organically. Our task in the coming weeks will be to analyse the consultants report in detail and plan a strategy to take this deposit to the next level and ultimately to production”.

Significant increase in uranium resource inventory at Rio Puerco from 4.6 million lbs to 11.4 million lbs at a grade of 0.09% eU3O8 (900 ppm eU3O8).

Considerable upside to increase resources as the current JORC resource has been calculated on only one claim block – representing just 7% of Monaro Mining’s total land holding in the Rio Puerco area.

Potential for conventional or ISL mining.

An exploration target of between 1.3 and 2.6 million lbs identified on mine site claims.

Exploration potential of greater Rio Puerco area confirmed with multiple target options defined near mine site as well as regionally.

Exploration program to be re-focused as a result of positive data review.

Data validates the quality of the Rio Puerco asset.

The project is considered to hold potential for either conventional underground or in-situ leach (ISL) mining. The company believes that confirmatory drilling has the potential to convert the resource into a “measured’ category relatively quickly.

A distinct advantage of the Rio Puerco project is that there is significant mining infrastructure already in place, including a 260 metre, 4 metre diameter concrete lined shaft and multiple drives. This work was completed by Kerr McGee in the 1970’s for the purposes of mine development and bulk metallurgical sampling and processing. This infrastructure will save the company millions of dollars in mine development costs, should it be found that conventional mining is the preferred method of extraction.

As part of the re-evaluation study, the potential to increase the extent of uranium resources was also assessed as the host uranium formation extends across to other nearby claims held by the company. Previous drilling by the company and other published data, indicates that further work is warranted to test for potential extensions.

This independent re-evaluation of the resource was completed by Mr Jerome Randabel in collaboration with Dr Drazen Vuckovic, both of whom are practicing geologists. The following sections provide a more detailed review of the background and methodology used in the re-evaluation process.

Tenure and Regional Mineralisation

The Rio Puerco mine area (and the focus of the re-evaluation study), is secured by 32 claims over Sections 18 (Betty Claims) and Section 24 (Syncline Claims). The company also holds a number of claims to the east and west of the prospect.

That the company’s Rio Puerco uranium project is located in one of the world’s greatest uranium provinces is unquestioned. The Grants Mineral Belt, has produced approximately 340M lbs of uranium and is set to resume its mantle of a premier world producing region. The company’s deposit is located only 55 kms east of the Mt Taylor uranium deposit and 65 kms from the Roca Honda uranium deposit.

The Mt Taylor uranium mine has produced approximately 8 Mlbs of U3O8 before it was shut down in the late 1980’s. This deposit is now owned by Rio Grande Resources Corporation and a recent company release indicates that this deposit now contains over 100 M lbs of U3O8 with an average grade of 0.15% to over 2.0%. The deposit is currently being evaluated for development as an in-situ leach operation. The Roca Honda deposit is owned by Strathmore Minerals Corporation and based on their published company information, contains approximately 33M lbs of U3O8 with grades varying from 0.17% to 0.23%.

Mining and exploration history of the Rio Puerco project

Previous exploration reports indicate that the Rio Puerco deposit was discovered in 1968 on Section 24, when uranium mineralisation was intersected by drilling to a depth of 254.5m. Between 1970 and 1980, Kerr- McGee reportedly spent US$17.5million in proving up and developing a resource of approximately 7 million pounds U3O8 on land in and around the Rio Puerco mine. A total of 815 holes were drilled for 183,604m on Section 18 and 271 holes for 55,259m were drilled on Section 24 (Figure 3). These two sections contain the bulk of the Rio Puerco Resource which has been previously reported by Monaro Mining to contain 1.93 million tonnes of ore with an average grade of 0.12% U3O8 (4.6million pounds contained U3O8 ).

In addition to its exploration and development work, Kerr-McGee sunk a 260m deep vertical production shaft including all surface infrastructure to support a total mine production phase. They also put in several kilometres of development drives to extract a 10,160 tonne bulk sample for milling and processing. The Rio Puerco mine was intended to be a room and pillar underground mine, but was never put into production as a result of declining uranium markets and a tailings wall failure at the processing plant in which the bulk sample had been processed.


The data used for the resource estimate consisted of the historical maps, downhole gamma-ray data converted to percent equivalent U3O8 (eU3O8), geological logs and drillhole survey data. Of the reported 832 drill holes into the project area, data for only 764 drill holes was available for assessment.

Sampling and Assays

The digitised gamma data was recorded in counts per second as was the industry standard practice at the time. The data was then converted to equivalent U3O8 by applying the K-factor, the “dead time correction” as well as a borehole size constant. The resultant K factor is a calibration constant for the crystal in the gamma tool and is unique for each tool and crystal. The dead time correction is usually in microseconds, and accounts for the rare times that the crystal is saturated by radiation and does not record. Usually this occurs at grades above 2%. In this instance, the disequilibrium, mud/water factor of 1 as well as a drillhole size correction of 1.11 was applied to the data.

Drill hole Information

795 drillholes equivalent to 185,529 drilled meters was used in assessment. Drillholes were generally found to be located on a grid with N-S lines around 30m apart and drillhole spacing on each line at 25m to 160m, depending upon the tenor of the mineralisation. Six drill holes were cored but the majority were drilled using the rotary mud method.

Downhole survey

All drill holes were drilled vertically and exhibited very little drift.

Downhole geology

Downhole geology was interpreted from the resistivity and self potential curves of the wireline logs, and consisted of picking the top and base of each formation, as well as the sand units within the Westwater Canyon member.