Pele has hot Elliot Lake uranium property.
Pele Mountain Resources is quickly moving into a mine evaluation stage of its advanced Pardee uranium project in the historic mining camp. Their wholly-owned property has a 33-million pound uranium oxide resource worth more than $2.5 billion Cdn.
The Toronto company, which has staked claims in diamond, gold and nickel projects throughout Northern Ontario, has tapped into the white-hot uranium market with a property that comes with an already measured ore deposit.
The company has assembled a team of experts headed by Scott Wilson Roscoe Postle Associates to handle the project's technical, economic and environment assessment work.
If the economic analysis looks promising, the company is prepared to move Pardee to prefeasibility stage by spring.
Since there's been no significant global uranium exploration in the last 20 years, world demand is outstripping supply and low-grade deposits like Elliot Lake suddenly look economical again.
President and CEO Al Shefsky, who assembled a 10,000-acre land package, wants to be first to market with a new deposit.
"Obviously, there is a shortage of uranium on the marketplace, and if we can be one of first companies to fill the gap of demand, we think we can take advantage of better pricing," says Shefsky.
Pele plans to spend $830,000 in exploration work this year, plus a further $4.5 million for a prefeasibility study to test how viable the deposit is.
The property is located 10 kilometres east of town on the boundaries of three former Rio Algom mines.
The whole area was drilled extensively by Rio Algom in the late 1970s in anticipation of future expansion.
Armed with old Rio Algom drill data, Pele's recent-released technical report confirms an inferred mineral resource of 30.05 million tonnes of U3O8 (uranium oxide) grading 0.05, or 1.0 pound per short ton, for a total inferred resource of 33.05 million pounds of uranium.
There's also the potential for an additional 25 million to 30 million tonnes at grades between 0.04 to 0.05 per cent uranium.
The Pardee deposit sits in an area called the south limb, a channel of a U-shaped syncline rock formation that is known to contain multiple uranium-bearing reefs containing an estimated 210 million tons of ore.
When uranium prices warmed up to more than $20 per pound US in 2005, Pele Mountain joined CanAlaska Ventures (now CanAlaska Uranium) with other speculators in picking up Elliot Lake properties.
Pele was walked into a near-perfect situation after combing through Rio Algom's drill records and resource calculations donated to the Ontario Geological Survey in Sault Ste. Marie.
Shefsky's team determined where the best deposit on the south limb was and staked it.
"The price of uranium has gone crazy, up to $70US per pound and is expected to climb higher. At that price things are really looking good for Elliot Lake. It's a whole new ball park."
If prices keep climbing, Shefsky says Elliot Lake has a good shot to be in production.
Rio Algom had mined more than 100 million pounds of uranium oxide from deposits around Elliot Lake over a 40-year period.
Last fall, Pele drilled their first hole to confirm the mineralization and test for rare earth elements, particularly yytrium.
Shefsky says the Pardee deposit is open at depth below 3,000 feet, including some high grade mineralization outcropping at surface. Many believe if Elliot Lake were start mine production again, the south limb holds its best prospects.
"Some of our dusty old maps are worth quite a bit of money," says Mike Hailstone, OGS Resident Geologist in Sault Ste. Marie.
The south limb area where Pele is working was never mined. But it contains a calculated ore reserves measured at 210 million tons.
Between 1955 and 1996, all the Elliot Lake mines produced 313,530 pounds of uranium with an average grade of 0.11 per cent U308 at 2.12 pounds per ton.
Hailstone says it's not generally known much uranium was mined since the high grade material processed in the 1950's was weapons grade calibre and never revealed.
Shefsky says the company is assessing all their development options including how to recover the uranium either through underground leaching, more expensive surface milling, or a combination of both.
Pele's work could signal a resurgence in the Elliot Lake mining camp.
Among other juniors and promoters, International Montoro Resources has expanded its uranium claims on its Serpent River property covering 1,800 hectares on the south limb.
By IAN ROSS
Northern Ontario Business