Thursday 14th December 2017

Resource Clips


August, 2014

Athabasca Basin and beyond

August 30th, 2014

Uranium news from Saskatchewan and elsewhere for August 23 to 29, 2014

by Greg Klein

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Patterson Lake South’s main zone swallows neighbour as Fission’s summer progresses

Fission Uranium TSXV:FCU has once again merged Patterson Lake South’s R780E zone with a neighbour. Of seven summer holes announced August 26, one “demonstrated the continuity between the shallow depth, high-grade R780E to the west and the R1155E zone to the east,” the company stated. That extends the zone’s strike by 75 metres to 930 metres. “All seven holes returned wide mineralization,” Fission added.

The project now has four zones along a 2.24-kilometre potential strike that remains open to the east and west.

These results come from a handheld scintillometer that measures drill core radiation in counts per second. The readings are no substitute for assays, which are still to come.

In addition to the easterly expansion, R780E’s high-grade mineralization has extended 15 metres west, prompting plans for further drilling there in an attempt to upgrade the area.

Among other highlights, one hole revealed a total of 103 metres (not true width) of mineralization over a 146-metre section, starting at a downhole depth of 57.5 metres. Another gave up a composite 49.5 metres starting at 63 metres in depth.

The week before Fission had announced a widening of R780E. As a result the company added 10 more step-out holes to a summer program that has focused on delineation drilling for a December resource. Additionally, an exploration hole released another week earlier found mineralization 17 kilometres from the discovery area.

While radiometric results continue to come from summer drilling, the company still has assays pending for 12 of last winter’s 92 holes.

NexGen hole-in-progress tests depth of Rook 1 high-grade mineralization

Uranium news from Saskatchewan and elsewhere for August 23 to 29, 2014

Uranium-bearing massive pitchblende from hole AR-14-30, which set a project record for composite “off-scale” mineralization at NexGen’s Rook 1.

Vying for attention with Fission, next-door neighbour NexGen Energy TSXV:NXE proclaimed “a landmark drill hole” from its Rook 1 project on August 26. AR-14-30 revealed a composite 186.9 metres of mineralization (not true thickness) within a 287.7-metre section starting at 298.3 metres in vertical depth. The hole was still in progress.

As is the case for Fission’s latest batch, these scintillometer results don’t substitute for assays, which will follow.

The Arrow zone’s first vertical hole, AR-14-30 tests the depth of high grades reported for AR-14-15, an angled hole collared roughly 225 metres away. So far AR-14-30 has set a Rook 1 record for composite “off-scale” mineralization (above 9,999 cps) totalling 53.85 metres.

The previous week NexGen reported radiometric results for step-out drilling that extended Arrow’s width by 35 metres. The zone’s now 215 metres wide and 515 metres in strike, remaining open in all directions.

Lakeland Resources expands Newnham Lake property to revisit historic work

On the Basin’s northeastern rim, Lakeland Resources TSXV:LK has expanded its Newnham Lake property to about 24,500 hectares, bringing into one package an area that’s seen extensive previous exploration—but work that predated current knowledge of the region’s deeper basement-style mineralization.

Announced August 27, the property now includes “the entire folded and faulted, graphitic meta-pelite trend which was the subject of the historic work,” the company stated. Over 140 drill holes tested the trend by 1984, focusing on the unconformity separating the sandstone from the basement rock below. But most holes stopped less than 25 metres past the unconformity.

More recent Basin discoveries have shown rich mineralization deeper into the basement. Last March Denison Mines TSX:DML heralded its Wheeler River project’s newly found Gryphon zone, with high-grade mineralization about 200 metres beneath the sub-Athabasca unconformity. This summer’s standout assay graded 21.2% U3O8 over 4.5 metres.

Nevertheless historic work at Newnham did show promise. Immediately below the unconformity, a 20-centimetre interval revealed 0.2% U3O8, along with high nickel, arsenic and lead values. Another hole found a 20-centimetre interval of 0.13% in the basement, while a third showed 0.038% over one metre directly above the unconformity.

Between 1997 and 2011, the property underwent ground and airborne geophysics, including an electromagnetic survey that identified drill targets yet to be tested. That recent work was conducted by JNR Resources when Rick Kusmirski served as president/CEO. Now he’s a Lakeland director and, as corporate communications manager Roger Leschuk says, “He sees unfinished business there.”

Adding to a busy summer of news, Lakeland announced plans the previous week for its Star, Lazy Edward Bay and Fond du Lac projects, as well as the appointment of uranium veteran Steven Khan to the board of directors.

Read more about Lakeland Resources.

Northern Uranium drills NW Manitoba

Drilling has begun on Northern Uranium’s (TSXV:UNO) Northwest Manitoba project, the company announced August 27. Some 39 high-priority land targets, and seven high-priority and five not-so-high-priority lake targets were selected following geophysics, “exceptionally anomalous radon results” and prospecting that found boulders grading up to 66% U3O8. The company, formerly MPVC Inc, holds an 80% option on the property from CanAlaska Uranium TSXV:CVV.

The Wollaston area has also attracted attention from Kivalliq Energy TSXV:KIV, Roughrider Exploration TSXV:REL and Athabasca Nuclear TSXV:ASC.

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August 29th, 2014

Off the rails: How the U.S. fracking boom is disrupting traditional logistics networks Industrial Minerals
Zinc and nickel poised to move dramatically higher in 2015 Stockhouse
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Picking mining stocks in a bear market VantageWire
Silver manipulation—the “MOAMOPE” GoldSeek
Exploration in the Tintina Gold Belt of Alaska and Yukon Geology for Investors
The consequence of America’s path Equedia

Paradox and promise

August 28th, 2014

Paladin’s John Borshoff still predicts an approaching end to uranium’s persistent predicament

by Greg Klein

Paladin’s John Borshoff still predicts an early end to uranium’s persistent slump

Paladin has increased its forecasted supply-demand shortfall by 13% over the estimate made a year ago.
(Graph: Paladin Energy)

 

“Another bleak year,” as Paladin Energy TSX:PDN managing director/CEO John Borshoff put it. But far from dampening his usual predictions of sharp price increases, the slump reinforced his views—price hikes will come soon, he maintains. The forecast “broadly aligns with Cameco’s findings, and where we differ is in the timing of recovery. We say six to 12 months. They say 12 to 18 months. Not much difference, really.”

His prognosis, sometimes expressed as a wake-up call to utilities, came as Borshoff outlined his company’s fiscal 2014 in a conference call from Western Australia broadcast during the Western Hemisphere’s August 28. Paladin had indeed undergone a bleak year.

With all dollar amounts in U.S. currency, revenue sunk to $328.8 million, a 19% decline. Not including impairments, gross loss from operations came to $3.4 million. After-tax impairments hit $296.3 million.

Production reached 7.94 million pounds U3O8, near the year’s maximum guidance but one that was lowered from an original goal of 8.3 million to 8.7 million pounds. Next year’s guidance drops to the range of 5.4 million to 5.8 million pounds, to come entirely from Paladin’s Langer Heinrich mine in Namibia. The company suspended operations at its Kayelekera mine in Malawi last May, throwing over 700 employees and contractors out of work.

Paladin’s John Borshoff still predicts an early end to uranium’s persistent slump

Paladin refinanced its Langer Heinrich mine
by selling a 25% stake to a Chinese utility.

Paladin’s stake in Langer Heinrich has been reduced to 75% following its joint venture with China National Nuclear Corp.

But Borshoff suggested uranium might have already experienced signs of recovery. This month’s price bump, from a 52-week low of $28 up to $32.50 on August 28, “has been explained away due to political issues and the possible strike.”

Strike notice did prompt Cameco Corp TSX:CCO to shut down McArthur River, the world’s largest uranium producer, on August 27. That seemed to explain why uranium’s already-rising price grew 3.2% the following day, the biggest gain since November 2011 according to Bloomberg data reported by the Globe and Mail.

“Though this may be the case, I believe there are other underlying influences at play suggesting some supply fragility even at this stage,” said Borshoff.

Longer-term fundamentals remain strong, he insisted. “China recently gave us a glimpse of its nuclear electrification targets, going from 60 gigawatts by 2020, to 150 to 200 by 2030, and then rising significantly. These are staggering numbers by any score coming from just one country and an enormous amount of uranium is going to be required to feed that expansion alone, never mind for the Middle East, India and other growing nuclear economies.”

Japan has given preliminary approval for two reactors, which could start operation by winter and begin “what is expected to be a measured reactor restart program.” As many as two-thirds of the country’s fleet could resume commercial operation over the next few years, he suggested. “Elsewhere, 72 reactors are under construction today.”

But “on the flip side of this demand optimism, producers’ response to severely depressed prices has been predictable.” Kayelekera’s on care and maintenance, as is Uranium One’s Honeymoon mine in South Australia. Rio Tinto NYE:RIO has slashed production at its majority-held Rossing mine in Namibia.

U.S. operations “are on partial production only to deliver to the few term contracts they hold,” Borshoff said. “With only half the current production able to operate at some profit under the current spot price, it’s clear no one will invest in replacing existing capacity as it runs down, never mind investing in growth of supply.”

Paladin estimates that last year almost 11 million pounds “have either been cut from annual production or deflected into term markets. We expect the impact of this to be felt strongly by the spot market in the next 12 months.”

Meanwhile, longer-term contracting of uranium sales remains behind schedule, especially in the U.S. Paladin’s figures indicate the historic contracted average reached over 150 million pounds a year. But 2013 contracts for future delivery plunged to 20 million pounds. This year has seen improvement, with mid-2014 term volume up to 60 million pounds.

“The U.S. utilities now need to act fast to fill their term contract needs for their 2016-to-2021 period. This is normally done 18 to 24 months beforehand, meaning the price reacts well before a period of actual shortage and in this current situation we would expect a positive price reaction in the next six to 12 months.”

As it is, few utilities have contracts beyond 2018, Borshoff added. “Few producers are participating in the term market because they’re reluctant to participate below price of replacement and create severe legacy contracts going forward.”

Since its last annual study, Paladin has increased its forecasted supply-demand shortfall by 13%. The company predicts the supply gap widening in 2016, leading to a significant supply shortfall for 2020 and beyond.

“The true supply-demand situation is obscured by the current short-term market oversupply. The paradox is, the low uranium price that this current situation has created is resulting in a total lack of incentive to initiate supply growth for the 2017-to-2025 period. This is a highly volatile state of affairs.”

“There is simply no opportunity to increase supply beyond what is currently being constructed,” which he limited to Cameco’s delay-prone Cigar Lake and the Chinese-owned Husab mine in Namibia, which might also suffer setbacks. “So the price not only has to move to support current supply, but also to support the mid-term lack of sufficient supply, a true paradox.”

By 2020, Paladin’s research points to a shortfall of about 35 million pounds per year, creating a cumulative shortfall of about 190 million pounds. “And on this basis we expect the start of positive price reaction occurring in late 2014, early 2015, just to incentivize the much-needed supply growth,” Borshoff said. “Every miner wants $65 to $75 “to start to think about the large amount of capital needed to build new greenfield uranium mines.”

“Am I missing something here, or does someone think serious mining companies or developers are going to invest just to lock in long-term financial losses? I think not.”

Paladin’s executive general manager of production Mark Chalmers told the conference the company’s Manyingee project in Western Australia might begin in-situ recovery operations in 2018. A more significant potential producer, the Michelin deposit in Labrador could come online in 2020 or 2021. Both projects depend on uranium prices, he emphasized.

August 28th, 2014

Keith Phillips: M&A prey offer compelling buying opportunities Streetwise Reports
Imperial Metals agrees to first nations review of Red Chris gold-copper mine
Stockhouse
Picking mining stocks in a bear market VantageWire
Silver manipulation—the “MOAMOPE” GoldSeek
Exploration in the Tintina Gold Belt of Alaska and Yukon Geology for Investors
Graphite report sheds light on importance of flake size in ASX plays Industrial Minerals
The consequence of America’s path Equedia

Lakeland Resources expands Newnham Lake property to take care of “unfinished business”

August 27th, 2014

by Greg Klein | August 27, 2014

Lakeland Resources expands Newnham Lake property to take care of unfinished business

A map shows anomalous uranium in lake sediment, conductive trends,
previous drilling and proximity to two other Lakeland projects.

 

The relatively recent understanding of some Athabasca Basin uranium deposits sheds new light on historic projects. With that in mind, Lakeland Resources TSXV:LK has expanded its Newnham Lake property to about 24,500 hectares, bringing into one package an area that’s seen extensive previous exploration—but work that predated current knowledge of the region’s deeper basement-style mineralization.

Announced August 27, the northeastern Basin property now includes “the entire folded and faulted, graphitic meta-pelite trend which was the subject of the historic work,” Lakeland stated. Over 140 drill holes tested the trend by 1984, focusing on the unconformity separating the sandstone from the basement rocks below. But most holes stopped less than 25 metres past the unconformity.

More recent discoveries have shown rich mineralization deeper into the basement. Last March Denison Mines TSX:DML heralded its Wheeler River project’s newly found Gryphon zone, with high-grade mineralization about 200 metres beneath the sub-Athabasca unconformity. This summer’s standout assay graded 21.2% U3O8 over 4.5 metres.

Nevertheless historic work at Newnham did show promise. Immediately below the unconformity, a 20-centimetre interval revealed 0.2% U3O8, along with high nickel, arsenic and lead values. Another hole found a 20-centimetre interval of 0.13% in the basement, while a third showed 0.038% over one metre directly above the unconformity.

Between 1997 and 2011, the property underwent ground and airborne geophysics, including an electromagnetic survey that identified drill targets yet to be tested. That recent work was conducted by JNR Resources when Rick Kusmirski served as president/CEO. Now he’s a Lakeland director and, as corporate communications manager Roger Leschuk says, “He sees unfinished business there.”

Newnham’s expansion comes through two separate deals. An option on three claims costs Lakeland up to $50,000 and one million shares, as well as a 1% gross overriding royalty, of which the company may buy half for $1 million. Spending commitments come up to $1.5 million over five years.

A purchase agreement on another portion of the expansion costs up to $50,000 and 750,000 shares, as well as a 3% GORR, of which Lakeland may buy a third for $1 million. As for the spending commitment, it comes to $1 million over five years, with a first-year requirement of $50,000.

Adding to a busy summer of news, Lakeland announced plans last week for its Star, Lazy Edward Bay and Fond du Lac projects, as well as the appointment of uranium veteran Steven Khan to the board of directors.

Read more about Lakeland Resources.

See a roundup of last week’s uranium news.

Disclaimer: Lakeland Resources Inc is a client of OnPage Media Corp, the publisher of ResourceClips.com. The principals of OnPage Media may hold shares in Lakeland Resources.

August 27th, 2014

Keith Phillips: M&A prey offer compelling buying opportunities Streetwise Reports
Imperial Metals agrees to first nations review of Red Chris gold-copper mine
Stockhouse
Picking mining stocks in a bear market VantageWire
Silver manipulation—the “MOAMOPE” GoldSeek
Exploration in the Tintina Gold Belt of Alaska and Yukon Geology for Investors
Graphite report sheds light on importance of flake size in ASX plays Industrial Minerals
The consequence of America’s path Equedia

Fission Uranium further extends Patterson Lake South’s main zone

August 26th, 2014

This story has been moved here.

August 26th, 2014

Picking mining stocks in a bear market VantageWire
Michael Fowler: Juniors and midtiers poised for M&A-fueled breakout once gold recovers Streetwise Reports
Silver manipulation—the “MOAMOPE” GoldSeek
Canadian billionaire digs deep to bail out Imperial Metals Stockhouse
Exploration in the Tintina Gold Belt of Alaska and Yukon Geology for Investors
Graphite report sheds light on importance of flake size in ASX plays Industrial Minerals
The consequence of America’s path Equedia

August 25th, 2014

Silver manipulation—the “MOAMOPE” GoldSeek
Canadian billionaire digs deep to bail out Imperial Metals Stockhouse
Exploration in the Tintina Gold Belt of Alaska and Yukon Geology for Investors
Bjorn Paffrath: In the end, performance matters Streetwise Reports
Graphite report sheds light on importance of flake size in ASX plays Industrial Minerals
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The consequence of America’s path Equedia

Athabasca Basin and beyond

August 23rd, 2014

Uranium news from Saskatchewan and elsewhere for August 9 to 22, 2014

by Greg Klein

Next Page 1 | 2

Fission widens main zone, plans more step-outs, arranges $12.5-million bought deal

Although infill drilling has been the priority for Fission Uranium’s (TSXV:FCU) summer program, two step-outs have widened Patterson Lake South’s R780E zone, inspiring a 10-hole addition to the campaign. Radiometric results for nine holes released August 18 include one that extended the zone about 30 metres north and another 15 metres south. All nine holes returned wide mineralization, the company stated.

Uranium news from Saskatchewan and elsewhere for August 9 to 22, 2014

R780E is the middle and largest of five zones along a 2.24-kilometre potential strike that’s open to the east and west.

These results, which are no substitute for assays, come from a handheld scintillometer that measures drill core for radiation in counts per second. Last month Fission replaced its old model, which maxed out at 9,999 cps, with a new-fangled gadget capable of measuring up to 65,535 cps. But the company still refers to anything above four nines to be “off-scale.”

By that standard several intervals were well off-scale, with a few reaching past 60,000 cps.

Another innovation introduced last month is barge-based angled drilling, allowing a better understanding of the geometry of mineralization beneath the lake. Encouraged by the widening of R780E, Fission plans another 10 step-outs. That adds 4,700 metres to a summer agenda now expected to total 25,000 metres in 73 holes.

There seems to be little worry about paying for all that. On August 18 Fission announced a $12.52-million bought deal that’s expected to close around September 23. Roughly three months later comes the maiden resource’s due date.

Winter assays reported August 13 further boosted confidence in R780E, while a summer exploration hole released two days earlier showed interesting radiometric results 17 kilometres away. Read more.

NexGen steps out to widen Rook 1’s Arrow zone

If any company can compete with Fission’s top spot as the Athabasca Basin’s number one newsmaker, it might be next-door neighbour NexGen Energy TSXV:NXE. Four “aggressive” step-out holes have extended the company’s Rook 1 Arrow zone from 180 metres to 215 metres in width for a zone that’s 515 metres in strike and open in all directions. The northwest-southeast fence of drilling announced August 20 has also revealed “multiple sub-vertical stacked mineralized shear zones” increasing the company’s hopes of finding additional high-grade areas.

One of the five holes failed to find significant mineralization.

Like Fission’s August 18 news, the results come from scintillometer readings that don’t substitute for assays, which are pending.

So far 25 of 27 Arrow holes totalling 15,318 metres have shown mineralization. Another three holes at Area A, however, failed to find anomalous radioactivity. They tested an electromagnetic conductor that NexGen interprets to be PL-3B, which hosts the PLS discovery.

Lakeland Resources updates three projects, appoints uranium veteran to board

As a busy summer progresses, Lakeland Resources TSXV:LK reported a new addition to its board and further work on one of the largest portfolios in and around the Basin. On August 20 the company announced the appointment of director Steven Khan, a veteran of Canadian investment and corporate governance with specific experience in raising funds and forging joint ventures for uranium companies. The next day Lakeland released a progress update for three of its projects.

The projects are Star, Lazy Edward Bay and Fond du Lac on the northern, southern and eastern margins of the Basin respectively. “That’s the shallowest depth—the depth to the unconformity becomes more shallow as you get closer to the Basin’s margin,” explains president/CEO Jonathan Armes. “At Gibbon’s Creek our target depths are between about 80 and 120 metres below surface. We hope the others will fall into that kind of range so we’ll be drilling 150- to 200-metre holes.”

At the Star property, crews from Dahrouge Geological Consulting have just wrapped up six days of sampling and mapping. They picked up some 73 rock samples and 124 soil samples around a basement outcrop that’s shown anomalous concentrations of gold, platinum group elements and rare earth elements, as well as highly anomalous uranium. The combination suggests a strong hydrothermal system.

“Those are typical pathfinders for uranium in the Basin,” says Armes. “At Patterson Lake South they had gold grades running two or three grams. So with the first pass on our exploration program in late 2013 we had gold grades of four or five grams.”

Lakeland holds a 100% earn-in option on Star, which has year-round road access from the town of Stony Rapids a few kilometres away.

Now that permits have arrived, mobilization to Lazy Edward Bay should begin ASAP, he adds. Under initial scrutiny will be the BAY trend, actually two parallel conductive trends, which will undergo a RadonEx survey. Field crews will also search out boulders or other signs of unconformity-style mineralization.

“We have Lazy Edward drill targets already but a lot of them were defined by yesterday’s technology,” Armes explains. “We’ll use RadonEx and other work to re-interpret the historic data to better define targets.” In all, the property has six known trends.

Lakeland adviser Rick Kusmirski knows the property from his time as president/CEO of JNR Resources. “He dug up some historic data which is very helpful to identify areas to focus on. There’s some historic areas we want to re-visit.”

Also in line for RadonEx is Fond du Lac, initially targeting a coincident geochemical and conductive target. Geologist and Lakeland director Neil McCallum thinks historic work “missed it by a couple of hundred metres,” Armes says.

But while the summer activity continues, he also looks further ahead “from a treasury standpoint as well as our projects. We’re convinced that 2015 is going to see a significant move in uranium prices. If we ever re-visit 2006 and 2007 levels, when there were 50, 60, 70 juniors active, we hope to be ready and get as many drill programs going as possible through the joint venture and prospect generator model, along with any programs we focus on 100% ourselves.”

[Khan’s JV work with Sumitomo and Kepco] was certainly a great experience in negotiating and concluding contracts, and working with them on the joint management committees. That built long-term relationships but also gave me insight into the Asian psyche and some of the issues they have to deal with.—Steven Khan, director
of Lakeland Resources

Just one day before the exploration update, Lakeland announced Steven Khan’s appointment as director. His background includes key positions with uranium companies Energy Fuels TSX:EFR, Strathmore Minerals and Fission Uranium’s predecessor, Fission Energy. He helped found the latter company, holding the role of executive VP. Khan served as president/chairperson of Strathmore Minerals until last year’s takeover by Energy Fuels, where he stayed on as a director until recently.

Khan played an instrumental part in the negotiating team that brought Japan’s Sumitomo Corp into a JV on Strathmore’s Roca Honda project in New Mexico. He also helped bring the Korea Electric Power Corp into two other JVs, with Strathmore on the Gas Hills project in Wyoming and with Fission, leading to the Waterbury Lake discovery.

Khan has nearly 20 years of experience in all aspects of the Canadian investment industry, including fundraising for early-stage private and public companies.

A confluence of factors convinced him to join Lakeland, he says. “I’ve had a long-term relationship with some of the company’s principals and I’ve always been interested in returning to the Athabasca Basin arena after I left Fission Energy in 2010. Strathmore was more focused on the U.S., where I spent the last number of years. That combination of moving back to the Basin, working with a group of people I respect and seeing a number of properties that have potential presented an opportunity for me.”

He says his work with Sumitomo and Kepco “was certainly a great experience in negotiating and concluding contracts, and working with them on the joint management committees. That built long-term relationships but also gave me insight into the Asian psyche and some of the issues they have to deal with.”

Khan thinks Asian companies might revive their previous interest in early-stage explorers. “Before Fukushima they were attracted to earlier-stage projects like Fission had at the time, as well as more advanced projects like those of Strathmore in the U.S. When uranium prices come back I think they’ll be forced to return to earlier-stage projects because most of the advanced projects will have been tied up.”

As for uranium’s current price, “its resurgence has been muted and is taking longer than expected. But I think that in the medium to longer term, demand will certainly outstrip supply.”

“I’m quite excited about getting involved with the Lakeland team and I think the opportunity for the sector is attractive,” Khan emphasizes. “I think there’s going to be more Athabasca Basin discoveries and that bodes well for companies like Lakeland that are properly positioned and properly financed. So for me the timing is good and the interplay of several factors is favourable.”

Read more about Lakeland Resources.

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