Positive signals from Boulder Creek

The Nome area in northwest Alaska is famous for its gold, but less well-known is the fact that it is also home to the largest uranium deposit so far discovered in the state. Abandoned by an oil company when the price of uranium plummeted along with other natural resources in the early 1980s, Boulder Creek (formerly known as Death Valley) is now being explored again by two Vancouver-based juniors in a joint venture, Full Metal Minerals and Triex Minerals.

Full Metal Minerals is one of the most active exploration companies in Alaska, with several gold properties around the state. Last September it joined forces with Triex, which specializes in exploring for uranium. This year Triex will begin earning its initial 65 percent interest in Boulder Creek as operator of the project, with a 3,000-meter drill program and follow-up surface exploration to identify targets away from the main deposit. Full Metal Minerals will provide Alaska knowledge to complement Triex's uranium expertise.

Houston Oil and Minerals completed 3,300 meters of core drilling in 52 holes at Boulder Creek. A resource estimate completed in 1981 outlined a resource of 1 million pounds of uranium oxide with an average grade of 0.27 percent and an average thickness of three meters. This resource has not been independently audited, however. The grade is above average for uranium deposits in the United States, which typically range between 0.1 percent and 0.4 percent, according to Michael Gunning, Triex's president and CEO.

Much higher grades are found in Canada's Athabasca Basin, which supplies about 30 percent of the world's uranium, but more uranium mines are needed to meet demand, Gunning said. Approximately 430 nuclear reactors around the world are consuming 175 million pounds of uranium annually, but only about 100 million pounds is being produced. The shortfall is made up from uranium inventories, recycling, and downblending from Russian nuclear warheads. Downblending is the opposite of enriching, the process by which uranium is converted for use in weapons.

Russia keeping material at home

Demand for uranium has been further stoked by Russia's decision to keep downblended material for its own nuclear fuel programs instead of selling it to Western power plants, as it previously did. Uranium inventories are beginning to run dry. The price of uranium has shot up recently, from $10 a pound in 2002 to almost $43 a pound today. This coincides with renewed interest in nuclear energy, as countries struggle to cope with the rising price of oil and to reduce carbon dioxide emissions.

"From a global perspective, there simply is not enough uranium to supply the world's reactors," Gunning told Mining News. "The United States has one-quarter of the world's reactors, and power is a big part of the quality of life in North America. When I was a kid, nuclear power was the green solution."

Even Alaska's remote villages are considering nuclear power as an alternative to the costly diesel fuel that they depend on. A small Toshiba nuclear power plant is under consideration for the village of Galena on the Yukon River. This plant could provide 50 megawatts of power, and Toshiba can also build 10 megawatt nuclear power plants. Demand for power on the Seward Peninsula, where Boulder Creek is located, is less that 10 megawatts at the moment, but Gunning believes that a nuclear power plant might be feasible in the future if it were to serve Red Dog lead-zinc mine or NovaGold's planned Rock Creek gold mine.

Company aims to become producer

Boulder Creek is one of Triex's two core properties because it is a known deposit rather than an exploration target, according to Gunning. The other property is Mountain Lake in Nunavut. "Our goal is to find a number of Boulder Creeks," Gunning said. "Triex is not a company that is into the uranium flavor of the day game, flipping land and getting into real estate." The company aims to become a small-scale producer, and views Alaska as a resource development-friendly region.

The nearest village to Boulder Creek is Elim (population 313), 16 kilometers away, and Nome is 160 kilometers southwest of the property. The drill program this season is starting later than planned because the airstrip at Boulder Creek is still covered with snowdrifts, but Triex hopes to mobilize in June. Bering Straits Native Corp. has already invited Triex to participate in land management meetings. The company spent about C$250,000 last September initiating ground geochemistry work and expects to spend between C$1 million and C$1.5 million on exploration at Boulder Creek this year, much of it on fuel and helicopter support.

Due to the low concentration of uranium at Boulder Creek, exposure to radiation won't be a serious concern for Triex employees, although there are basic safety precautions that have to be taken, such as wearing a dosimeter. Triex's exploration manager, Ross McElroy, has in-depth knowledge of the safety issues from working with uranium giant Cameco in the Athabasca basin. Gunning himself was formerly the principal mineral deposits research geologist for the Saskatchewan Geological Survey, and he has also explored in the Canadian Arctic with Teck Cominco.