PROJECTS

AMARILLO GRANDE PROJECT

Highlights

  • 145km uranium trend discovered by Blue Sky hosts near-surface uranium and vanadium mineralization - potential for discovery of additional deposits
  • Ivana deposit hosts Inferred resource of 22.7 million pounds of U308 and 11.5 million pounds of V2O5 (28.0 million tonnes averaging 0.037% U308 & 0.019% V2O5 at a 100 ppm uranium cut-off) with a Preliminary Economic Assessment completed in 2019
  • The Ivana deposit remains open for expansion; exploration continues to identify new mineralization
  • Excellent candidate to be the first low-cost, near-term uranium producer in Argentina, with additional potential vanadium credits

Location

The Amarillo Grande Project is located in central Rio Negro province, in the Patagonia region of southern Argentina. The properties are all road accessible from major centres, such as Viedma or Neuquén provincial capitals. The Ivana deposit is located about 25 kilometres north of the Valcheta City, where Blue Sky has a permanent exploration camp/office. The city is located at the junction of Provincial Road #4 and National Road #23, where the latter connects to the deep ocean port of San Antonio Oeste, 120 kilometres to the east. A railway runs parallel to National Road #23, and two high-power lines crosscut the project from east to west.

Exploration & Development Strategy

In 2016 Blue Sky launched an aggressive exploration program to delineate resources and outline economics at Amarillo Grande, in order to capitalize on its early-mover advantage with the goal of becoming the first domestic supplier of U3O8 to the Argentine nuclear industry, and a potential international supplier.A recent surge in global interest in vanadium further broadened the potential target markets for material from Amarillo Grande, which hosts both uranium and vanadium mineralization.

Amarillo Grande is now one of the most advanced uranium & vanadium projects in Argentina and has the potential for low-cost mining & processing in a regulatory environment that supports resource development.

Defined mineralization at Amarillo Grande is found in three target areas (Ivana, Anit, and Santa Barbara) along a 145 kilometre trend. Mineralization at all three areas occurs at or very near surface, in unconsolidated to weakly-cemented host rocks, making simple and inexpensive open pit mining a likely development scenario. Other target zones for potential blind uranium & vanadium mineralization are also present within the project. The majority of the near surface uranium & vanadium mineralization found to date is in the form of the leach-amenable mineral carnotite as coatings on pebbles. Beneficiation test work on samples from Anit and Ivana indicates that simple wet-scrubbing and screening techniques could be used onsite to concentrate and upgrade this material, which could significantly reduce transport and processing costs. Rio Negro already supports the nuclear industry with several facilities in the province.

Discovery Record

This new uranium district was an in-house discovery for Blue Sky. Under the guidance of Dr. Jorge Berizzo, Blue Sky selected Rio Negro as a high-potential location for new uranium deposits. In 2007 the first airborne radiometric survey led to discovery of zones of uranium mineralization at the Anit and Santa Barbara properties. A second large-scale airborne radiometric survey in 2010 led to the acquisition of the Ivana property. Detailed exploration work on all three projects led to the discovery of significant zones of uranium mineralization with potential for expansion to depth and along strike. Additionally, the Company considers the exploration potential within the district-scale 140 kilometre geologic trend to be high.

Surface exploration, ground geophysics, pit sampling and more than 9,000 metres of drilling were completed since the beginning of the revitalized work program in 2016. On March 5th, 2018 the Company announced its first mineral resource estimate for the Amarillo Grande Project. The Company continued exploration efforts while also completing mineralogical, metallurgical and process test work.On February 27th, 2019 Blue Sky announced the first Preliminary Economic Assessment (“PEA”) for Ivana, as well as an updated resource estimate.The resource estimate included a 19% increase in contained U308 and a 13% increase in contained V205, at similar grades. The PEA demonstrates the potential for a surficial mining operation at the Ivana deposit, with 13 years of uranium and vanadium production.

The PEA is preliminary in nature and is based solely on Inferred Mineral Resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability and there is no certainty that the PEA will be realized.

In addition to the resource at Ivana, the exploration program has outlined a zone of significant vanadium associated with the uranium at the Anit target over an open area covering approximately 3 kilometres by 1 kilometre within which the mineralized interval ranged between 0 and +16 metres in thickness and grades ranged from 259 ppm to 3,411 ppm V2O5.

The Company considers the exploration potential at Ivana, and within the district-scale 145 kilometre geologic trend, to be high, as has been demonstrated in more mature uranium districts in similar geological environments elsewhere in the world.

Deposit Model, Examples and Project Geology

The Amarillo Grande project hosts mineralization with characteristics of both Surficial and Sandstone-type uranium deposits.

Most of the mineralization found on the properties to date has the characteristics of Surficial Uranium Deposits, in which uranium occurs in sediments or soils of relatively young age (Tertiary to Recent). Surficial deposits typically form in semi-arid to arid uranium rich districts adjacent to uranium source rocks (granites or ash flow sequences) or primary uranium deposits. The main uranium mineral in these deposits is typically carnotite, a yellowish hydrated potassium uranium vanadium oxide, K2(UO2)2(VO4)2.3H2O. Well-known examples of Surficial Uranium deposits include the Langer Heinrich deposit in Namibia (93 Mlb P&P reserves @ 471 ppm U3O8; www.paladinenergy.com.au) and the Wiluna deposit in West Australia (62 Mlb M&I resources @ 525 ppm U3O8; www.toroenergy.com.au).

Uranium mineralization with more Primary-style characteristics is found in the lower section of the Ivana deposit, and makes up a considerable portion of the current resource.Mineralization includes predominantly β-coffinite, plus carnotite, tyuyamunite, liebigite and pyrite. Mineralization is mainly hosted within carbonaceous gray-colored poorly-consolidated sedimentary rocks.This mineralization has considerable similarities to sandstone-hosted uranium deposits in other locations of the world, particularly basal-channel sandstone-hosted uranium deposits, and appears to be related to a redox boundary of possible regional extent.Examples of this style of mineralization can be found in the Powder River Basin of Wyoming, USA; the Coastal Plain of Texas, USA; and Chu-Sarysu and Syrdarya Basins of Kazakhstan; where mapable redox boundaries have been followed for hundreds of kilometres and contain many deposits of this type.Uranium deposits of this type formed along regional redox boundaries can reach large sizes, as at Inkai, Kazakhstan; where the proven and probable reserves are about 270 million pounds of U3O8 at a grade of 0.03% U3O8.

Investors are cautioned that there is no assurance that deposits similar in size or grade to these will be found on the Blue Sky properties. The Qualified Person has not verified the information, that is believed to be reliable, concerning these 3rd party deposits.

Regionally, the Amarillo Grande Project, is situated near the boundary between the northwestern North Patagonian Massif (Paleozoic and Mesozoic basement) and the southeastern Neuquén basin.The basement rocks contain units of Neoproterozoic-Cambrian metamorphic rocks, Ordovician to Devonian marine sequences, Permo-Triassic intrusives, and Triassic-Jurassic magmatic-volcanic units. Near horizontal sequences of Late Cretaceous and Tertiary sedimentary and epiclastic volcanic formations, representing the thin distal edge of the Neuquén Basin, lap on to the basement rocks near the Project. Quaternary alluvial-colluvial deposits are widely developed over the Project.

The uranium-vanadium mineralization at Amarillo Grande is understood as hosted mostly in medium to coarse grained poorly consolidated sandstones, minor conglomerates, and mudstones of the lower Chichinales Formation.

There are many possible sources of uranium in the District, including uranium rich-granites, volcanic rocks and, potentially, primary uranium deposits within the underlying Cretaceous sediments. The presence of different potential sources enhances the chances of having uranium available to be mobilized within aquifers and along paleo-fluvial systems to redox front traps where uranium-deposits are formed.

For additional details on the geology of the properties, please refer to the Technical Reports by C. Verley, dated May 18th, 2012 and Jon Thorson et al, dated February 28, 2018; both filed on SEDAR.