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Blue Sky Uranium Corp (3)
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Blue Sky pegs Ivana at 19.1M lb U3O8 inferred

2018-03-05 09:17 ET - News Release

Mr. Nikolaos Cacos reports


Blue Sky Uranium Corp. has provided the initial independent mineral resource estimate for the Ivana deposit at the company's 100-per-cent-owned Amarillo Grande uranium-vanadium project, in Rio Negro province, Argentina.


  • Inferred mineral resource estimate of 23.9 million tonnes averaging 363 parts per million (ppm) U308 containing 19.1 million pounds of U3O8 at a 100 ppm uranium cut-off.
  • Mineralization at Ivana is hosted by loosely consolidated sediments from surface to 24-metre depth; it is expected that resources would be extracted via open-pit methods.
  • Metallurgical and beneficiation test work in progress to provide additional data for a maiden preliminary economic assessment in 2018.
  • The Ivana deposit remains open for expansion.
  • Additional resource potential exists in the Ivana area and throughout the 140-kilometre-long trend at the Amarillo Grande project.

"This first resource estimate represents the biggest uranium discovery in Argentina in the last 40 years and it represents for Blue Sky a major step towards our goal of defining a low-cost regional-size uranium producing district," commented Nikolaos Cacos, Blue Sky president and chief executive officer. "We are excited to move forward with a preliminary economic assessment this year, particularly as the project remains open for expansion."

A National Instrument 43-101 technical report supporting disclosure of this mineral resource and containing additional details will be filed by Blue Sky on SEDAR within 45 days of this press release.

Results from continuing metallurgical studies and preliminary beneficiation studies are expected by the end of the first quarter. These data will contribute to a preliminary economic assessment (PEA) for the Ivana deposit, which is expected to be completed before the end of the year.

The arcuate (C) shape of the Ivana deposit is believed to represent a preserved sector of a regional mineralized redox-front, which often include more than one deposit. Therefore, follow-up drilling programs will test for lateral extensions to the currently defined deposit, as well as previously recognized local targets identified by airborne and hand-held radiometric surveys and geological modelling.

Ivana location, geology and metallurgy

The Ivana deposit is located in the southernmost of three target areas that comprise the Amarillo Grande uranium-vanadium project. The project has year-round access through a well-maintained gravel road, and is in a semi-arid area with low rainfall and population density. Mineralization was first identified at Ivana after field follow-up of a 2010 regional high-resolution airborne radiometric and magnetic survey.

The Ivana deposit displays characteristics of surficial-type and sandstone-type roll front uranium-vanadium deposits. Mineralization at Ivana includes primary coffinite and uraninite, in pore spaces of poorly consolidated sandstones and conglomerates, in addition to peripheral secondary carnotite, which occurs interstitially to and coats pebbles and clasts in loosely consolidated sandstones and conglomerates. The Amarillo Grande project is believed to have district-scale potential for discovery of similar styles of mineralization.

The deposit is characterized by two stacked zones of uranium mineralization, the upper zone and the lower zone. The two zones occur together through most of the deposit but there are localized areas where only one zone is present. The upper zone averages 2.7 metres in thickness, with a maximum of 10 metres, while the lower zone has a maximum of 20 metres and has an average thickness of 6.2 metres. Plan view of the modelled Ivana deposit can be found at the company's website.

Preliminary metallurgical and beneficiation studies for Ivana are under way and expected to be completed by the end of the first quarter of 2018. Initial alkaline leach testing on composite samples with carnotite-mineralization resulted in recovery of 95 per cent of the uranium in two hours (see news release dated Jan. 22, 2018). Continuing metallurgical testing includes initial work on coffinite (plus uraninite) mineralized material, as well as physical beneficiation assessments. The beneficiation testing is similar to that carried out previously on samples from the Anit target area of the Amarillo Grande project (see release dated Feb. 7, 2011). The Anit preliminary beneficiation test work demonstrated that a very simple wet screening method could be utilized to reject unmineralized coarse clastic material, producing a lower-mass higher-grade concentrate containing a high percentage of the in situ uranium.

Mineral resource estimate details

Mineral resources, which are not mineral reserves, do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues. The quantity and grade of reported inferred resources are uncertain in nature and there has been insufficient exploration to classify these inferred resources as indicated or measured, and it is uncertain if further exploration will result in upgrading them to an indicated or measured category.

               Inferred resources -- base case at 100 ppm uranium cut-off grade

Zone       Tonnes (t)  U (ppm)     V  (ppm)  U3O8 (ppm)         U308 (%)    Contained U308 (lb)    

Upper      3,200,000      132          131         156            0.016              1,100,000              
Lower     20,700,000      335          105         395            0.040             18,000,000             
Total     23,900,000      308          109         363            0.036             19,100,000             

1. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

2. The mineral resources in this estimate were not constrained within a conceptual pit shell 
   owing to the shallow nature of the deposit (zero to 24 m) and blocks above cut-off being 
   reasonably contiguous.

3. The 100 ppm uranium cut-off grade is based on operative costs of $12/t, a price of $50/pound 
   U3O8, and a process recovery of 90 per cent. A density of 1.84 was applied.

4. It is reasonably expected that the majority of inferred mineral resources could be upgraded 
   to indicated mineral resources with continued exploration.

5. The resource was estimated within distinct zones of elevated uranium concentration occurring 
   within the host sediments. Vanadium is associated with uranium and is estimated within the 
   same zones. There is no indication that vanadium occurs outside of the elevated uranium zones 
   in the Ivana deposit area in sufficient concentrations to justify developing estimation 
   domains focused on vanadium.

The mineral resource estimate in the attached tables has been prepared by Bruce M. Davis, FAusIMM, BD Resource Consulting Inc., and Susan Lomas, PGeo, Lions Gate Geological Consulting Inc. who are both independent qualified persons as set forth by National Instrument 43-101. The overall effective date of this resource estimate is Feb. 28, 2018.

Mineral resource estimates are made from a 3-D block model based on geostatistical applications using commercial mine planning software (Geovia Gems, Version 6.7.4). The block model has a nominal block size measuring 50 by 50 by two m and utilizes data derived from 427 drill holes in the Ivana deposit. The resource estimate was generated using reverse circulating (RC) drill hole sample assay results and the interpretation of a geological model which relates to the spatial distribution of uranium and vanadium. Interpolation characteristics were defined based on the geology, drill hole spacing and geostatistical analysis of the data. The effects of potentially anomalous high-grade sample data are controlled by top cuts and limiting the distance of influence during block grade interpolation. The grade models have been validated using a combination of visual and statistical methods. The resources were classified according to their proximity to the sample data locations and are reported, as required by NI 43-101, according to the 2014 CIM (Canadian Institute of Mining) Definition Standards for Mineral Resources and Mineral Reserves. Model blocks estimated by three or more drill holes spaced at a maximum distance of 200 metres are included in the inferred category. The estimate of inferred mineral resources is reported without a limiting pit shell due to the shallow nature of the deposit (from zero to 24 metres below surface) and the majority of blocks above cut-off are reasonably contiguous. Additional information about the resource modelling methodology will be available in an NI 43-101 technical report within 45 days of this news release.

U cut-off (ppm)  Zone  Tonnes (t) U (ppm) V (ppm) U3O8 (ppm) U308 (%) Contained U308 (lb)

50              Upper 10,800,000      88     108        104    0.010           2,500,000
50              Lower 30,900,000     248      97        293    0.029          19,900,000
50              Total 41,700,000     207     100        244    0.024          22,400,000
100             Upper  3,200,000     132     131        156    0.016           1,100,000
100             Lower 20,700,000     335     105        395    0.040          18,000,000
100             Total 23,900,000     308     109        363    0.036          19,100,000
150             Upper    400,000     223     192        263    0.026             200,000
150             Lower 15,200,000     413     115        487    0.049          16,300,000
150             Total 15,600,000     408     117        481    0.048          16,500,000
200             Upper    200,000     326     243        384    0.038             200,000
200             Lower 11,600,000     487     123        574    0.057          14,700,000
200             Total 11,800,000     485     125        571    0.057          14,900,000
250             Upper    100,000     367     257        432    0.043             100,000
250             Lower  9,300,000     552     132        651    0.065          13,400,000
250             Total  9,400,000     550     134        649    0.065          13,400,000

Quality assurance and quality control

The resource estimation was based on 427 RC drill holes, representing 6,577 metres of drilling with one-metre samples. The drilling was completed in two phases starting in January, 2017, and finishing in January, 2018. Only two holes were inclined, and 425 holes were vertical. Bedding and mineralized horizons are approximately horizontal so vertical samples are believed to represent true thickness. The resource area is typically covered by drill holes on a 100- by 100-metre spacing, however holes on the periphery of the deposit were spaced as much as 400 metres apart. A summary of hole locations and significant intervals for the 427 RC holes can be viewed at the company's website.

The drilling program was carried out using an Roc L8 and FlexiROC D65 drill rigs from Atlas Copco, ore-control track-mounted rigs adapted to RC with double and triple cyclone, respectively, to reduce the dust loss during sampling and automatic sampling. The difficulties encountered n casing every hole, due to the presence of very poorly or unconsolidated sediments, resulted in limited gamma probe surveying of drill holes. Approximately half of the holes were surveyed by a senior geophysicist using a natural gamma probe previously calibrated at the Comision Nacional de Energia Atomica facility (Atomic Energy National Commission, CNEA). Samples were sent to Bureau Veritas Minerals of Mendoza, Argentina, for preparation by drying, crushing to 80 per cent passing 10 mesh and then pulverizing a 250-gram split to 95 per cent passing 150 mesh. Pulps were sent to Bureau Veritas Commodities Canada Ltd. for analysis of 45 elements by means of inductively coupled plasma mass spectrometry (ICP-MS) following a four-acid digestion (MA-200). Samples over 4,000 ppm uranium are reassayed, after phosphoric acid leach, by inductively coupled plasma electron spectrometry (ICP-ES). Approximately every 10th sample a blank, duplicate, or standard sample was inserted into the sample sequence for quality assurance/quality control (QA/QC) purposes.

Qualified persons

The results of the company's drilling program were reviewed, verified (including sampling, analytical and test data) and compiled by the company's geological staff under the supervision of Dr. David Terry, PhD, PGeo. Dr. Terry is a director of the company and a qualified person as defined in National Instrument 43-101. The contents of this news release have been reviewed and approved by Dr. Terry.

The mineral resource estimate and associated information in this news release was prepared under the direction of Bruce Davis, PhD, FAusIMM, of BD Resource Consulting Inc., and Susan Lomas, PGeo, of Lions Gate Geological Consulting Inc. Based on education, work experience relevant to this style of mineralization and deposit type, and membership in a recognized professional organization, both Dr. Davis and Ms. Lomas are independent qualified persons (QP) within the requirements of NI 43-101 for the purposes of the mineral resource estimate contained in this release. Both Dr. Davis and Ms. Lomas have reviewed and approved this news release.

About the Amarillo Grande project

This new 140-kilometre-long uranium district was first identified, staked and underwent preliminary exploration by Blue Sky from 2007 to 2012 as part of the Grosso Group's strategy of adding alternative energy focus to its successful portfolio of metals exploration companies. The proximity of several major targets suggests that if resources are delineated at more than one area a central processing facility would be envisioned. The area is flat-lying, semi-arid and accessible year-round, with nearby rail, power and port access.

The near-surface mineralization, ability to locally upgrade, amenability to leaching and central processing possibility suggest a potentially low-cost development scenario.

About Blue Sky Uranium Corp.

Blue Sky Uranium is a leader in uranium discovery in Argentina. The company's objective is to deliver exceptional returns to shareholders by rapidly advancing a portfolio of surficial uranium deposits into low-cost producers. Blue Sky has the exclusive right to over 434,000 hectares (equivalent to 1,072,437 acres) of property in two provinces in Argentina. The company's flagship Amarillo Grande project was an in-house discovery of a new district that has the potential to be both a leading domestic supplier of uranium to the growing Argentine market and a new international market supplier.

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