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Posts tagged ‘Denison Mines Corp. (DML)’

Wheeler River PEA buoyant even with cautious uranium price forecast

April 4th, 2016

by Greg Klein | April 4, 2016

Two high-grade eastern Athabasca Basin uranium deposits could form a single mining operation lasting 16 years, according to the Wheeler River joint venture’s PEA. Operator Denison Mines TSX:DML released the figures April 4 from a study that incorporates the McClean Lake mill and bases its numbers on a conservative price forecast.

Wheeler River PEA buoyant even with cautious uranium price forecast

McClean Lake expansion should provide
excess capacity of six million pounds a year.

Using an 8% discount rate, the pre-tax NPV comes to $513 million with a 20.4% IRR. Each of the three partners would face a different tax scenario, Denison pointed out. The company holds a 60% stake in the JV with Cameco Corp TSX:CCO (30%) and JCU (Canada) Exploration (10%).

Initial capex would come to $560 million and sustaining capex another $543 million. Payback was reckoned at about three years.

Those numbers assume a uranium price of $44 per pound U3O8, the current long-term contract price according to Denison. (In lieu of a spot price, UEX Consulting provided a very low March 28 price indicator of $29.15.)

By comparison, Fission Uranium’s (TSX:FCU) September PEA for Patterson Lake South considered a price of $65 per pound. Cameco’s average realized price for 2015 came to $57.58, partly bolstered by the weak Canadian dollar.

But should uranium reach $62.60, Wheeler River’s PEA projects a pre-tax NPV of $1.42 billion and a 34.1% IRR.

The “conventionally mined” basement-hosted Gryphon deposit would enter production first. The unconformity-hosted Phoenix, located below water-saturated sandstone, would require Cigar Lake techniques of ground-freezing and remote-control jet-boring. The two Wheeler River deposits lie three kilometres apart on the 11,720-hectare property.

The Phoenix resource used a 0.8% cutoff to show:

  • indicated: 166,400 tonnes averaging 19.14% for 70.2 million pounds U3O8
  • inferred: 8,600 tonnes averaging 5.8% for 1.1 million pounds

Gryphon’s resource used a 0.2% cutoff:

  • inferred: 834,000 tonnes averaging 2.31% for 43 million pounds

Cutoff grades were based on an assumed price of $50 per pound. The Phoenix indicated category has the world’s highest grade of any undeveloped uranium deposit, Denison states. High-grade Gryphon assays from last winter’s drilling have yet to be incorporated into the resource.

The study sees Gryphon production beginning in 2025, turning out around 40.7 million pounds over seven years. Phoenix would follow with 64 million pounds over nine years. Milling would take place at McClean Lake, expected to have excess capacity of six million pounds a year when expansion finishes by the end of 2016. Denison holds a 22.5% share of the mill, along with AREVA Resources Canada (70%) and OURD Canada (7.5%).

“Thanks to the existing infrastructure in the eastern Athabasca Basin, our ownership interest in the McClean Lake mill, and a project designed to minimize risk and upfront capex, the Wheeler River project has the potential to emerge as one of the next producing assets in the region,” stated Denison president/CEO David Cates.

Last week the company announced an all-share deal in which GoviEx Uranium CSE:GXU would acquire all of Denison’s African assets. Expected to close next month, the transaction would leave Denison with 25% of GoviEx outstanding shares and 28% on a fully diluted basis.

Chinese uranium trader signs LOI for $82-million strategic investment with Fission

December 21st, 2015

by Greg Klein | December 21, 2015

While campaigning on behalf of the doomed merger with Denison Mines TSX:DML last July, Fission Uranium TSX:FCU chairperson/CEO Dev Randhawa defended the proposal by saying, “One of the things I run into when I go to Asia is they say I’m too small.” But on December 21 the company announced a letter of intent for an $82.22-million private placement from a Hong Kong-listed uranium trader, CGN Mining Company Ltd. Its controlling shareholder is China Uranium Development Company Ltd, a subsidiary of the energy utility China General Nuclear Power Corp. The deal would leave CGN with 19.99% of Fission.

Chinese uranium trader signs LOI for $82-million strategic investment with Fission

The $82-million deal would give a Chinese
company nearly 20% of the Triple R deposit.

Randhawa called it “the first time a Chinese company has invested directly in a Canadian uranium company.” The parties also pledged to work towards an offtake agreement.

They hope to close by January 29. Among the requirements are approvals from the TSX, CGN shareholders, the Hong Kong exchange and the Chinese government. Should either party back out or CGN fail to win approvals by February 29, a $3-million break fee takes effect.

CGN would nominate two directors to Fission’s board, which would grow from seven to nine members.

Last June the Canadian government approved Australia-headquartered Paladin Energy’s (TSX:PDN) ownership of the proposed Michelin mine in Labrador, relaxing a 1987 policy that requires at least 51% Canadian ownership of uranium mines. The policy doesn’t apply to exploration and development projects.

Fission’s Patterson Lake South project, just outside Saskatchewan’s Athabasca Basin, reached PEA in September with numbers that the company said makes its Triple R deposit potentially one of the world’s lowest-cost uranium producers. Last week the company fended off dissident shareholders to elect its management slate to the board.

Fission’s next-door neighbour hasn’t done badly in financing either. Last month NexGen Energy TSXV:NXE announced a $20-million bought deal, which followed a $23.74-million private placement that closed in May. The Arrow zone of the company’s Rook 1 project has its maiden resource scheduled for H1 2016.

Update 2: Fission Uranium fights off dissidents as management’s slate elected

December 15th, 2015

by Greg Klein | December 15, 2015

Fission Uranium TSX:FCU bosses won their latest skirmish with dissatisfied investors as incumbent directors and the management’s one new nominee were elected to the board. Voters representing 51.16% of eligible shares, constituting “record shareholder turnout,” sided with the status quo, Fission announced December 15. The company reported percentages for the seven directors that ranged from a low of 80.37% for chairperson/CEO Dev Randhawa to 89.13% for Ross McElroy, Fission’s president, COO and head geologist.

The company reported a total of 197,855,736 shares voted at the meeting, but the board election drew about 167.7 million votes, media rep David Matthews informed ResourceClips.com.

Fission fights off dissidents as management’s slate elected

Dev Randhawa argues for the Denison merger at an October meeting. The proposal got majority support but fewer than the two-thirds
vote required from Fission shareholders.

“Notwithstanding a withhold campaign launched by a small group of dissident shareholders to withhold votes from the entire board, we have received overwhelming and conclusive support from our shareholders that says we are on the right track and have the plan needed to ensure that PLS and its Triple R deposit reach its full potential,” Randhawa maintained. “We hope that once and for all this puts an end to their costly and distractive campaign against the company.”

Initially triggered by opposition to Fission’s proposed merger with Denison Mines TSX:DML, a group called FCU Oversight presented its own candidates in November. The group withdrew its slate early this month, saying it wasn’t until after leader Jim Gifford submitted his list, “as required by Fission’s last-minute adoption of an advanced notice policy,” that the company revealed change-of-control payouts could put shareholders “on the hook for millions of dollars.” Executive pay was one of the dissidents’ concerns. The group then advised shareholders to vote withhold “to force the current directors to resign.”

Fission’s slate drew support from Rick Rule of Sprott U.S. Holdings, as well as proxy advisory firms Institutional Shareholder Services and Glass, Lewis & Co.

New to the board, which numbered six prior to the election, is Raffi Babikian, whose career “encompasses just about every aspect of the uranium business including M&A activity for AREVA,” according to an earlier statement from Randhawa.

In a brief response to the election, FCU Oversight said Fission “now has the latitude and licence to conduct the business of the company as they [see] fit. We hope that they will act in the long-term interests of all Fission shareholders.”

Patterson Lake South’s still up for grabs as Fission/Denison merger fizzles

October 13th, 2015

by Greg Klein | October 13, 2015

Two renowned dealmakers have failed in their plan to merge the Athabasca Basin’s two most prominent exploration companies. On October 13 Fission Uranium TSX:FCU and Denison Mines TSX:DML announced that proxies submitted four days earlier showed majority support from both companies but fell short of the two-thirds vote required from Fission shareholders. The companies called off shareholders’ meetings scheduled for October 14.

Patterson Lake South’s still up for grabs as Fission-Denison merger fizzles

Potentially one of the world’s lowest-cost uranium mines
according to its PEA, Patterson Lake South seeks a new owner.

Fission shareholders expressed skepticism soon after the proposal was announced in early July, putting CEO Dev Randhawa on the defensive in a conference call. To drum up support, he and Denison director Lukas Lundin then spoke to shareholders at an October 6 town hall meeting in Toronto.

The deal would offer Fission “superb access to capital via the Lundin Group,” as well as a large Denison portfolio featuring its 60%-held Wheeler River project and 22.5% interest in the McClean Lake mill, Randhawa maintained. He and Lundin noted “two of the leading independent proxy advisory firms,” Institutional Shareholder Services and Glass Lewis & Co, recommended a yes vote.

A week prior to the proxies, the National Post’s Peter Koven reported strong support from Fission’s institutional shareholders but stated “the vast majority of the stock is held by retail shareholders, some of whom are loudly resisting the deal.”

A website called FCU Oversight argued that from the outset the terms severely undervalued Fission’s sole asset, Patterson Lake South, and included “no value” for the preliminary economic assessment released in early September.

FCU Oversight added that Denison’s “Athabasca projects are located on the eastern side of the basin and are not considered as robust, or as readily minable. The balance of Dennison’s [sic] international assets are simply not synergistic to Fission.” The website also questioned the appointments of Fission brass to positions with the new company.

Randhawa told Koven he foresaw no deal with giants like Cameco Corp TSX:CCO or AREVA. Fission has shown no interest in taking PLS into production itself. In fact the company was set up specifically to be sold after spinning out its other assets to Fission 3.0 TSXV:FUU to make PLS a more attractive take-out target.

Foreign suitors might be emboldened by last June’s federal government decision to allow Australian Paladin Energy’s (PDN) ownership of its proposed Michelin mine in Labrador. Canada requires at least 51% domestic ownership of uranium operations but allows exceptions when no Canadian partners materialize.

The failed merger marks the second time PLS has slipped through Denison’s fingers. The company nearly got the project in November 2012 with Denison’s takeover of Fission Uranium’s predecessor, Fission Energy. Before the deal was signed, Fission Energy’s joint venture partner Alpha Minerals struck massive pitchblende and strong radioactivity in the project’s discovery hole. Randhawa renegotiated the deal with Lundin to exclude the project. Fission Uranium bought out Alpha the following year.

Cameco and AREVA finally celebrate Cigar Lake’s official opening

September 23rd, 2015

by Greg Klein | September 23, 2015

Delays have been a matter of course for Cigar Lake throughout its 33-year history. So why not wait 18 months to announce the mine’s official opening? Cameco Corp TSX:CCO and AREVA Resources Canada did just that on September 23 as they celebrated the start of mine and mill production with speeches and tours.

Discovered in 1981, Cigar Lake began extraction in March 2014, while McClean Lake packaged the mine’s first concentrate the following October. The mill’s been processing other mine feed since 1999.

Cameco and AREVA finally celebrate Cigar Lake’s official opening

Cigar Lake began operation in March 2014 but now it’s official.

Better late than never, Cameco president/CEO Tim Gitzel exclaimed, “This achievement took 10 years, great perseverance and technical creativity, and I commend the many people who contributed.”

Figures for 2015 so far show the eastside Athabasca Basin mill processed 6.1 million pounds U3O8 from Cigar Lake ore, reaching the lower end of the year’s target of six million to eight million packaged pounds. With that target under review, Cameco promised an update in its Q3 report. Full production of 18 million pounds is expected by 2018.

The company has now commissioned three jet boring machines, high-pressure water jets that extract ore from frozen rock 410 to 450 metres underground “at the interface between dry basement rock and the water-bearing sandstone above.” But efficient operation “may halt and resume mining several times during a quarter without impacting planned annual production.”

Some 70 kilometres northeast, McClean Lake expansion continues, with construction expected to finish next year. Full capacity has been targeted at 24 million pounds uranium annually. The mill has churned out over 52 million pounds of concentrate since 1999.

Operator Cameco holds a 50.025% stake in the Cigar Lake joint venture, along with AREVA (37.1%), Idemitsu Canada Resources (7.875%) and TEPCO Resources (5%). Over 600 people work there.

AREVA’s 70% share makes it majority owner as well as operator of McClean Lake, with other JV partners being Denison Mines TSX:DML (22.5%) and OURD Canada (7.5%). This operation employs over 350 workers.

Read more about Cigar Lake.

Lakeland Resources/Alpha Exploration combination gets shareholder approval

September 15th, 2015

by Greg Klein | September 15, 2015

A new Athabasca Basin explorer named ALX Uranium Corp came closer to inception on September 15 after shareholders of Lakeland Resources TSXV:LK and Alpha Exploration TSXV:AEX voted overwhelmingly in favour of combining the two companies.

The proposal won support from 96.01% of Alpha shareholders and 97% of Alpha security holders (shareholders and warrant holders), while Lakeland shareholders voted 95.76% in favour.

I call that a merger of two juniors to strengthen the balance sheet, increase resource science capabilities and bring together experienced management teams and board members.—Thomas Drolet, quoted in Streetwise Reports

In a Streetwise Reports interview posted the same day, energy expert and Lakeland adviser Thomas Drolet called the plan “a merger of two juniors to strengthen the balance sheet, increase resource science capabilities and bring together experienced management teams and board members.” Contrasting the deal with the proposed Fission Uranium TSX:FCU/Denison Mines TSX:DML merger, Drolet said the Lakeland/Alpha combination comprises “a different kind of M&A. It is more a merger of two juniors that want to stay in the E&P extraction business, get on with drilling and strengthen their balance sheets.”

Their combined portfolio would be one of the Basin’s largest, with “a string of Tier 1 drill targets,” according to Lakeland CEO Jonathan Armes.

Should further approvals come from the TSXV and British Columbia Supreme Court, the two companies anticipate ALX Uranium will debut on September 25’s opening buzzer.

Read more about the Lakeland Resources/Alpha Exploration combination.

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.

PLS reaches PEA

September 3rd, 2015

Fission Uranium sees Triple R potentially one of the world’s lowest-cost producers

by Greg Klein

Ever since Alpha Minerals’ November 2012 discovery, other explorers have basked in Patterson Lake South’s reflected glory. Now Fission Uranium TSX:FCU has plans that could further boost its own fortunes while complementing others. A proposed new mill would create a potential “key centrepiece for the western Athabasca Basin—with the potential to process ore from other high-grade projects in the region as they are taken into production,” says president/COO Ross McElroy. That’s one of the highlights of the preliminary economic assessment announced September 3 for the Triple R deposit’s proposed open-pit/underground mine and mill.

The numbers look good, especially with average operating costs of US$14.02 per pound U3O8 over a 14-year lifespan, “making Triple R potentially one of the lowest-cost uranium producers in the world,” Fission boasted.

Fission Uranium sees Triple R potentially one of the word’s lowest-cost producers

Taking less than three years from discovery to PEA, Patterson Lake
South encouraged a busy area play around the southwestern Basin.

Those numbers, however, assume a substantial uranium price recovery to US$65 a pound and a continually weak northern peso floundering at US$0.85.

Using a 10% discount rate, the figures show a post-tax net present value of $1.02 billion (all dollar figures Canadian, except where noted) and a 34.2% post-tax internal rate of return.

The study estimates initial capital costs at $1.1 billion, with a prompt post-tax payback in 1.7 years.

The high-grade deposit would produce around 100.8 million pounds of U3O8 with 95% metallurgical recovery, bringing 77.5 million pounds in the operation’s first six years and another 24 million pounds over the following eight years. Annual production would average 7.2 million pounds over 14 years.

The study updates Triple R’s maiden resource but doesn’t include the recently expanded R600W zone to the west. The resource used a 0.2% open pit cutoff and 0.25% underground cutoff for a total of:

  • indicated: 2.01 million tonnes averaging 1.83% for 81.11 million pounds U3O8

  • inferred: 785,000 tonnes averaging 1.57% for 27.16 million pounds

The September 3 announcement doesn’t mention Triple R’s gold: 38,000 ounces indicated and 16,000 ounces inferred.

Triple R takes in two zones, the land-based R00E and the much larger R780E, lying 225 metres east under about six metres of water.

Those numbers, however, assume a substantial uranium price recovery to US$65 a pound and a continually weak northern peso floundering at US$0.85.

The PEA attributes its low opex partly to an open pit/underground design taking advantage of the big but shallow, high-grade, basement-hosted deposit. The hybrid mine would feature dykes and slurry walls for water control. “High-grade mineralization (above 4% U3O8) is captured within the open pit, eliminating the need for expensive, specialized underground mining methods.”

The design would use “proven techniques successfully implemented at a number of Canadian mining operations, including the Diavik diamond mine and the Meadowbank gold mine,” the PEA states. “The development scenario does not require any new, untested, conceptual mining or construction methods.”

In other words, it’s not another Cigar Lake. The study foresees about three years of pre-production.

The open pit would produce a total of 1.56 million tonnes averaging 2.21%, while the underground portion would come to 3.25 million tonnes averaging 0.42%. Total production would hit 4.8 million tonnes at 1%.

Of course the proposed new mill, not to mention McElroy’s buoyant remarks, will be welcomed by the region’s other explorers, most notably NexGen Energy TSXV:NXE but also including several earlier-stage projects.

The PEA announcement precedes closure of Fission’s proposed merger with Denison Mines TSX:DML, which the companies anticipate next month. Initial reaction to the merger from Fission shareholders, however, was less than enthusiastic. The deal requires their two-thirds support, as well as 50% plus one from Denison owners. Could such an encouraging PEA bolster the resistance of some Fission voters?

The suitors have mentioned that Denison’s connection with the Lundin Group brings access to mining expertise. But they’ve also left open the possibility of selling part or all of their combined portfolio. In a corporate video released prior to the PEA, CEO/chairperson Dev Randhawa said, “You do not have to be a uranium company to mine this.”

Fuelling controversy

August 7th, 2015

While Quebec ponders a uranium ban and Virginia’s is challenged, explorers prepare for Japanese restarts

by Greg Klein

The company has just launched a lawsuit challenging the state of Virginia’s ban on uranium mining, but Virginia Energy Resources TSXV:VUI has also been impacted by the Quebec moratorium. Last January the company settled a debt by transferring its interest in an idled Quebec uranium project to Anthem Resources. That company, meanwhile, has launched its own action against British Columbia’s uranium ban. Since then Anthem’s been taken over by Boss Power, winner of an out-of-court settlement resulting from the same ban. Now the former Boss and Anthem, under their new name of Eros Resources TSXV:ERC, find themselves joint venturing with Denison Mines TSX:DML in Saskatchewan’s Athabasca Basin.

Virginia Energy’s August 5 court filing claims the state’s 1982 ban on uranium mining is “pre-empted by federal law” and therefore unconstitutional.

While Quebec ponders a uranium ban and Virginia’s is challenged, explorers prepare for Japanese restarts

The suit argues that Virginia’s “refusal to develop uranium mining regulations is grounded in environmental and radiological safety concerns over the processing of uranium ore and, in particular, the long-term storage and management of uranium mill tailings. Pursuant to the federal Atomic Energy Act, the regulatory oversight and management of the uranium mill and the resulting tailings are under the clear and exclusive jurisdiction of the Nuclear Regulatory Commission.”

The company’s co-plaintiffs consist of its subsidiary Virginia Uranium Inc and two part-owners of Virginia Energy, Coles Hill LLC and Bowen Minerals LLC.

“We do not come to this point lightly,” said Virginia Uranium president/CEO Walter Coles Sr. “For almost eight years, and at great expense, we have worked in good faith with our community, our local government and the General Assembly, as well as myriad state agencies…. We had hoped that our steady progress and good faith co-operation with Commonwealth legislators and officials would continue under Governor [Terry] McAuliffe’s administration. But that was not to be.”

Within days of his November 2013 election, McAuliffe promised to veto any legislation that would end the ban. That left Virginia Energy unable to develop Coles Hill, which the company calls “the largest undeveloped uranium deposit in the U.S.A. and one of the largest in the world.”

A 2012 resource gave the project 132.93 million pounds indicated and 30.41 million pounds inferred, although at low grades of 0.056% and 0.042% eU3O8 respectively.

The U.S. relies on nuclear energy for 19% of its electricity but imports 90% of its uranium, according to World Nuclear Association figures. As for Virginia, the World Nuclear News attributes to the state “four operating reactors at two nuclear power plants, numerous nuclear companies and government nuclear-related facilities.”

Virginia Energy’s lawsuit comes as Quebec ponders whether to lift its moratorium or proclaim an outright ban on uranium activity. Last month a committee appointed by the province’s former Parti Québécois government released a negative report on uranium mining. The current Liberal government must now consider its recommendations before making a decision.

Last December, even while Quebec’s BAPE (Bureau d’audiences publiques sur l’environnement) uranium inquiry was taking place, Strateco Resources filed a nearly $190-million lawsuit against the provincial government for losses incurred during the moratorium. The company has since delisted from the TSX.

Like the rationale behind the Virginia ban, the BAPE report emphasized concern about radioactive waste, which can pose problems for thousands of years but “the most recent confinement technique recommended in Canada has been in use for only 30 years.”

That helped provoke a strong response from the Canadian Nuclear Safety Commission, which said BAPE implied Canada’s nuclear regulator and the province of Saskatchewan “have been irresponsible in their approval and oversight of the uranium mines of Canada for the last 30 years.”

The CNSC slammed BAPE for “conclusions and recommendations that lack scientific basis and rigour.”

B.C.’s 2009 ban remains solidly in place, but at considerable cost to taxpayers. In a 2011 out-of-court settlement, the province agreed to compensate Boss Power with $30.35 million. Anthem, itself a renamed version of a previous incarnation of Virginia Energy, launched its own lawsuit against B.C. last year.

Then late last month, the same day Boss closed its takeover of Anthem, the companies’ new persona of Eros Resources announced “a brand new discovery” at its Murphy Lake project, where one of four holes found 0.2% eU3O8 over 6.9 metres. Eros has a 41.06% stake in the eastern Basin project, with operator Denison holding the rest.

Operating under what the CNSC maintains is a highly effective regulatory framework covering all aspects of mining, Saskatchewan explorers continue the quest for new discoveries.

These developments take place while Japan’s on the brink of its first post-Fukushima nuclear restart.

Fission Uranium chairperson/CEO Dev Randhawa argues the case for a merger with Denison Mines

July 31st, 2015

…Read more

Allied forces

July 23rd, 2015

Lakeland Resources and Alpha Exploration plan a strategic Athabasca Basin combination

by Greg Klein

Lakeland Resources and Alpha Exploration sign merger agreement

Among the new company’s exploration priorities would be the combination of
Lakeland’s Carter Lake and Alpha’s Hook Lake, on conductive corridors
and proximal to uranium discoveries northeast of Patterson Lake South.


The news followed the Fission Uranium TSX:FCU/Denison Mines TSX:DML announcement by two weeks yet Jonathan Armes says, “I don’t think there’s a better fit in the Basin.” Revealed July 22, the proposed combination of Lakeland Resources TSXV:LK and Alpha Exploration TSXV:AEX would bring together “our treasuries, our dream team of directors and technical advisers, and of course our properties. There’s synergies especially in the Carter Lake-Hook Lake projects. We’d have 15 kilometres of virtually untested corridors on strike with the Patterson Lake South, Arrow and Spitfire uranium discoveries.”

Lakeland’s CEO sees Basin companies divided by a big gap in market capitalization, where one group of explorers struggles with caps of $3 million or less while the next group starts with $13 million or more. “We want to tighten our share structure and provide more leverage to our existing shareholders,” Armes explains. “We think that having 41 million shares and $3 million in the bank would put us in a different category from a lot of our peers right now. We could execute probably two drill programs before the Christmas break. And, given our treasuries, people and properties, we’d have the ability to raise additional funds.”

The unified portfolio would feature “a string of Tier 1 drill targets,” including a combination of Lakeland’s Carter Lake and Alpha’s Hook Lake, now held 100% each by their respective companies. Together they cover an approximately 15-kilometre length of the PLS conductive corridor hosting Fission’s Triple R deposit and R600W zone, as well as the Arrow zone of NexGen Energy TSXV:NXE and the Spitfire zone of Cameco Corp TSX:CCO, AREVA Resources Canada and Purepoint Uranium TSXV:PTU.

Lakeland Resources and Alpha Exploration plan a strategic Athabasca Basin merger

Three other priorities from Alpha’s portfolio include Kelic Lake, Carpenter Lake and Gorilla Lake. Alpha holds a 100% option on Kelic, straddling the southern Basin’s rim east of PLS. East of Kelic and just south of the rim, Alpha holds the larger part of a 60/40 joint venture with Noka Resources TSXV:NX on Carpenter. East of the former Cluff Lake mine Alpha holds 80% of Gorilla, a JV with 20% partner Logan Resources TSXV:LGR. Results are pending for geophysics flown over the three properties earlier this year.

Three more Lakeland priorities, held 100%, include Gibbon’s Creek on the Basin’s north-central rim, Newnham Lake to the east and, on the southern rim, Lazy Edward Bay. The company considers Lazy Edward and Newnham drill-ready. Last winter’s Phase I drilling at Gibbon’s, meanwhile, brought near-surface intervals grading to 333.8 ppm U3O8 over 1.1 metres, including 0.13% over 0.23 metres.

As president/CEO/director of the merged entity, Armes would co-manage with Alpha CEO Michael Gunning, who would become executive chairperson. Alpha VP of exploration Sierd Eriks would retain his position. Each company would nominate three candidates to the six-person board.

Over the coming weeks geologists and Lakeland directors Neil McCallum and Jody Dahrouge will work with Eriks and Gunning to “set priorities, establish a timetable and put together a 24- to 36-month strategy of drilling,” Armes says. “Any or all of these eight projects have the potential of a significant discovery.” As for some non-core assets, the team would consider putting them up for JVs or sale.

Of the approximately $3-million combined treasury, roughly one-third would consist of “hard dollars” and the remainder subject to flow-through commitments.

The deal does, however, call for a hiatus on non-essential summer exploration prior to closing.

Subject to all approvals and a shareholder vote planned for early September, the arrangement begins with a three-to-one reverse split for Lakeland followed by the company exchanging one new share for every two Alpha shares. As a result, Lakeland shareholders would get about 60% of the new company’s 41 million shares, with the rest in the hands of Alpha shareholders.

“Both groups are excited about getting together our teams, our treasuries and our projects,” Armes says. “Everything lines up. In my opinion there’s no better merger that could happen in the Basin.”

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.