Letlhakane

A-Cap currently holds 12 Prospecting Licenses (PL) across Botswana that encompasses 6,000²km. Recent activities have largely focussed on the Letlhakane Project and the Southern Pans Project.

The key pillars of A-Cap’s strategy are to:

• Complete a Bankable Feasibility Study (BFS) at the Letlhakane Uranium Project
• Continue an active exploration program across its tenement portfolio focusing on resource expansions at Letlhakane
• Continue to build and develop a management and exploration team ensuring the highest quality work is carried out across all facets of the exploration and development program

Letlhakane Project

The Letlhakane Project is comprised of seven distinct resources areas; differentiated from each other on the basis of the distribution and style of mineralisation. Mineralisation has now been defined over an 8km by 13km area, which is still open to the west.

The JORC Resource

A-Cap currently has recently (3rd April 2011) upgraded its JORC compliant Global Resource to 261 mill Mlb uranium oxide at the Letlhakane Uranium Project. The defined resource is still open along strike to the west indicating that additional resource growth is highly likely. A-Cap’s exploration team is confident that the resource inventory will continue to grow with further exploration and is currently targeting, and is on its way to achieving, a global resource of 300 Mlbs contained U308.

Letlhakane has seen a remarkable growth in its Global Resource over the last four years, resulting in it now being defined in the top ten world’s largest undeveloped uranium deposits.

Highlights of A-Cap’s Global Resource Inventory at a 100ppm cut off include:

• At a 100ppm U3O8 cut off the Global Resource has grown from 157Mlb of U3O8 to 261Mlbs an increase of 65%
• Infill drilling within the previous resource area has resulted in a reclassification of 75Mlbs into the Indicated Resource category which is a 49% increase.
• The new Resource includes 73Mlbs of U3O8 defined at Serule North-west, previously unexplored ground between the Gojwane and Serule Resource areas.

 

In accordance with JORC requirements, the Mineral Resource update has been supervised by Mr. Ian Glacken of Optiro. Ian Glacken is a Fellow of the AusIMM, a Chartered Engineer and a Competent Person as defined by the JORC Code for the reporting of uranium resources. Mr Glacken has more than 25 years of experience in resource estimation and reporting and has had direct uranium resource experience at Olympic Dam, Yeelirrie, Ranger, Jabiluka and Four Mile. Mr. Glacken is a Director and the Principal Consultant at Optiro. For the ten years prior to this, he held the role of Group General Manager – Resources for the Snowden Group.

The Optiro letter detailing the work completed in the calculation of the Mineral Resource estimate may be downloaded.

Exploration within the Letlhakane Project area 2010/2011

Whilst targeting development and production at Letlhakane remains A-Cap’s key focus, the Company continues an aggressive exploration program over its 6,000 km² tenement package with a strong focus on the areas in and around Letlhakane as well as the Southern Pans Project to the North West.

Exploration completed in and around the Gojwane Resource area resulted in the definition of two zones of near surface secondary mineralisation in the Kraken and Gorgon West areas. At Kraken deeper oxide and primary mineralisation had already been delineated but near surface secondary mineralisation had been previously underestimated due to difficulties in sampling from RC holes at shallow depths. This was corrected by applying an alternative drilling technique. A new zone of secondary mineralisation was defined in Gorgon West by extending the near surface drilling to the west over a radiometric anomaly. These discoveries were included in the most recent resource upgrade.

Following on from the resource update of November 2009, A-Cap began an initial evaluation of the areas between the Gojwane Resource and the Serule West Resource. A program of resource extension drilling was completed between the two resource areas defining the Serule North-west mineralised channel. The mineralisation defined by this phase of exploration contributed considerably to the new resource upgrade announced in April 2011.

Exploration efforts for the remainder of 2011 will see further drilling along high grade extensions of mineralisation to the west of the existing resource areas. A program of drilling is also planned to explore for additional shallow resources to the south-west of Serule west and in PL138/2005 to the north of PL45.

Exploration at the Southern Pans Project

In December 2010, A-Cap announced that regional exploration at the Mea Prospect located within Southern Pans Project returned highly anomalous rock chip samples with uranium grades exceeding 500ppm at surface across a 14km wide radiometric anomaly.

Whilst the source of uranium in the Mea Prospect is not fully understood at this stage, the regional geology is analogous with that observed at Letlhakane and A-Cap believes it warrants further exploration and the Company is currently initiating further sampling, trenching and drilling to further assess the potential held within this prospect.

Infrastructure & Prospects

The Letlhakane Project is ideally situated adjacent to Botswana’s main infrastructure corridor that includes the main highway between Francistown and Gaborone. A north-south Railway line runs parallel to the highway alongside the 220,000V high-tension power line. The presence of this infrastructure will have a positive effect on keeping the projects Capital Costs low while moving forward into development and production.

The Mea Prospect, within the Southern Pans Project is situated 5km north of the A30 highway that links Francistown to Orapa. Access to the area is good, with well-maintained gravel roads turning off the A30 approximately 130km from Francistown. A high-tension power line traverses the area approximately 3km from the prospect.

Letlhakane Geology

The basal sediments of the Karoo Super Group host the uranium mineralisation within the Letlhakane prospecting license. These Permian to Jurassic aged sediments were deposited in a shallow, broad, westerly dipping basin, generated during rifting of the African continent. The source area for the sediments was the extensively weathered, uranium-bearing, metamorphic rocks of the Achaean Zimbabwe Craton which outcrop in the eastern portion of the license.

Uranium Mineralisation

The geology of the Letlhakane Uranium Project is relatively simple. Uranium mineralisation occurs within the flat-lying sedimentary rocks of the Karoo Supergroup and the entire resource is within 70m of the surface. Importantly some of the highest-grade mineralisation occurs in the secondary zone close to surface ensuring early access to high grades and low cost mining from the commencement of production.

Based on recent exploration and the geology logged from extensive trenching of the Mokobaesi area, four distinct styles of mineralisation have been identified in the prospecting license:

Primary Mineralisation: Two dominant styles of primary uranium mineralisation have been defined within the Letlhakane project area. The earliest phase of mineralisation consists of uranium, which is hosted by fine-grained, organic rich mudstones (with minor coaly interbeds) which are developed on the margins of sandy river channels. The carbonaceous mudstones, and hence the mineralisation, tend to be sub-horizontal and laterally continuous (particularly in the Kraken Resource area) over large areas. The average uranium grade in the carbonaceous mudstones is around 150ppm, but most units have grades exceeding 1000ppm in narrow bands at the top and bottom of the sequences.

The second style of primary uranium mineralisation is generated by the migration of uranium bearing groundwater (uranium sourced from basement) through the Karoo sediments and subsequent re-precipitation of uranium in suitably reductive environments. This has resulted in the development of narrow high grade (up to 1500ppm U3O8), tabular zones of mineralisation within fine sandstones. These horizons are typically enveloped with mineralised (150 – 450ppm U3O8) organic rich mudstones. This primary mineralisation is thought to have been developed relatively soon after the Karoo deposition and lithification.

Oxide Mineralisation: Where the primary mineralisation moves into the active weathering environment, the rock becomes oxidized and the uranium mineralogy is altered. This mineralisation is referred to as the ‘oxide’ portion of the resource and has a similar distribution, in terms of both host lithology and grade, to the primary mineralisation. Importantly because of the oxidation of the uranium minerals, the metallurgy of the oxide mineralisation is high with recoveries of up to 87%.

Secondary Mudstone Mineralisation: Dissolution and remobilisation of the primary mineralisation along zones of fracture permeability resulted in the development of secondary uranium (VI) minerals in the near surface weathering environment. The uranium minerals (predominantly uranium vanadates) occur as fine, yellow, powdery coatings on fracture surfaces and bedding planes. This secondary phase of mineralisation occurred recently in geologic history.

Secondary Calcrete Mineralisation: The youngest phase of mineralisation is the result of supergene remobilisation and re-precipitation of uranium minerals from the secondary and primary zones into surficial pedogenic calcrete. The most dominant uranium mineral observed in this style of mineralisation is carnotite.

Metallurgy

2010/2011 was a year of giant strides in the metallurgical field for A-Cap. The Company trialed leaching under both acidic and alkaline conditions, with results clearly demonstrating that the use of acid reagents improved recoveries with significantly shorter leach times across all ore types.

Following on from this, the testwork consistently demonstrated that recoveries of above 80% are feasible in the heap leach process for both the Secondary and Oxide ore types. This combined with the ability to agglomerate the ore to give it sufficient strength to be stacked, indicate that the heap leach option is the preferred process route.

Another exciting development was the discovery of a process option for the Primary Ore. Previous testwork had indicated poor recoveries in the Primary Ore of less than 40%, clearly uneconomic to recover. However, treating the Primary Ore under acidic conditions (as opposed to alkali) has resulted in recoveries in excess of 80%. Given that over 60% of the Global Mineral Resource is made of Primary Ore, the high recoveries achieved in recent metallurgical test work on the Primary Ore has been A-Cap’s most significant breakthrough of the year.

Through its technical consultants at Lycopodium Limited, SGS Lakefield Orestest Pty Ltd Laboratories, A-Cap has been trialing techniques to beneficiate the ore prior to processing. Radiometric sorting has been the most successful of the beneficiation techniques tested. This is a simple process that separates the radioactive (uranium bearing) and non-radioactive portions of mined material. The removal of the non-uranium bearing material from the ore-feed has the potential to dramatically affect the economics of the project by increasing the head-grade and by substantially cutting the amount of material to be treated.

Environment

In 2009, Metago Environmental Engineers commenced an Environmental Impact Assessment (EIA) across the Gojwane Resource area on behalf of A-Cap. Over the course of 12 months, baseline studies were conducted by various independent specialists covering terrestrial flora & fauna biodiversity; aquatic flora & fauna biodiversity; groundwater volume; quality & agricultural & domestic demand; and land use.

An additional suite of studies, specifically aimed at defining radiological baselines, was completed by NECSA (Nuclear Energy Corporation of South Africa). This included studies on the uranium content of the soil, dust, air, crops, surface water and groundwater. They also collected baseline data on radon levels and surface background radiation levels across the Gojwane area. Where deemed necessary, these studies were extended to cover the Serule and Gojwane villages.

An Environmental and Social Impact Assessment (ESIA) was completed and submitted to the Botswana Government for review and the final ESIA will be submitted in Q2 2011.