PROJECTS

AMARILLO GRANDE PROJECT

Highlights

  • Excellent candidate to be the first low-cost, near-term domestic uranium supplier in Argentina
  • Three main properties with zones of near-surface mineralization within a 140km trend discovered by Blue Sky
  • Open for expansion – mineralized sequences believed to be preserved along the trend
  • Leachable mineralization; upgradeable through a simple low-cost wet screening technique
  • Exclusive rights to over 287,000 hectares

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 Valcheta or Neuquen, via the gravel Provincial Road 66, approximately 65 kilometres south of the town of Villa Regina. Villa Regina has the fifth largest population in the province of Rio Negro with approximately 28,000 inhabitants.

Exploration & Development Strategy

In 2016 Blue Sky is launching an aggressive exploration program to prove up 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

Amarillo Grande is one of the most advanced uranium 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 properties (Ivana, Anit, and Santa Barbara) along a 140 kilometre trend. Mineralization at all three properties occurs at or very near surface, in weakly-cemented host rocks, making simple and inexpensive open pit mining a likely development scenario. Uranium mineralization found to date is in the form of the leach-amenable mineral carnotite as coatings on pebbles. Preliminary metallurgical work on samples from Anit indicates that a simple wet-screening technique 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 supervision 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 has 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.

Deposit Model, Examples and Project Geology

The Amarillo Grande project has discovery potential for 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) in association with secondary carbonate minerals that form lenses or blankets of calcrete. However, these types of secondary deposits are interpreted as being sourced from earlier-formed Sandstone-type uranium deposits that are expected to be preserved at depth. Surficial calcrete deposits typically form in semi-arid to arid uranium rich districts adjacent to uranium source rocks (granites or ash flow sequences) or primary uranium. The main uranium mineral in these deposits is typically carnotite, a yellowish hydrated potassium uranium vanadium oxide, K2(UO2)2(VO4)2.3H2O.

A prime example of a Surficial Uranium deposit is the Yeelirrie deposit in Australia operated by Cameco. The deposit contains 127.3 million pounds of U3O8 in Measured and Indicated resources and will be mined from shallow pits up to 10 metres deep with the ore being processed using alkaline leaching[1].

Regionally at the Amarillo Grande Project, quaternary gravel and sand deposits cover most of the area, and outcrops are scarce. Basement rocks include proterozoic shales and schists of the Nahuel Niyeu Formation and Carboniferous to Permian granites of the Navarrete Plutonic Complex. The stratigraphy includes Late Cretaceous sedimentary sequences that represent the upper section of the oil and gas producing Neuquén basin. Middle to Upper Tertiary sedimentary sequences overlap unconformably on the Mesozoic units. The Tertiary sequences include fluvial and marine sediments at the base grading upwards into continental sediments and volcanic flows. A noticeable NW-SE lineament related to the edge of the geologic province appears to control the radiometric anomalies detected along the Amarillo Grande project trend.

[1] www.camecoaustralia.com Investors are cautioned that there is no assurance that deposits similar in size or grade to Yeelirrie will be found on the Properties. The Qualified Person has not verified the information, that is believed to be reliable, concerning the Yeelirrie.

Uranium mineralization on the properties is found in the form of carnotite hosted by unconsolidated to well sorted reddish and yellowish sands and gravels, commonly covered by calcrete. Lower-grade mineralization is hosted by green clays with carnotite occurring along parting planes. These sediments are interpreted as stacked paleochannels of a Tertiary fluvial system developed during an active volcanic period relating to uplift to the west. This fluvial system is intercalated with marine-coastal sediments to the south.

There are many possible sources of uranium in the District, including uranium rich-granites, volcanic rocks and 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 redox front traps where uranium-deposits are formed.

For additional details on the geology of the properties, please refer to the Technical Report by C. Verley, dated May 18th, 2012 and filed on SEDAR.