Uranium news from Saskatchewan and elsewhere for July 27 to August 2, 2013
by Greg Klein
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Alpha/Fission extend Patterson Lake South R390E zone by 30 metres
Just two weeks ago they were crowing about “the most abundant off-scale mineralization of any hole” at Patterson Lake South. Now Fission Uranium TSXV:FCU and 50/50 joint venture partner Alpha Minerals TSXV:AMW say they’ve surpassed that. Scintillometer readings for one of two shallow step-outs reported July 29 represent “the largest accumulation of discrete off-scale mineralized intervals in any drill hole at PLS to date.” The two holes add 30 metres of strike to R390E, the middle of three zones along an 850-metre northeast-southwest trend. Including the 15-metre extension resulting from the hole announced July 18, the campaign’s first three holes have extended the zone’s strike by 75% to 105 metres.
The scintillometer measures gamma radiation from drill core in counts per second, up to an off-scale reading over 9,999 cps. Scintillometer readings are not assays, which are still pending. A radiometric probe will also be used to measure downhole radiation.
Hole PLS13-073, 15 metres grid east of the zone’s nearest hole, showed:
- <300 to >9,999 cps over 19.5 metres, starting at 102 metres in vertical depth
- <300 to >9,999 cps over 11 metres, starting at 142.5 metres.
True widths weren’t available. Drilled to a depth of 248 metres, the hole encountered Devonian sandstone at 50 metres’ depth and a basement unconformity at 53 metres.
Hole PLS13-075, 15 metres grid west of the nearest hole, showed:
- <300 to >9,999 cps over 70 metres, starting at 57.5 metres in vertical depth
- (including 580 to >9,999 cps over 23 metres)
- <300 to 6,800 cps over 12 metres, starting at 130 metres
- <300 to >9,999 cps over 2.5 metres, starting at 146.5 metres
- 400 to 1,800 cps over 2 metres, starting at 151 metres
- 1,000 cps over 0.5 metres, starting at 157 metres
- <300 to 3,600 cps over 2.5 metres, starting at 160 metres.
Again, true widths were unknown. The 188-metre hole struck sandstone at 47 metres and the basement unconformity at 49.3 metres. The first PLS13-075 result above included 21.65 metres of mineralization over 9,999 cps in several intervals, which the JV partners call the project’s “largest accumulation of discrete off-scale mineralized intervals” so far. They include 16.7 metres of continuous off-scale readings starting at 73.5 metres’ depth. Although Alpha and Fission anticipate that its main zone of mineralization has been found, drilling on this hole continues.
As does the $6.95-million program, comprising ground geophysics and about 44 holes totalling 11,000 metres.
Paladin cancels sale; reports $180-million impairment, $81-million placement, fatality
Paladin Energy TSX:PDN has dropped negotiations to sell a minority interest in its Langer Heinrich mine in Namibia. In one of three August 2 announcements, the company said uranium’s currently low price would drive down offers on an asset with expansion potential and a mine life of over 20 years.
Paladin also reported it expects a further non-cash impairment estimated at US$180 million before taxes, which the company attributed to its Kayelekera mine in Malawi, Niger exploration projects “and other smaller items.” Paladin suspended work in Niger following May 23 terrorist attacks.
Within minutes of reporting the suspended sale Paladin announced it was offering a private placement “to provide adequate funding for the company into the September quarter” despite low uranium prices. Later the same day Paladin announced it closed the placement at $C81 million. The money came from 125.6 million shares, representing 15% of the company’s existing issued capital, at a 30% discount to the stock’s previous ASX close.
Paladin managing director/CEO John Borshoff said the money would help “reduce debt in the mid-term.”
On July 31 the company reported a fatal accident in Kayelekera’s engineering workshop.
Read about Paladin’s last quarterly report.
Powertech forms strategic alliance with Asian uranium investor
A Vancouver-headquartered company with uranium projects in three American states announced a strategic alliance with Asia’s “only significant uranium investment and development vehicle.” On August 1 Powertech Uranium TSX:PWE reported Azarga Resources Ltd, a privately held Hong Kong-based company, agreed to a number of deals.
As of July 22 Azarga bought 24.65 million shares at $0.07 for a total of $1.72 million, giving the purchaser an initial 17.5% of Powertech. Azarga also provided Powertech with $514,350 in return for a debenture with the amount payable at 115% within 12 months or 130% within two years. Powertech may instead convert the principal into shares granted to Azarga at $0.07. Full conversion would leave Azarga with an approximate 22% interest in Powertech.
Azarga also agreed to buy a 60% chunk of Powertech’s Centennial project in Colorado for $1.5 million over two years. Should shareholders oppose the purchase, $1 million of the purchase price would be converted to a debenture on the same terms as the other. On completing the 60% purchase, the two companies would form a JV with Azarga acting as project operator.
The deal would include a put option, in which Powertech could sell its remaining 40% after January 1, 2017, for $250,000, and a call option, allowing Azarga to buy the 40% after that date for $7 million or, within 10 days of a change of control at Powertech, for $1 million.
The companies further agreed to share data and expertise, with Azarga using “its best efforts to support any equity financings” undertaken by Powertech. In a statement accompanying the announcement, Powertech president/CEO Richard Clement said Azarga’s “positioning in Asia will provide enhanced access and exposure to those markets.”
The transactions are subject to shareholder and TSX approval.
Powertech released a preliminary economic assessment for an in-situ recovery (ISR) mine at Centennial in August 2010. Following local opposition, Colorado imposed new restrictions on uranium mining the following month. Powertech lost its court challenge against the new regulations in July 2012. By that time the company had already shifted focus to its Dewey-Burdock project in South Dakota, for which it released a revised PEA in April 2012. The project is now undergoing permitting and licensing with the United States Nuclear Regulatory Commission. Powertech has two other uranium projects in Wyoming.
Azarga stated it currently has no plans to develop Centennial but will instead review the project’s exploration and development potential. Azarga also holds an 80% operating interest in “the largest-known Soviet-era resource in the Kyrgyz Republic,” as well as interests in other uranium projects in the U.S. and Turkey.
Forum begins airborne radiometrics over PLS-adjacent Clearwater project
On July 30 Forum Uranium TSXV:FDC announced airborne radiometrics had begun over its Clearwater project, adjacently southwest of Alpha/Fission’s PLS property. The survey consists of 1,463 line-kilometres at 100-metre spacing over the 99-square-kilometre property to measure surface radioactivity in outcrops or boulder trains using a proprietary system of Goldak Airborne Surveys. Forum says preliminary interpretation of its magnetic and electromagnetic survey suggests one of Clearwater’s conductors hosts the PLS discovery.
On further scrutinizing the airborne surveys, the company will begin prospecting, radon surveys and lake sediment geochemical sampling this month. Ground geophysics might also be used to identify drill targets.
In a collaborative effort, the surveys have also been covering PLS-area properties held by Aldrin Resource TSXV:ALN and the Western Athabasca Syndicate. The latter is a four-company strategic alliance consisting of Skyharbour Resources TSXV:SYH, Athabasca Nuclear TSXV:ASC, Lucky Strike Resources TSXV:LKY and Noka Resources TSXV:NX, which are jointly exploring a 275,361-hectare land package in the vicinity of the Fission/Alpha discovery. On July 23 the syndicate announced an extension of its portion of the surveys.
Earlier in July, Forum announced it extended the company’s Key Lake-area holdings in the Athabasca Basin’s southeast corner.
Ur-Energy begins Lost Creek production in Wyoming
Ur-Energy TSX:URE began mining its Lost Creek operation on August 2. The ISR project in Wyoming’s Great Divide Basin took eight years and US$95 million to develop and should, according to an April 2012 PEA, produce about 7.38 million pounds uranium oxide (U3O8) over 14 years. The 2012 numbers assumed uranium prices ranging from $55 to $80 a pound, substantially higher than the current seven-year low of $34.50. But with those numbers the PEA used an 8% discount rate to calculate a pre-tax net present value of $181 million and an 87% internal rate of return.
Ur-Energy says it holds long-term contracts with several U.S.-based utilities and will begin deliveries in Q4.
On July 30 the company reported filing its Q2 report on sedar.com.
Cameco reports Q2 results, makes company and commodity forecasts
Cameco Corp’s TSX:CCO Q2 report came out August 1, with the company reporting $421 million in revenue, 49% above the same period last year and a $99-million gross profit, up 98%. Net earnings attributable to equity holders came to $34 million or $0.09 a share. Adjusted net earnings were $61 million or $0.15 a share.
Cameco president/CEO Tim Gitzel addressed a conference call, speaking optimistically about Cigar Lake’s imminent start-up, a planned 50% production increase and future uranium prices.
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