This deposit was discovered 40 km north of Mount Isa about 1954 by a local prospector. MIM took it over and sunk an exploration shaft. In the 1960s it passed to Queensland Mines Ltd which drilled it extensively and held it until 1992, when Summit Gold NL took over (now Summit Resources NL). A previous exploration partner with Summit (50%) was Kiwi Australian Resources Pty Ltd (50%, a subsidiary of Associated Gold Fields NL), until 1996. In 1996 a new joint venture was established with large miner Resolute Ltd, who bought the 50% stake. Summit maintain manager status of the project. Valhalla Uranium Deposit, QLD
The project also includes the nearby Valhalla South prospect (about 1 km south), and it is considered likely that mineralisation is continuous between the two, which would substantially increase the size of the deposit further.
Summit also acquired the exploration leases for the Anderson's Lode prospect in late 1997 and the Skal prospect in 1998, both in the surrounding Mt Isa region. Further exploration in the region by Rio Tinto 1.3 km north of Valhalla has also discovered weak uranium mineralisation, and exploration is continuing. Summit are actively pursuing further exploration opportunities in the region, including May Downs west of Mt Isa and Isa North just north of Valhalla.
A drilling program in 1996 in 50:50 joint venture with Resolute Ltd delineated inferred resources of 12,200 tonnes U3O8 at an average grade of 0.123%. The mineralisation is hosted within highly altered and mineralised tuff and shale and main intersections are c 300m down, the grade increasing with depth. The deposit remained open in all directions.
A further aggressive drilling program was approved by the Summit-Resolute JV, and started in late 1997, continuing into early 1998. In a market release on December 12, 1997, Summit announced "spectacular grades" of 1.0% over several metres, with exceptional average grades over the length and width of the deposit. However, the average grade intervals reported only ranged from 0.046% to 0.967%, with most lower than 0.2% - hardly impressive on a global scale.
However, even before the completion of the 1997/98 drilling program, Summit Resources and Resolute Ltd were talking of a spectacular new uranium orebody, with potential to be Australia's "next major uranium mine" (1).
After the drilling, geological analysis and calculation of the new orebody size had been completed, in March 1998 Summit gave a measured resource of 21,980 tonnes U3O8 at an average grade of 0.157%, and possibly as high as 29,440 tonnes (average grade 0.096%).
Summit have also undertaken extensive metallurgical testwork on retrieved ore samples, to form the basis of a detailed mine feasibility study for Valhalla. Despite poor results from early tests, the metallurgical work has now reached commercial standards, with uranium extraction efficiencies in the laboratory of 92.3%.
Despite the exploration success and pre-feasibility success, Summit still have to face the policy of the Beattie Labour government. Summit first announced they were placing pressure on Premier Beattie and Mines Minister, Tony McGrady, in their September 1998 Quarterly Report to shareholders. Saying that the return of the Coalition proves support for new uranium mines, Summit go on to say :
The next stage of development at Valhalla is the undertaking of the bankable feasibility study ("BFS"). Prior to committing to the three year, A$7.5 million, BFS the joint venture partners are now seeking assurances from the Queensland State authorities that on lodging the required mining licence application, supporting documentation, management plan and environmental impact statement the licence and State approvals will be granted.The negotiations were obviously long and protracted. Meanwhile, metallurgical and other testwork has continued at a great pace. Summit stated in their December 1998 Quarterly Report that the average grade has been lowered to 0.144%, based on assay results from an independent laboratory. They state that the "lower grade of the resource estimate is more than offset by the improved metal recoveries". Summit also went on to state :Discussions are continuing with the Queensland Government on gaining their unequivocal undertaking that, following the completion of a positive bankable feasibility study ("BFS"), submission of satisfactory environmental impact statement ("EIS") and environmental management operating system ("EMOS") that the various State approvals and licences will be granted. The BFS, including completing the EIS and EMOS, is anticipated to cost around A$7.5million and take 3 years to complete. Another round of meetings with Mount Isa City, State Government and Federal politicians to gain those assurances will be undertaken in the first two weeks of February 1999.In late 1998 Rio Tinto withdrew from the Isa North JV, and Summit Resources announced in their December 1998 Quarterly Report that American base metal miner, Phelps Dodge (2), was farming in to the project. The deal specifically excludes the Valhalla and Skal projects.
By mid-February 1999, it had become apparent that Summit had lost the lobbying battle - Beattie and McGrady were holding their government firm on opposing new uranium mines. Despite a desperate attempt at pleading unfair politics to the Stock Market, enlisting the support of rogue National Party politician Bob Katter, Summit now have no imminent support on which to proceed, and will have to wait until there is a change of government in Queensland. Unless of course they wanted to risk $7.5 million and fail. I don't think so.
We shall see about the "next major uranium mine" indeed.
Further SEA-US Links :
Company Info - Summit Resources and Resolute Ltd.
Information from the Uranium Information Centre, Summit Resources Annual Reports 1997 & 1998
and assorted newspaper and media sources.
Last Updated - March 2, 1999.
1 - Sydney Morning Herald, Dec. 10, 1997.
2 - Phelps Dodge were once quite active Australia, with their subsidiary Western Nuclear being the main explorer of the Beverley deposit in South Australia.
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