North of 60 Mining News - The mining newspaper for Alaska and Canada's North

Cash Minerals Ltd. launched a 6,000-meter drill program at its Lumina uranium property in the Wernecke Mountains of east-central Yukon Territory earlier in October in response to outstanding results of a summer 2005 exploration program. The summer work confirmed uranium mineralization at Lumina ranging up to 7.67 percent (153.4 pounds per ton) over 1.4 kilometers.

Cash Minerals President and CEO Basil Botha said Oct. 12 the company was so "impressed and enthusiastic" with an average grade of 1.22 percent (24.4 pounds per ton) U3O8 at Jack Flash, the property's main mineral showing, during summer 2005 sampling and radiometric prospecting that it decided to conduct the drill program right away.

A second mineral showing, Ram, 4.5 kilometers north of the Jack Flash showing, is exposed in two trenches 50 meters apart. Chip sampling across this vein by previous owners assayed 0.910 percent (18.2 pounds per ton) U3O8 over 2 meters and 0.615 percent (12.3 pounds per ton) U3O8 over 1 meter. The trenches did not fully expose the width of the vein, and it is open along strike in both directions under overburden, the company said.

"Initial work will focus on the Ram target because of available water, but ultimately numerous targets will be tested, and these of course will include Jack Flash," Botha said.

The Lumina property measures about 20 square kilometers and hosts widespread uranium enriched talus and glacially dispersed boulders, the sources of which will be drilled in 2005-2006, the company said.

Cash Minerals is on target to earn up to a 75 percent interest in six uranium properties in the Yukon under option agreements with Twenty-Seven Capital Corp., Botha said.

He said Lumina and Igor, two of the company's most promising uranium properties in Yukon Territory, "are not dissimilar" to the uranium-rich Athabasca Basin in Saskatchewan.

Coal bonanza

Cash Minerals is also developing a massive coal deposit about one and a half hours northwest of Whitehorse. The main area of exploration, Division Mountain, is about 20 kilometers west of the Klondike Highway at Braeburn and near the territory's power grid.

Botha said the company drilled five holes this year to bring 13 million tons of resource into the measured category at Division Mountain, resulting in total measure resources of 51 million tons of bituminous low-ash, low carbon coal in the 100 percent-owned deposit.

Most of the area of detailed exploration at Division Mountain lies within five coal leases which grant mining rights for a renewable 21-year term. In addition the company owns 22 Territorial Coal Exploration Licenses encompassing about 360,000 hectares of coal-bearing stratigraphy in the Division Mountain area.

"When we drilled the southernmost hole, we encountered 87 feet of coal down 180 meters, so we believe there's coal under this entire mountain," he said during a visit to the deposit Sept. 22.

Cash Minerals plans to complete a feasibility study this month or in early November for an open pit mining operation at Division Mountain in which it would extract 1.2 million tons of coal a year for export to steel manufacturers in Pacific Rim markets.

"We would move along strike and rehabilitate the land as we go," Botha said. "We would have an open pit of about 1,000 meters and backfill as we go."

Estimated startup for the mine is late 2007 or early 2008.

The company is also working with the Yukon and Alaska governments to arrange hauling the coal to the Port of Skagway to be loaded onto barges and shipped to Asia.

Botha said Cash Minerals is also considering the possibility of providing coal for a coal gasification plant. "It's early days yet, but we're been offered to become involved in a project," he said.

It takes a 3:1 ratio of coal to produce oil, he added.