Energy Metals (EME) is a dedicated uranium company with eight exploration projects located in the Northern Territory (NT) and Western Australia covering over 2,700 km-2.

Most of the projects contain uranium mineralisation discovered by major companies in the 1970s, including the advanced Bigrlyi Project (NT).

Energy Metals is well placed to take advantage of the favourable outlook for uranium as nuclear power continues to play an increasing role in reducing global carbon emissions. Importantly Energy Metals is one of only five companies that currently hold all the required permits and authorities to export Uranium Oxide Concentrates (UOC) from Australia. The Company has completed its first shipment of UOC and is negotiating with Australian uranium producers to enable further shipments from Australia for resale, primarily to major Chinese utility China General Nuclear Power Group (CGN), ultimately Energy Metals' largest shareholder.

China Uranium Development Company Limited, Energy Metals' largest shareholder (with 66.45% of issued capital), is a wholly owned subsidiary of CGN. As of 31 December 2019, the installed capacity of CGN's operating nuclear generating plants was 27,140MWe from 24 nuclear power units with five other power units of 5,780MWe capacity under construction in various locations across China. Additionally, CGN is one of only two companies authorised by the Chinese government to import and export uranium.

This unique relationship with CGN gives Energy Metals direct market exposure as well as access to significant capital and places the Company in a very strong position going forward.

NORTHERN TERRITORY

Bigrlyi Joint Venture (EME 72.39%)

The Bigrlyi Joint Venture comprises 11 granted exploration licences in retention (ELRs), one granted EL, and several applications within the Ngalia Basin, located approximately 350km northwest of Alice Springs. EME operates the Joint Venture in partnership with Northern Territory Uranium Pty Ltd (NTU) and Southern Cross Exploration NL (SXX).

The Bigrlyi Joint Venture has been the subject of significant exploration activity since 1973, including over 1,040 drill-holes, metallurgical test-work and mining studies focussed on the flagship Bigrlyi deposit, which comprises a number of sub-deposits over a 11km strike length. The Bigrlyi project is characterised by relatively high uranium grades, vanadium credits and excellent metallurgical recoveries.

The historic Karins uranium deposit is part of the Bigrlyi Joint Venture and a JORCcompliant resource estimate was released to the ASX in 2015. In 2015 a maiden JORC (2012) resource estimate was announced for the historic Sundberg deposit, which is part of the Bigrlyi Joint Venture, and a satellite of the larger Walbiri deposit.

On 4 July 2019, Marenica Energy Ltd (ASX: MEY) announced a conditional agreement to acquire the assets of NTU (Energy Metals' JV partner) from current owner Optimal Mining Ltd (OML). MEY announced completion of the acquisition of OML's 20.82% interest in the Bigrlyi JV on 16 December 2019.

Walbiri Joint Venture (EME 77.12%)

ELR45 covers part of the historical Walbiri deposit and part of the Hill One satellite deposit. The project is a joint venture with Northern Territory Uranium Pty Ltd (NTU), with EME as the operator. Energy Metals holds a 77.12% beneficial interest in the JV. A JORC (2012) mineral resource estimate was announced for the Walbiri deposit in 2015 confirming Walbiri as the second largest sandstone-hosted deposit in the Ngalia Basin after Bigrlyi. Marenica Energy Ltd announced the acquisition of NTU, which includes a 22.88% interest in the Walbiri JV, on 16 December 2019.

Malawiri Joint Venture (EME 76.03%)

ELR41 covers the historical Malawiri deposit. The project is a joint venture with NTU with EME as the operator. Energy Metals holds a 76.03% beneficial interest in the JV. EME advanced the Malawiri project to JORC-compliant resource status with release of a mineral resource estimate on 14 December 2017. Marenica Energy Ltd announced the acquisition of NTU, which includes a 23.97% interest in the Malawiri JV, on 16 December 2019.

JV Activities (December 2019 Quarter)

Energy Metals is committed to improving the economics of its flagship Bigrlyi project and this year has initiated a program to enhance the value of vanadium as a by-product commodity in a future Bigrlyi mining operation. Bigrlyi sandstone-hosted uranium-vanadium ores contain vanadium in various mineral forms that can be extracted by conventional acid leaching processes without the need for the extreme conditions required in the processing of more widely known magnetite-hosted vanadium ores. Bigrlyi uranium-vanadium ores are mineralogically identical to those of the Colorado Plateau district of the USA, which has a decades-long history of comining and co-recovery of uranium and vanadium; the extraction and recovery processes of uranium and vanadium from sandstone-hosted deposits are therefore well understood.

The predominant industrial use of vanadium, at present, is as a steel strengthening agent; however, the metal has growing future uses in energy storage technologies, particularly redox flow batteries, which is the technology of choice in medium-scale storage of photovoltaicallygenerated energy. Although the significant price risesin vanadium seen in the latter part of 2018 was not sustained through 2019, demand is expected to grow in future years. The current vanadium price is approx. $US 6/lb V2O5, which is near the long-term average vanadium price and compares with the current uranium spot price of $US24.6/lb U3O8.

Vanadium Mineralisation Modelling. Modelling of uranium-vanadium mineralisation at the Bigrlyi deposit has previously been constrained by the uranium distribution, resulting in vanadium resources being reported on the basis of uranium cut-off grades. However, it has been recognised since the 1990s that a larger halo of vanadium mineralisation surrounds uranium mineralisation and that parts of the deposit are significantly vanadium-rich, yet uranium-poor; these parts of the deposit have not been adequately modelled and are expected to contribute additional vanadium resources. This quarter, a new vanadium mineralisation model together with an updated Exploration Target (ET) for vanadium was announced for the Bigrlyi deposit (refer ASX: EME release of 4 December 2019 and the caveats mentioned therein). The models included construction of vanadium wireframe volumes for a 100 ppm V2O5 cut-off grade and implicit 3D modelling of the distribution of vanadium, uranium and calcium (calcium being a proxy for acid-consuming carbonate) using Leapfrog software.

Ngalia Regional Project (EME 100%)

The Ngalia Regional project comprises twelve 100% owned exploration licences, applications and exploration licences in retention located in the Ngalia Basin, between 180km and 350km northwest of Alice Springs in the Northern Territory. The tenements are contiguous and enclose the Bigrlyi project as well as containing a number of uranium occurrences, including part of the historic Walbiri deposit and the Cappers deposit.

Nine of the twelve Ngalia Regional exploration licences have been granted; the three remaining applications (ELs 24450, 24462 and 27169) are located on Aboriginal Freehold (ALRA) land and Energy Metals is negotiating access agreements with the Traditional Owners through the Central Land Council (CLC). A number of high priority targets have been identified on the 100% owned tenements and Energy Metals is undertaking a program of systematic evaluation of these prospects, some of which were originally discovered in the 1970s. In February 2014, EME announced maiden resource estimates for the Bigwest, Anomaly-15 East and Camel Flat satellite deposits and in October 2015 EME announced inferred JORC resources for the historical Walbiri, Sundberg and Hill One deposits.

Activities (December 2019 Quarter)

A prospectivity and tenement review was completed during the quarter with recommendations made for the surrender of non-prospective ground, providing savings on both tenement holding costs and exploration commitments. The proposed tenement changes will be implemented progressively during the first half of 2020 as anniversaries fall due.

Macallan (EME 100%)

The Macallan project comprises a single exploration licence application (ELA27333), located 460 km NW of Alice Springs and 140 km from Bigrlyi. The tenement covers a strong 3km-wide bullseye radiometric anomaly. The Macallan anomaly lies within the Wildcat Palaeovalley, an ancient valley system that drains into Lake Mackay to the southwest. The Macallan anomaly most likely represents a surficial accumulation of uranium minerals associated with the Wildcat palaeodrainage system, although other explanations are possible.

ELA27333 lies on land under Aboriginal Freehold title and access is subject to negotiation with the Traditional Owners and the CLC. The negotiation period has been extended until October 2020 and the CLC are currently reviewing EME's comments on a draft exploration agreement.

Contact:

Shuqing Xiao

Tel: 61 8 9322 6904

Email:enquiry@energymetals.net

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