Toolebuc Joint Venture with Exco Resources

Paradigm and Exco Resources (PDM-EXS) entered into a 50:50 joint venture in February 2008 to carry out a multi-commodity exploration program on jointly owned tenements 50km east of Cloncurry. Paradigm is managing the joint venture. Commodities being sought include uranium, vanadium, molybdenum and oil shale.  The size of the joint tenement package is approximately 500 km2 (see Figure 2.1)

The Toolebuc Formation, the principal target rock unit, is a flat-lying carbonate oil shale up to 30m thick within the Mesozoic Eromanga Basin.

Oil Shale

Oil shales contain kerogens which require cracking at elevated temperature to separate the oil and gas. New technologies are being considered around the world as potentially economically viable and environmentally sustainable alternatives to the old environmentally unfriendly technologies used in the past. Companies such as Shell and Schlumberger are investigating new technologies to exploit the oil shale using in situ mining methods. Oil shales have enormous potential to become an important source for world energy in the future.

Large near-surface oil shale deposits were found in Toolebuc Formation rocks during the 1970s and early 1980s including inside the PDM-EXS joint venture area. The oil content was too low to be considered economic using retorting technologies of that time. Grades were estimated to be between 40-60l/t (0.25-0.35 barrels/t).

The Toolebuc Joint Venture is reassessing the thickness and grade of the oil shale deposits, as well as reviewing some of the new potential exploitation technologies available.  Based on more than 100 holes drilled by past explorers, and approximately 35 holes drilled by the joint venture, potential exists for some 100 km2 of primary oil shale approximately 15m thick beneath 15-30m of cover. The grades of the deposits are being reassessed using modern assaying techniques, and will be reported on when results become available. 

Approximately 200 km2 of the tenement region is partially eroded and contains weathered oil shales (all oil is leached out to the base of weathering at about 15m). These oxidised rocks are prospective for vanadium and molybdenum, and significant widths of V-Mo mineralisation have been encountered by joint venture drilling (see section below).

Current exploration

Recent drilling has found significant V-Mo intersections at the Arrolla prospect (see ASX announcement 16 Sep 2008). Vanadium grades at Arrolla are about 0.4%V2O5 and 400ppm MoO3 over 4-5 metre intersections close to surface. It remains to be proven that V-Mo can be economically extracted from the clay and carbonate rich Toolebuc Formation rocks. However the mineralisation footprint area covers a large area possibly 25-50 sq km. The joint venture is reviewing V-Mo leach technologies currently available. 

Figure 2.1 Paradigm-Exco exploration permits at the Cloncurry project with relevant drill hole locations

Uranium - molybdenum - vanadium in Toolebuc Limestone

Low-grade uranium mineralisation was found in the reduced oil shale sequence during the June 2008 quarter. Best drill intercepts include 9m @ 80ppm U3O8 from 11m in TAC007, and 4m @ 110ppm U3O8 from 14m in TAC009.

Whist these results are too low-grade to be economic, we consider the reduced deeper portions of the Toolebuc Formation has significant uranium potential if higher uranium grades can be found. It should be noted that most pre-existing uranium exploration has been carried out within oxidised weathered rocks, where uranium may have been leached.

A large area of approximately 200 km2 is prospective for vanadium and molybdenum in oil shales that have been leached of the primary oil component to a depth of about 15m. Both minerals are used in the steel industry as hardeners.

Of the 97 holes drilled by the joint venture into oxidised Toolebuc Formation oil shale to date, 75% of the holes intersected significant vanadium-molybdenum mineralisation. Typical assay results included:
12m @ 0.33% V2O5 and 342ppm MoO3 from 0m in TAC067;
16m @ 0.30% V2O5 and 273ppm MoO3 from 4m in TAC092;
16m @ 0.25% V2O5 and 296ppm MoO3 from 4m in TAC051.

Figure 2.2 Uranium results from aircore holes drilled by the PDM-EXS joint venture in February 2008.

Figure 2.3 Cross section of vanadium and molybdenum results at the Arrolla prospect