The Felder Uranium Project _ Renewed Operations

Exxon owns a uranium mill and holds two mining leases in Live Oak County, Texas, about halfway between San Antonio and Corpus Christi. The properties make up the Felder Uranium Operations which was reopened earlier this year. Exxon held an oil, gas, and other minerals lease on the J. C. Felder tract, which was adjacent to a relatively shallow uranium discovery by Susquehanna-Western, Inc. on the Marrs-McLean lease immediately south of the Felder property. Drilling in 1967 and 1968 confirmed the presence of reduced uranium mineralization in the basal sand unit of the Oakville formation on the Felder tract, which formed the major part of the roll-front deposit. In 1969 Exxon and Susquehanna-Western, Inc. entered into a sale and purchase agreement which provided for Susquehanna to mine and process Felder ore and purchase recovered uranium. Susquehanna moved an alkaline-leach mill from Wyoming, erected it on the Ray Point property, and placed it into operation late in 1970. Susquehanna mined and processed ore from the Felder and McLean properties through March 1973. Susquehanna ceased operations in March 1973. Exxon then acquired the mill and mill property. Exxon also purchased the mineral rights to the McLean lease, re-negotiated a mining lease for that property, and carried out shut-down programs for the mining and mill areas in the fall of 1973. The project was put on a standby basis until late 1973, when Exxon initiated mine feasibility studies for the project. MINE PLANNING EVALUATION The feasibility study for reopening the Felder Project began in late 1975 and was not completed until late 1976. I will discuss several areas of the feasibility study that required additional work prior to making the decision to renew operations. Ore Reserves Preparations for estimating the ore reserves began with the re-evaluation of more than 1500 natural radioactivity logs from exploration and pre-development drilling that had been completed on the property. These gamma ray logs of non-core rotary drill holes were the principal source of data used in making the estimate. Chemical assays of cores from the deposit were also used in the reserve determination. Electric resistivity and self-potential logs were made along with the gamma ray log. In December 1975 an additional core drilling project was undertaken to confirm the in-place density and radiometric equilibrium characteristics of the ore deposits. Comparison of chemical assays of cores with the U308 values calculated from the logs showed that the unoxidized ores were in radiometric equilibrium. In contrast, cores from anomalies occurring in near surface, weathered, and oxidized zones were in radiometric disequilibrium. Several important decisions were made in developing a mine plan or schedule of production from the Felder and McLean ore bodies. Disposal of Produced Mine Water: The ore bodies of the Felder Uranium Project occur at a point below the ground water table. The ore zones to be mined must first be dewatered to allow removal of mineralized material. In the open pit operations, this is accomplished by maintaining a perimeter ditch around the periphery of the open pit, allowing the interior of the pit to drain and collect into a sump and be pumped from the mine. In addition to anticipated water production from future mining operations, approximately 200M gallons of water was contained in three open pits left from prior mining operations. In two of these existing pits, the water was to be removed and disposed to allow for planned backfilling of waste material into these pits. The third pit would also have to be drained to allow continued mining of an area left from the prior operations. Essentially no ground water information was available for this area. The only data available was water production history from Susquehanna's mining operation. Two water wells were drilled early in 1976 on the Felder lease for use in obtaining hydrological data. A long term draw-down test was performed by pumping one water well and measuring water level drawdown in both the pumped well and the observation well. From these data, values for permeability and storage coefficient were calculated. These data were then used in modeling the aquifer to allow calculation of water influx into the mining area versus time. Once a schedule of water production, including the stored volume in the existing pits was calculated, alternate solutions for disposal were evaluated. The first system evaluated was a series of deep injection wells. The wells were designed to inject at a depth of approximately 3500 feet. Again very little information concerning reservoir characteristics of the receiving sand units was known. Using assumed values for reservoir permeability and storage coefficients, an injection well system was designed to allow for disposal of produced mine water. The biggest