Paradigmatic Shifts in Exploration Process

• The Role of Industry-Academia Collaborative Research and Development in Discovering the Next Generation of Uranium Deposits

Jim Marlatt, Raven Minerals Corp.Kurt Kyser, Queen’s Facility for Isotope Research

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Saskatchewan

Global Distribution of Uranium Exploration Companies

Global Exploration• In 2008 over 900 companies claimed an interest in over 3000 uranium project worldwide

• From 2004-2008 an estimated $3.2 billion was expended on uranium exploration

• Brand new, larger, higher grade economicdeposits have not been discovered

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1960 1970 1980 1990 2000 2010Economic Discoveries (mlb U3O8) Expenditures (CDN$ 1997)

McArthur River

Cigar Lake

Athabasca Basin Economic Uranium Deposit Discoveries

Saskatchewan• Over 100 companies claimed some sort of interest in over 200 uranium exploration projects

• From 2000-2009 about $650 million has been expended on uranium exploration

• Brand new, larger, higher grade economicdeposits have not been discovered

?Where are the new

economicuranium deposits?

An Industry in Crisis• two decades of exploration has not lead to the discovery of large, new, higher grade economic uranium deposits

• this is interpreted as a severe and prolonged anomaly

• we call this is an emerging crisis• we call on the need for a paradigm shift in exploration process for new discoveries

Athabasca Exemplar:Evidence of Crisis from the Athabasca Learning

Curve(Adapted from the framework developed in:

Harris, D.P., Zaluski, G., Marlatt, J. A method for the selection of exploration areas for

unconformity uranium deposits.Natural Resources Research 2009; 18:109-136.)

Prospector DrivenExploration

The First

ExplorationLearning Cycle1960 to 1980(20 years)

Model Driven Exploration

TheSecond

ExplorationLearning Cycle1981 to Present

(27 years +)

The Present:Research/Technology Driven

ExplorationThe

Third ExplorationLearning Cycle?

Cigar Lake

McArthurRiver

Key Lake

Cumulative Exploration Expenditures ($ Billion)

Large, High-Grade Discovery

0.5 1.5 2.0

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1000

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1540 million economic lbs U3O8 discovered for an estimated

investment of CDN $1.6 billion (1997 dollars)

1.0

2nd Cycle Endowment = 2.2 Billion lbs U

650 million invested from 2000-2009

Athabasca Basin Learning Curve

Athabasca Analysis• 1.54 billion economic lbs U3O8 (830,000 tonnes U) discovered at a cost of CDN$ 1.6 billion (1997 $)

• Total basin endowment is estimated at about 2.2 billion lbs U3O8 (1.2 m tonnes U)

• About 650 million lbs U3O8 (350,000 tonnes U) available for discovery on the second learning curve

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0.16

Prob

abilit

y Den

sity

80% Confidence Range

Best Single Point Estimate

Additional Discovery (U in millions of lbs)

80 million lbs expected for $150 investment

Athabasca Basin: Expected Size of Future Economic Uranium Deposits Discoveries on the 2nd Learning Curve

Athabasca Analysis• future incremental investment of $150 million should lead to a deposit with an average size of 80 million economic lbs U3O8 (43,000 tonnes U)

• An expenditure of $650 million or 4 times this amount over ten years has yielded no new economic discoveries

• This is a severe and prolonged anomaly

Athabasca Summary• The absence of economic discovery represents a severe and prolonged anomaly

• The play is mature, heavily explored, depleting & is not responding to conventional exploration approaches in a timely & cost effective fashion

• The recognition of ineffective exploration signals the need to shift to a new learning curve for discovery: A paradigm shift

An Industry in Crisis• two decades of exploration has not lead to the discovery of large, new, higher grade uranium deposits

• this is interpreted as a severe and prolonged anomaly

• we call this is an emerging crisis• we call on the need for a paradigm shift in exploration process for new discoveries

Industry-Academia Collaborative Research and

Paradigm Shifts in Exploration Process

• The Past: Prospector Driven Exploration• The Present: Model Driven Exploration• The Future: Research / Technology Driven Exploration

Probability of Economic DiscoveryExploration Sequence Exploration Targetsconceptual drill targets 10,000

reconnaissance drill tests 1,000showings 100

advanced projects 10pre-feasibility 3feasibility 1.5

economic deposit 1

EconomicU Deposit

Endowment DecreasesWith Each Discovery

R&D Can Reduce

ExplorationRisk

ExplorationRisk Increases

with Each Discovery

Risk

High

Eventually Explorationis Ineffective

And CompaniesExit the Basin

Potential to DiscoveryLarge Deposits

Early in the ExplorationProcess

Role of R&D in Reducing Exploration Risk

?Permissivity

Do deposits exist in the geological terrain?

ProspectivityDoes the enterprise have the technology to search

for and discovery these deposits?

Can the enterprise develop new technologies?

Example of Collaborative Research

Base Line Studies

Regional Paragenesis

Sequence Stratigraphy

Deposit Studies

Evolving RegionalModels

Total BasinAnalysis

Identification of Favourable Terrains

1 2 3 4 5

KnowledgeLead Isotope Technology

Weak Acid Leach Technology

Publication of Results in

Refereed Journals

Commercializationof Technology

Prospector DrivenExploration

The First

ExplorationLearning Cycle1960 to 1980(20 years)

Model Driven Exploration

TheSecond

ExplorationLearning Cycle1981 to Present

(27 years +)

The Present:Research/Technology Driven

ExplorationThe

Third ExplorationLearning Cycle?

Cigar Lake

McArthurRiver

Key Lake

Cumulative Exploration Expenditures ($ Billion)

Large, High-Grade Discovery

0.5 1.5 2.0

500

1000

1500

2000

2500

1540 million economic lbs U3O8 discovered for an estimated

investment of CDN $1.6 billion (1997 dollars)

1.0

2nd Cycle Endowment = 2.2 Billion lbs U

650 million invested from 2000-2009

Model System of Collaborative Research

Reception AdoptionInnovation

INVENTOR COLLABORATOR ORGANIZATION

Transmission Learning

CULTURE CHANGE

Weak Links in the Collaborative Research

Value Chain• Creativity• Leadership• Management

Reception AdoptionInnovation

INVENTOR COLLABORATOR ORGANIZATION

Transmission Learning

CULTURE CHANGE

Management Imperative in Supporting R&D

• Management needs to turn the current business model upside down: Adopt R&D as a top priority in the exploration enterprise

• Management needs to identify and support rare Creative Leaders

• Leaders need to develop the sustainable industry-academia collaborative system

• Leaders need to be adept at nurturing cultural acceptance of R&D outcomes as a change management process

Paradigmatic Shifts in

Exploration ProcessElliot Lake

Deposit Model

Unconformity Deposit Model

BeaverlodgeDeposit Model

Options for FutureUranium Exploration

NewTechnology for The Discovery of Unconformity

Deposits

New Deposit Model

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Paradigmatic Shifts in Exploration Process

Jim Marlatt, Raven Minerals Corp.Kurt Kyser, Queen’s Facility for Isotope Research