Ogchon Uranium Project
Woulfe's uranium tenements lie within the Okcheon Metamorphic Belt (OMB), a north east-trending fold-and-thrust belt about 30km wide and extending some 150km through the middle of Korea. The regional city Daejeon lies within the OMB, located some 150km south-south east of Seoul.
Daejeon is a major research and learning center, and is known as the Silicon Valley of Korea. Daejeon features a technology cluster referred to as Daedeok Innopolis which hosts government research institutes, government invested corporate research institutes, corporate research centers and venture companies. The cooperation between these communities produces remarkable innovation and commercialization of available technologies. When the Boston Consulting Group released a list of nations leading in innovation, Korea was ranked number two, just below Singapore.
Research institutes in Daedeok include the Korea Atomic Energy Research Institute (KAERI), the National Fusion Research Institute and the Korea Institute of Energy Research (KIER). The Korea Institute of Geosciences and Minerals Resources (KIGAM) is also located in Daejeon.
The Palaeozoic metasediments of the Guryongsan Formation (or Guryongsan Slate) in the OMB contain a sequence of psammites, pelites and limestone and include a sequence of carbonaceous shales that host anomalous uranium and vanadium mineralization. The carbonaceous shale sequence is up to 200m in thickness and is considered to be a newly recognized example of syngenetic metal-rich black shale, which is comparable to the uranium-bearing metal-rich shales of the Chattanooga Shale of the south eastern United States and the Alum Shale of southern Sweden. The uraniferous black shales are continuous over a strike length of approximately 100km.
The Guryongsan Slate lies within the Changri Formation which rests unconformably on the Iwonri, Hwanggangri and Pugnori Formations. This unconformity with persistent lithology and unique characteristics throughout its distribution indicates the black shales were deposited in a marine environment.
Two or three low grade, uranium-bearing coaly graphite slate beds are interbedded within the metasediments. These pyritic, carbonaceous shales contain highly carbonized kerogen and graphite, which resembles coaly shale or anthracite. Individual graphitic carbonaceous slate, shale, schist and phyllite beds vary in thickness from 1m to 40m and contain average uranium grades ranging from 100ppm U3O8 up to 500ppm U3O8.
Graphite, quartz, calcite, phosphate nodules, pyrrhotite, haematitic pyrite and aluminosilicate porphyroblasts and secondary uranium minerals can be identified visually. Heavy minerals include tourmaline, zircon and apatite. In addition, feldspar, vanadium-mica, biotite, chlorite, tremolite, apatite, uraninite, Ti-oxides, barite, Fe-oxides, sphalerite and chalcopyrite can be observed microscopically.
Coal occurs mostly as masses of small black particles and some as coatings on other mineral constituents. The uranium minerals are disseminated along the minor fractures developed in the coaly matrix and are loosely bound to the coal surfaces, with only minor concentrations in the fine grained matrix. Colloform pitchblende is believed to have been originally precipitated syngenetically in black mud. Autoradiographs (Kim, 1989) of slate from Dukpyong show clear images of primary uranium associated with graphite, apatite nodules and some oolitoids. Conclusive evidence for the syngenetic origin of uranium is provided by a uranium-rich mud dyke injected into a uranium-poor silt layer during soft sediment compaction.
The belt is variably intruded by Cretaceous granites. Field observations consistently indicate that peak uranium values are associated with granitic structures intersecting carbonaceous sediments. There is also an apparent proximal spatial association between the occurrence of the intrusives and regionally elevated uranium values in the carbonaceous metasediments.
The uraniferous mineralization within the OMB has been extensively researched and explored, with some 16 airborne radiometric anomalies previously identified by KIGAM and university researchers within this 90 km long belt. During 1972-1985, KIER explored South Korea for uranium and some 13 deposits within the OMB were evaluated by diamond drilling (335 drill holes for 65,286m of core). The drill results are documented in a report compiled by KIER, dated 1986 with the title, "Studies on uranium geophysical exploration in Korea."
The most significant deposits are located in the Daejeon/Geumsan area, and include the Chubu, Soryong and Samgoe carbonaceous shale uranium deposits, and the Kolnami multi-veined uranium-copper skarn deposit hosted in contact metamorphosed hornfelsic sediments. The Daejeon/Geumsan deposits contain over 52 million pounds of uranium oxide at an average grade of 289ppm over a strike length of approximately 6km. Chubu is the largest known uranium deposit in South Korea and was drilled in detail at 50m section line spacing.
Metallurgical studies by two South Korean universities in 2005 have shown microbacterial leaching recovers up to 80% of the uranium from the deposits of the OMB. For lower grade uranium deposits this may potentially be the most effective processing method. Uranium minerals identified are uraninite, autunite, and meta-torbernite. These occur together with phosphorite minerals, vanadium, barium, zircon, haematite, pyrite, pyrrhotite, molybdenite, nickel, lead and chromium.
The uraniferous black shales within the OMB are covered by some 200 tenements formulated by the Ministry of Mines from sub-blocks within a local grid projection (Tokyo grid). Each sub-block covers a 1 minute by 1 minute block measuring approximately 1.88km by 1.50km with an approximate area of 277ha or 2.8km2.
The sub-blocks lie within several geological sheet areas; from south east to north east they are Geumsan, Daejeon, Okcheon, Boeun, Miwon, Yongyouri, Goesan and Chungu.
To obtain a Registered Mining Right (RMR) in South Korea, a threshold value of 200ppm uranium in outcrop must be identified by the company within a granted Mining Application (MA) area, subsequently verified by a registered geologist and then finally verified by a government geologist. If the area is free of statutory restriction and exclusion zones, the mining license may then be granted.
The MA is granted for a period of six months and the registered geologist's report must be submitted within that period.
Woulfe Mining applied for multiple MAs in 2007 covering many of the prospective areas. Due to certain constraints and initially being unaware of the six month MA period, the Company was successful in acquiring only seven RMRs, with many blocks being acquired by other parties. Also, many of the more prospective areas such as the Soryong, Samgoe and Kolnami deposits were situated within exclusions zones such as green zones, provincial parks and water catchments.
The Company has since applied for 11 additional blocks, with requisite values identified in outcrop within four blocks, and seven yet to be evaluated.
Geologically, the Daejeon/Geumsan area consists of a 25km long north east striking tightly folded sequence of Changri Formation with interbedded Guryongsan Slate, with Midongsan Quartzite and Ungyori Formation to the west. Crystalline of the Bibong Limestone is present. The sequence has been folded into a broad antiformal structure, which has resulted in the development of two sub parallel horizons of Guryongsan Slate.
Uranium mineralization is contained within multiple folded uraniferous-graphitic slate beds of the Guryongsan Slate.
Historic resource estimates were prepared by KIER for the Chubu, Soryong, Samgoe, Yokwang, Seongdang and Kolnami deposits.
Woulfe has been granted five RMRs and four MAs in the Daejeon/Geumsan area.
The Miwon area is the least explored area of the OMB, as efforts by Korean government geologists were focused primarily on the Dukpyong and Chubu deposits. Graphite mining has been undertaken in the past in the Miwon area, but was discontinued in the early 1970s when elevated radioactivity levels associated with the Guryongsan Formation were recognized.
Geologically, the Miwon area consists of a 30km long, north east striking, tightly folded continuous sequence of Changri Formation with interbedded Guryongsan Slate. The Midongsan Quartzite and Ungyori Formation outcrop to the west and Hwangganri Formation to the east. Crystalline limestone of the Bibong Limestone is present in the upper part of the Changri Formation.
Uranium mineralization is contained within multiple folded, graphitic black slate beds of the Guryongsan Slate.
Historic resource estimates were prepared by KIER for the Yongyouri-Gyimanri, Miwon-Isikri-Jukeumri and Boeun deposits, and several other prospects including Gwebongsan, Satanri, Bunjeonri, Jogokri, Gyewonri and Yangsuri have yet to be drill tested.
Yeonwha Lead-Zinc Property
The Yeonwha 1 lead-zinc property lies approximately 20 kilometers to the south east of Sangdong within the historic Taebaeksan mining district of South Korea.
The Yeonwha 1 Complex consists of three past-producing mines, Taebaek, Bonsan and Dongjeom. These deposits were mined from the early 1960s to the early 1990s and were regarded as the most important mines in the Taebaeksan district.
The deposits are connected by underground development and the ore was hauled underground from the Taebaek and Dongjeom mines to the central processing facility located near the Bonsan mine. Production from Bonsan and Dongjeom reportedly ceased in 1991 and production from Taebaek appears to have ceased in 1993.
Yeonwha I lies approximately 4 kilometers to the south west of the Yeonwha II property which is currently being evaluated by a Korean joint venture group headed by KORES.
The deposits are hosted within limestone, dolomites and carbonaceous sediments of the Cambrian Pungchon and Ordovician Myobong Formations. These formations have been intruded by early Triassic lamprophyre stocks and Cretaceous quartz monzonite porphyry dykes.
The mineralization occurs in skarns within the limestone and shale and is hosted within tabular veins and breccia pipes that form discrete mineral bodies within each deposit.
One of the largest of the mineral bodies, Taebaek 1 within the Taebaek deposit, occurs within a sub-vertical tabular vein that attains a maximum thickness of around 9 meters. It has been mined over a strike extent of around 400 to 500 meters and a vertical extent of approximately 400 meters. The top of the vein is around 400 meters below surface.
Detailed "mineral reserves and resources" were documented in a 1991 report by KORES prior to the cessation of mining. The report quotes "reserves" and "resources" as categories that can be translated from Korean as proved and inferred, respectively, which however cannot be assumed to be equivalent to similar terms used under the JORC and NI 43-101 requirements, and therefore the KORES estimates are not compliant and cannot be relied on.
The historical non-compliant resources include total 'proved reserves' for the three deposits of 3.6 million tonnes grading 3.5% lead and 4.8% zinc, of which 96% was contained in the Taebaek deposit, and total 'inferred resources' of 3.6 million tonnes grading 3.4% lead and 4.8% zinc, of which 73% was contained in the Taebaek deposit.
A qualified person has not completed sufficient work in order to classify historical resource estimates prepared by Kores for the Taebaek property as current mineral resources or reserves and the Company is not treating these historical estimates as prepared by KORES or otherwise as current mineral resources or reserves but as historical estimates for informational purposes only that should not be relied upon
Pursuant to a three-year option agreement dated October 9, 2006, referred to as the "Jangseong Option Agreement," Woulfe Mining issued the required notice to the Vendors to exercise the option on October 9, 2009.
The Jangseong Option comprised two contiguous blocks, referred to as Yeonwha, which comprises five mining titles (Registration #s 76094, 76361, 76499, 76500, 76501); and Taebaek, which comprises three mining titles (Registration #s 76359, 76360, 76505). The company has since applied for an adjacent mining title and the total area of the titles is 2,133 hectares.
Pursuant to the Option Agreement, Woulfe was required to pay US$50,000 in cash and an additional US$50,000 in cash or common shares of the company, at the discretion of the company (at the average closing price of the common shares for the 10 day trading average price prior to the payment date) in order to acquire a 100% interest for both the Yeonwha and Taebaek blocks. Accordingly these payments were made.
Woulfe Mining also must pay a further US$1 million in cash and US$ 1 million in cash or common shares of the company on development of the project, plus a 2% net smelter revenue royalty to the Vendors. Additionally, in order to keep the option in good standing, the company must complete a pre-feasibility study on the property within five years of the transfer of title to the company.
The Taebaek and Yeonwha properties form part of the Company's the longer term profile. The Company plans to model and evaluate these properties in the future in order to be determine their rank in the Company's project priority list for longer term development.