Uranium news from Saskatchewan and elsewhere for August 9 to 22, 2014
by Greg Klein
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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.
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.”
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