Zuuvch Ovoo Project

Drilling operation

Since 1996, COGEGOBI* has been continuously carrying out geological reconnaissance and exploration work in the Dornogobi and Sukhbaatar aimags, in southeastern Mongolia. These works have been conducted in accordance with the law on minerals adopted by the Mongolian parliament, and in compliance with the strictest safety, security and environmental standards.

Major achievements to date include the discovery of the Dulaan Uul deposit in 2002 and the world class Zuuvch Ovoo deposit in 2010, which significantly increased Mongolia’s overall uranium resources.

* COGEGOBI: Exploration subsidiary of Orano.



From exploration to mining project development


1996-1997

Creation of COGEGOBI & preliminary geological reconnaissance in the Gobi desert

2002

Discovery of Dulaan Uul deposit

2006

May: Cooperation agreement with Mongolian Ministry of Industry and Trade

2009

October: Cooperation Agreement with Mongolia’s Nuclear Energy Agency

2010

Discovery of Zuuvch Ovoo deposit

2011

June: Successful In Situ Recovery (ISR) test at Dulaan Uul siteAugust: Registration of Dulaan Uul resources, estimated at 6,260 metric tons

2013

February: Registration of Zuuvch Ovoo resources, estimated at 54,640 metric tonsSeptember: Mitsubishi Corporation acquired 34% equity interest in AREVA MongolOctober: AREVA Mongol and MonAtom sign Shareholders’ Agreement for the governance of the Joint Venture, AREVA Mines

2015

February: Approval of Feasibility Study of Dulaan Uul and Zuuvch Ovoo uranium deposits, to be mined by ISR, and ore treatment in Ulaanbadrakh sum of Dornogobi province by Professional Council of the Mineral Resources of MongoliaJune: Granting of 3 mining licences for Dulaan Uul and Zuuvch Ovoo uranium deposits

2016

January: Registration of Dulaan resources, estimated at 4,750 metric tonsJuly: Granting of 3 mining licenses

2017

June: Mon-Atom takes a share in the capital of the Joint Venture

2018

January: AREVA Mines becomes Badrakh EnergyPilot plant construction completedCooperation agreement signed with the Ulaanbadrakh sum and the Zuunbayan baghEvaluation of new opportunities for the project, if necessary, detailed engineering studies / Decision on the start of engineering and construction work for uranium processing plant

1996-1997 2002 2006 2009 2010 2011 2013 2015 2016 2017 2018

Zuuvch Ovoo pilot test

The Zuuvch Ovoo uranium deposit discovered by Cogegobi has become one of the 10 biggest uranium deposits discovered in the world in the past 20 years. Today Badrakh Energy holds 3 mining licenses for the Zuuvch Ovoo uranium deposit and Dulaan Uul deposit covering Dulaan Uul and Umnut areas in the Dornogobi province.

Badrakh Energy has built the facilities to perform tests at the Zuuvch Ovoo site. The tests will be launched once all administrative permits are granted to Badrakh Energy.

In-Situ Recovery (ISR) is the method considered for mining the Zuuvch Ovoo uranium deposits. The geological conditions necessary for mining by ISR are present in the Zuuvch Ovoo area.

Dulaan Uul Test (2010-2011)

COGEGOBI carried out an in-situ recovery technology test at the site of the Dulaan Uul between December 2010 and June 2011, with the authorization of the Mongolian Nuclear Energy Agency and the Mongolian Ministry of Environment and Green Development. This test concluded that uranium can be mined with the ISR method at the deposit and was an important stage in the transition from exploration to mining project development.


Groundwater and aquifers in the Zuuvch Ovoo area

Advanced exploration began in 2011 for Zuuvch Ovoo. This involves detailed delineation of the mineralization in order to measure the quantity, grade, and geology of the uranium ore bodies, as well as undertaking hydro-geological studies and examining the geological environment.

Water is a vital natural resource. Understanding where it is and how it moves under the ground is essential in protecting it. By using geological maps and taking samples of underground and surface water for analysis, hydrogeologists are building a detailed picture of how water flows underground.

Supervision and environmental monitoring

During the tests performed at the Dulaan Uul site, monitoring wells were positioned at the upper and lower levels of the groundwater layer and inside and outside the uranium mining cells, in order to monitor the hydrodynamics and quality of the groundwater. The results showed that uranium could be recovered with very limited impact on the environment.

All the environmental impact results of the ISR test were sent to the relevant Mongolian administrative bodies, along with its post-test environmental impact assessment.




  • Groundwater & Aquifers in the Zuuvch Ovoo area
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Zuuvch Ovoo pilot test

The pilot test will extract uranium from the deposit using two cells. This uranium will then be processed on site at the mini-processing facility, where it is separated from the solution, purified, dried and formed into the saleable product.

It is then packed as in a conventional processing plant and exported for further processing to the dedicated facilities.

The test will last 200 and 300 days alternately on each cell and will cover all the stages of uranium mining, from extraction to production of an uranium concentrate containing 75% uranium.

After two years of pilot operations, approximately 20 tons of uranium will be produced. During the tests, analyses and monitoring will be carried out via 32 monitoring wells.


Pilot facility aerial view

Pilot facility

2-cell
wellfield
2,208 m2
covered by the wellfield

150-200 m
drilling depth
10 m
mineralization

32
controlling wells or piezometers
20tU
to be produced


The objectives of the pilot test

During the development phase, the technical, economic and environmental feasibility of a mining project is established. This involves confirming the resources identified by the geologists and characterizing the deposit and its ore.

A pilot installation is also set up during this phase to determine the mining and ore processing methods best suited to the deposit. The performance of on-site testing is part of the legal requirement in Mongolia to register the geological exploration reserves.

  • The Pilot test results will provide information for the feasibility study and confirm technical and economic parameters.
  • The test will provide data to confirm the expected low environmental impact of the ISR mining method chosen to operate the mine.

Controlling and monitoring

The test parameters will be regularly checked automatically by computer, which will also perform hydraulic and chemical analyses. Uranium, iron, acid concentration, pH, salinity and other characteristics will be analyzed daily on site in a laboratory set up specifically to monitor the process.

32 monitoring wells or piezometers are installed both around and inside the well field areas and above and below the deposit to measure the hydrodynamics and quality of the groundwater.

A systematic water sampling program is conducted before, during and after the test to assess any impact the process may have had on the environment and particularly on groundwater quality.


Another objective of the pilot test is to involve the local communities in the monitoring of the tests, thus contributing to the societal and environmental acceptance of the project.

The Zuuvch Ovoo project brings local employment and skills development


96%
of Badrakh Energy’ employees are from Mongolia

30%
of Badrakh Energy’ employees are locally hired

50
is the total number of employees working on the pilot test

Economic Benefits from the Project

  • The Badrakh Energy mining project is a large investment project for Mongolia.
  • The project’s governance structure does not require recourse to sovereign financing.
  • More than 1 bn USD in tax income over the life of the project at national and local level.
  • Generation of significant purchase and business opportunities in Mongolia at national and local level.
  • Participation in the development of local infrastructure.
  • 1,000 + direct jobs once the mining starts, with the development of a highly skilled workforce & numerous training programs.


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