|News Release 11-05|
Virginia Energy Resources Inc. (TSX.V:VAE) is pleased to announce the initiation of metallurgical studies for the Coles Hill project located in southern Virginia, USA. This work is being undertaken in accordance with the recommendations of the NI43-101 Preliminary Economic Assessment, which was announced on October 18, 2010 and posted on SEDAR December 2, 2010.
The Preliminary Economic Assessment relied upon previous metallurgical work completed by Colorado School of Mines Research Institute and Hazen Research in 1982, which focused on conventional uranium processing methods of that era. The historical metallurgical testing included agitated leaching of ground core samples with sulfuric acid and with sodium carbonate plus sodium bicarbonate. Because of high acid consumption, alkaline leaching was the recommended option despite showing only an 83.5% recovery rate compared to a 94% recovery rate with acid leaching.
The new planned metallurgical investigations will use core samples from the most recent drilling program. The goal of the test work is to develop a processing strategy that maximizes uranium recovery with reasonable capital and operating costs while minimizing the volume of tailings material. The planned test work includes:
These new metallurgical studies are being directed by Dr. Terry McNulty in conjunction with BRS Engineering and will be completed over an 8-10 week period at three separate facilities with expertise in the various testing procedures. An encouraging outcome with any of these techniques likely will lead to a larger scale test program. Future investigations will also include an evaluation of radiometric ore sorting, which has the potential to significantly reduce the volume of tailings generated by the operation.
- Determination of the uranium distribution by sieve fraction;
- Characterization of the uranium mineralization and accessory minerals;
- Completion of conventional agitated leaching tests with sulfuric acid and with alkaline solutions to confirm previous results;
- Evaluation of the technical feasibility of gravity concentration of the uranium minerals;
- Evaluation of flotation to separate carbonates and/or sulfides from the uranium minerals, thereby, reducing consumption of acid and/or oxidant in the leaching process;
- Evaluation of high-gradient wet and dry magnetic separation; and
- Potential process enhancement by attrition scrubbing with the goal of concentrating uranium minerals.
Dr. Terry McNulty is under contract with BRS Engineering to provide technical consulting services to the Coles Hill project. Dr. McNulty received a Doctor of Science degree from Colorado School of Mines and is a metallurgical engineer with several decades of involvement in the global mining industry. He was previously in operations and technical management for The Anaconda Company, as well VP-Technical Operations for Kerr-McGee Chemical Corp., and served as President and CEO of Hazen Research, before founding his own consulting firm. Dr. McNulty has advised on 22 uranium projects during the last 5 years.
Walter Coles Jr., President and CEO of Virginia Energy Resources, commented that, "If it is possible to economically separate the calcite from the ore, we may be able to adopt a processing methodology with a materially higher uranium recovery rate than the 83% used for the Preliminary Economic Assessment, which could in turn have an important positive impact on the Net Present Value of the Coles Hill project."
The National Academy of Science (NAS) is continuing its study on the safety of a modern uranium mining industry in the state of Virginia. The next meeting of the NAS study panel is scheduled for June 7-10 in Saskatoon, Canada. Representatives of the NAS recently stated that the study remains on track to be completed by December 2011. Pending a positive outcome from the NAS study, the state legislature would then be in a position to consider lifting the moratorium on uranium mining in Virginia.
While the state legislature considers the regulatory issues related to uranium mining, the on site management team of Virginia Uranium, Inc. will continue to advance the project from a technical perspective. Virginia Energy Resources (TSX.V: VAE) is the largest single outside shareholder with an almost 30% interest in Virginia Uranium Holdings, Inc. Virginia Uranium Holdings, Inc. owns 100% of Virginia Uranium, Inc., a company incorporated in the state of Virginia.
Virginia Energy Resources remains well capitalized to pursue its corporate goals. The company's cash position is $3.5 million, versus an administrative burn rate of less than $500,000 per year. In addition, Virginia Energy Resources' holdings of marketable securities have a current public mark-to-market value of approximately $8 million. Besides Virginia Energy Resources' almost 30% stake in the Coles Hill project, the company controls over 200,000 hectares of highly prospective claims in the Athabasca Basin of Saskatchewan and in the Otish Mountains of Quebec. Further, the company owns the Hawk Ridge copper-nickel project, also in Quebec.
The company's market value is just under C$17 million (based on the C$0.17 closing stock price on May 2, 2011 multiplied by the company's 97,514,238 shares outstanding), down from approximately $75 million in January 2011. The company will manage its resources carefully through this period of market dislocation. However, we are optimistic that lessons will be learned from the Fukushima accident that will support continued demand growth for safer and cleaner nuclear energy.
On Behalf of the Board of Directors
VIRGINIA ENERGY RESOURCES INC.
Walter Coles Jr., President & CEO
Neither TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.
This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. All statements other than statements of historical fact included in this release, including, without limitation, statements regarding future plans and objectives of the Company are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future results, events and objectives could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations include exploration and other risks detailed from time to time in the filings made by the Company with securities regulators.