Currently active on an interesting uranium project in Hungary, WildHorse Energy (WHE) notes that “with rising concern about global warming and the need to reduce CO2 emissions, many countries in the European Union (EU) are considering introducing nuclear power to their energy mix, or increasing its share of their energy sources. Security of supply is a major issue in the EU, and WHE’s Pécs project offers a potentially large scale ‘local’ uranium source for Hungary and the EU as a whole.”

Major developments in Europe include:

• In Finland, construction is now under way on a fifth, very large reactor which will come on line in 2011
• France is building a similar 1,600 MWe unit at Flamanville, for operation from 2012
• Romania’s second power reactor started up in 2007, and two further units are expected to commence construction soon
• Bulgaria is about to start building two 1,000 MWe Russian reactors at Belene
• Poland is planning some nuclear power capacity but initially is likely to join a joint project in Lithuania, with Estonia and Latvia
• In Switzerland, the capacity of its five reactors has been increased by over 12%
• Spain has a program to add 810 MWe (11%) to its nuclear capacity through upgrading its nine reactors by up to 13%
• Sweden is uprating the Forsmark plant by 13% (410 MWe) over 2008-10 and Oskarshamn-3 by 21% to 1,450 MWe
• The UK is moving towards a decision on an extensive nuclear power plant construction program.

The EU’s Energy Policy has binding targets to accelerate its shift to low carbon energy, and with 32% of Europe’s electricity supplied by nuclear reactors, it is currently the largest source of low carbon electricity in the EU. With over 150 nuclear reactors, EU nations account for ~33% of global uranium demand. But, the EU countries only produce 2% of their uranium requirements with the remainder imported from a range of countries including a significant portion from Russia, Kazakhstan and Uzbekistan.

According to Euratom, “the implementation of a true diversification policy remains vital for the long term security of supply of the EU eletro-nuclear industry”.

WHE continues: “Hungary, where Government support for nuclear energy is strong, has four nuclear reactors generating more than a third of its electricity. Its first commercial nuclear power reactor began operating in 1982. It has four reactors with over 1,800 MWe of capacity. The original design lifetime was for 30 years, but in November 2005 Parliament endorsed plans to extend the Paks 1-4’s lifetime by 20 years, to 2032-37. With the need to build about 6,000 MWe of new generating capacity by 2030, a new nuclear plant is again under consideration, and two 1,000 MWe units for the Paks site are proposed.

WHE has continued to evaluate the potential for an underground mining operation at its 100% owned Pécs project, in the Mecsek region of southern Hungary. In studies recently completed, WildHorse has:

• Undertaken a review of underground mining options and completed preliminary capital estimates, with a particular focus on the environmental issues of different options
• Confirmed its exploration target of 60-80 Mlb with a grade range of between 0.08-0.12% U3O8, of which 30 Mlb is already JORC compliant.

The Company’s next steps include: completion of licensing of drilling program to add to its existing JORC inferred resources; more detailed review of underground mining options; and review of development options. Managing Director, Richard Pearce: “Pécs is an important project – with its large scale resource potential it continues to warrant investment to increase JORC resources, and evaluate the feasibility of mining. The demand for nuclear energy in Europe continues to gain momentum and Pécs, as one of the largest undeveloped projects in this region, has the potential to play a strategic role in EU uranium supply”.

A Preliminary Scoping Study by Mine and Quarry Engineering Services Inc (MQes) evaluated the feasibility and capital requirements of two mining methods; drift and fill and inclined room and pillar. In both cases, production of 1.2 Mt/y of ore was evaluated using a single shaft, with 3,500 t/d processed. One of the key criteria was to limit the environmental impact on the surrounding area including the town of Pécs, by minimising surface infrastructure and activities.

Capital requirements were estimated within a range of between $380 and $430 million, based on the exploration target noted below. This preliminary study identified additional mining and processing options including the use of a decline, and these will be reviewed in work to be undertaken in 2008. Operating costs estimates will be evaluated as part of this work.

Additional work to evaluate historical information in the Mecsek region has established an exploration target of 60-80 Mlb with a grade range of between 0.08-0.12% U3O8. The target is based on the large amount of historical data, including drill logs and disequilibrium studies, which WHE has access to. This data indicates that uranium is contained in uraninite, coffinite, and pitchblend with mineralisation ranging between 0.03-3% U, with an average of 0.11-0.12% at a depth of over 500 m. The size and grade of the exploration target is conceptual in nature.

Although the Pécs Project is located adjacent to the former Mecsek uranium mine, which operated for over 40 years producing 46 Mlb of uranium, it is at an early stage of development. The work completed provides WHE with the confidence to make further investments in this promising region. It gives the company the basis for more detailed discussions with local government and communities about how a project might be developed. WHE recognises that to be able to mine successfully in the future, it needs to meet all environmental and community standards in Hungary and the EU, and all other relevant legislation, and this will be a focus of further studies planned for 2008.

The drilling program is licensing ~40 drill sites. Stage 1 drilling will be 10-15 holes for over 8,000 m expected mid-2008 once permitting completed. The objective is to significantly increase existing JORC resources. The Pécs project is a large scale opportunity that will require significant capital investment. As well as the geological and mining studies planned, the company will continue to review opportunities for consolidation of historical mining areas and the potential development options for a project of this scale.