Monday 5th December 2016

Resource Clips


Posts tagged ‘malawi’

Now, of all times, John Borshoff steps down from Paladin

August 10th, 2015

by Greg Klein | August 10, 2015

Even with Japan’s first nuclear restart expected imminently, one of uranium’s staunchest evangelists might not be in the business long enough to see his predicted price hike. On August 10 Paladin Energy TSX:PDN announced that its board and managing director/CEO John Borshoff “agreed that Mr. Borshoff will step down from his role with the company.” He stays on for a six-month transitional period while Alexander Molyneux takes over as interim CEO.

Now, of all times, John Borshoff steps down from Paladin

John Borshoff

Having founded Paladin over 21 years ago, Borshoff continued to guide it through the post-Fukushima period, suspending operations at the Kayelekera mine in Malawi and selling off 25% of its Langer Heinrich operation in Namibia to China National Nuclear Corp. All the time he both reassured investors and warned consumers that severe price hikes were coming. At times, however, he had to push back his forecast dates as the recalcitrant commodity resisted his predictions.

While Paladin struggled with African operations, its much bigger rival Cameco Corp TSX:CCO went to enormous effort to expand production with its Cigar Lake mine in Saskatchewan’s Athabasca Basin, home to the world’s highest grades.

A geologist with over 30 years’ experience in Australia and Africa, Borshoff previously worked for International Nickel, Canadian Superior Mining and Uranerz. As a result of his achievements, “Paladin has built a unique position in the uranium mining industry and he is recognized as a world authority in this realm,” the company stated.

Non-executive chairperson Rick Crabb credited him for “the vision, tenacity and spirit to create and lead Paladin.”

Faith in uranium’s hotspot

June 12th, 2015

Low prices take another Australian casualty but Athabasca Basin optimism persists

by Greg Klein

The agonizing wait for uranium’s price breakout has taken its toll on two more Down Under-headquartered miners. ASX-listed Energy Resources of Australia plummeted 48% after abandoning a planned expansion of Northern Territory’s Ranger 3 mine. That leaves Rio Tinto NYE:RIO, which holds 68.4% of ERA, considering a post-tax impairment of about US$300 million.

Low prices take another Australian casualty but Athabasca Basin optimism persists

With uranium grades 100 times the world’s average,
Cigar Lake thrives while competitors shut down.

Explaining the decision to dump Deeps’ feasibility study, ERA’s June 11 announcement noted uranium’s lack of price improvement as well as its uncertainty for the immediate future. Additionally, economics would require operations beyond Ranger’s current permitting span, which ends in 2021.

“After careful consideration,” Rio concurred. The giant “does not support any further study or the future development of Ranger 3 Deeps due to the project’s economic challenges.”

Rio had already cut production at its majority-held Rossing mine in Namibia. A South Australia mine, Honeymoon, was taken offline by Uranium One.

The commodity has eluded positive predictions from many quarters, including ASX- and TSX-listed Paladin Energy PDN, which placed its Kayelekera mine in Malawi on care and maintenance and sold a 25% stake in its Langer Heinrich mine in Namibia to China National Nuclear Corp. Those setbacks haven’t stopped Paladin managing director/CEO John Borshoff from predicting sharp price hikes in near- and medium-term contracts.

The long-anticipated market-moving event would be Japan’s first reactor restarts, which would reduce the country’s apparent stockpile and, maybe more significantly, provide a psychological boost to a demoralized industry. Once scheduled for operation this month, the first two restarts currently face a court injunction.

But demoralization isn’t universal. Although Borshoff’s predictions are generally echoed by Tim Gitzel, the Cameco Corp TSX:CCO president/CEO speaks without Borshoff’s tone of desperation. In contrast, Cameco has been expanding production through its majority-held Cigar Lake, which achieved commercial production on May 1. The engineering marvel expects to add six to eight million pounds U3O8 to world supply this year, before hitting 18 million pounds annually by 2018.

The world will need at least four more Cigar Lakes—this in an industry not known for being quick to bring on new production. A mine can take up to 10 years when things go well.—Rachelle Girard,
IR director for Cameco Corp

Speaking at the Cantor Fitzgerald Annual Global Uranium Conference earlier this month, Cameco IR director Rachelle Girard predicted demand would rise 4% annually to about 230 million pounds U3O8 a year within the next decade, compared with today’s output of about 165 million pounds. Girard counted 63 new reactors now being built, an estimated $740-billion investment. She expects a total of 80 reactors over the next 10 years.

Girard predicts even more to come, noting that two billion people currently have very little or no access to electricity. Another two billion are expected to join them by 2050.

Her employer, she confidently maintained, could supply about 30% of global demand by 2024, up from about 16% now. “We have the pounds in the ground to support a lot of growth when the market calls for it.” But Girard insisted, “The world will need at least four more Cigar Lakes—this in an industry not known for being quick to bring on new production. A mine can take up to 10 years when things go well.”

Cigar Lake was discovered in 1981, began construction in 2005 and started production last year.

Industry executives and analysts say uranium needs to rise to a level of $65 to $80 a pound to justify new development. The most recent (June 8) price indicator publicly released by Ux Consulting floundered at a dismal $35.75.

Girard emphasized Cameco’s “especially pleased that several of our Tier 1 assets are located in the prolific Athabasca Basin.” Home to the world’s highest uranium grades, another exploration season has juniors busy, often on the Basin’s margin where they hope to find not so much the next Cigar Lake but another Patterson Lake South.

Meanwhile David Talbot sees a silver lining in ERA’s woes. Bloomberg quoted the Dundee Capital Markets senior uranium analyst stating that the decision to scuttle Deeps’ feasibility “will have a major impact to world production supply.” Talbot explained that while the expansion would have made Ranger the world’s third-largest uranium mine, its cancellation portends a “very positive” sign for uranium prices.

Putting Fukushima behind

November 13th, 2014

As commodity and share prices surge, where does uranium go from here?

by Greg Klein

A sharp climb in the commodity price accompanied by a dramatic rally in stock prices—is this the renaissance uranium-watchers have been waiting for? The metal’s spot price indicator started picking up last summer, but with no real effect on share prices. Then suddenly last week uranium climbed steeply, coinciding with sharp gains for both miners and explorers. Significantly, the commodity’s elevation preceded the November 7 news about Japanese nuclear reactor restarts.

The events provided opportune timing for the November 14 (Down Under time) Paladin Energy TSX:PDN quarterly conference call, with its usual forecasts from managing director/CEO John Borshoff.

As commodity and share prices surge, where does uranium go from here?

Hardly a voice crying in the wilderness, Borshoff has been one of many predicting a steep price hike for uranium. Back in August 2013, for example, he argued that to meet demand prices need to rise two or three years ahead of an anticipated 2016 uranium shortfall. “Price hikes will be severe,” he stressed. “Why this is not worrying the hell out of the utilities completely astounds me.”

Now, he says, “The door to the pre-Fukushima period is at long last starting to open. And those supply shortages that I have for so long been talking about will now start becoming the real issue and the fundamental catalyst driving price increases.”

Uranium began recuperating from its $28 low in early August. In late October, Cameco Corp TSX:CCO president/CEO Tim Gitzel noted the spot price indicator’s increase of about 25%. “We believe the move was largely due to trading activity and market speculation around unforeseen events like the potential impact of Russian sanctions, possible disruption in the U.S. Department of Energy inventory disposition and the labour disruption at our own McArthur River and Key Lake operations,” he said. “We’ll have to wait and see if the increase is sustainable but it has remained relatively stable thus far.”

Borshoff agrees about the trading activity. But he points out that the Cameco strike settled quickly and the potential UN sanctions against Russia never happened. Even so, prices continued to rise. In fact uranium’s trajectory entered a second, steeper phase, quickly rising from about $37 to $42 a pound. That indicates ever-increased trading that’s exposing weak supply, he says.

Nor does he agree with observers who “say that because the term market price has not similarly responded, there is a shallowness in this price recovery.” Borshoff concedes that spot volumes have already tripled those of 2013 with little effect on longer-term contracts. But he predicts additional term contracting over the next six to 12 months will start “testing those shortages we see from our own studies occurring in the post-2016 period.”

The irony is even these price rises will be totally insufficient to incentivize new uranium start-ups to accommodate the extraordinary growth that is needed in supply…. With each year that the building of new mines is delayed, the greater will be the price reaction. This is inevitable.—John Borshoff, managing director/CEO of Paladin Energy

As a result, Borshoff expects term prices to react later this year or during 2015. “The irony is even these price rises will be totally insufficient to incentivize new uranium start-ups to accommodate the extraordinary growth that is needed in supply….” he maintains. “With each year that the building of new mines is delayed, the greater will be the price reaction. This is inevitable.”

Reduced output has already started to take its toll on spot and term prices, Borshoff adds. Paladin’s Kayelekera mine in Malawi and Uranium One’s Honeymoon mine in South Australia have gone on care and maintenance. Production cuts hit Rio Tinto’s (NYE:RIO) majority-held Rossing mine in Namibia as well as American in-situ recovery operations. Kazakhstan’s growth in output, meanwhile, will fall below 2% this year. Paladin sees 2014 global production dropping from 154 million pounds in 2013 to 148 million pounds or less this year.

Additionally, another four million pounds has moved from the spot to term market, Borshoff says. As for this year’s spot market volume of 45 to 50 million pounds, “in our estimate, much of this volume is churn and it is probably only about 25 to 30 million pounds of primary production feeding this important market.” That would indicate a reduction of 40% to 50% in the uranium available to the spot market, Borshoff says.

David Talbot was among others who emphasized that uranium’s sharp increase preceded the latest announcement from Japan. “It is the utilities that are starting to enter the market, suggesting that this rally could have some sustainability,” the Dundee Capital Markets analyst stated in a November 7 note to investors.

Like Borshoff, he added, “We have always said, just like in 2006-2007, when contracting begins and the price moves, it will move fast.”

Talbot went further, however, predicting a “likely rally” in equities. Events so far have proven him right. The same day, several uranium miners and explorers saw their shares take off by at least 20%, some even surpassing 50%, before settling back a bit on November 12 or 13.

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.

A tale of two miners

July 31st, 2014

Cameco and Paladin respond to market vagaries, put their faith in the future

by Greg Klein

A second quarter of relatively low cash costs and high realized prices might have added an understandably rosy tint to Tim Gitzel’s outlook. During a Q2 discussion on July 31 the Cameco Corp TSX:CCO president/CEO expressed optimism in Japan’s—and ultimately the world’s— nuclear industry.

Nine Japanese utilities have submitted applications to restart 19 reactors, he pointed out. Two plants, Sendai units 1 and 2, have entered a 30-day public comment period after passing safety evaluations.

Cameco and Paladin respond to market vagaries, put their faith in the future

Safely distant from the radioactive ore, a McArthur River miner operates
a scoop tram by remote control. Like Cigar Lake, the Cameco operation contains grades 100 times the world average.

“While the initial restarts will be positive, we expect it will take some time for a significant number of reactors to resume operations and begin to consume the inventory built up over the past several years,” Gitzel said.

“While the near to medium term remains uncertain, let me assure you that there are brighter days ahead for the nuclear industry,” he declared. “Today there are 70 reactors under construction around the world, representing billions of dollars of investment and significant growth in future uranium consumption. We expect a net increase of 91 new reactors over the next 10 years and continued growth in the decades to come. Nuclear energy continues to be an integral part of the world’s energy mix.”

The company’s sticking to its previous forecast of annual demand rising from 170 million pounds U3O8 today to about 240 million pounds within 10 years.

As for the present, Cameco’s “marketing strategy and strong portfolio of contracts continue to serve us well in an uncertain market and provide us with an average realized price that continues to outperform both the spot and long-term prices,” he maintained.

With mines in Saskatchewan, the U.S. and Kazakhstan, Cameco currently supplies about 15% of world uranium supply.

For the three months ending June 30, revenue reached $502 million, a 19% increase over the same period last year. Gross profit surged 37% to $136 million and adjusted net earnings rose 30% to $79 million, or $0.20 per share.

Evidently prospering despite market vagaries, Cameco continues to bring new supply onstream. Although a technical problem caused a short-term suspension of the newly opened, 50.025%-held Cigar Lake operation, the mine’s forecast to bring into the world 18 million pounds U3O8 by 2018. A Scotiabank analyst asked Gitzel, “In an environment of excess supply, why wouldn’t you keep those pounds in the ground until they’re needed?”

Replying that it’s “a great project” with favourable cash costs, Gitzel added, “We need the pounds. We’ve got sales commitments for those pounds.”

But not all the company’s projects withstand the storms so strongly. Earlier this week the company received conditional environmental approval for its 70%-held Kintyre mine proposal in Western Australia. A 2012 prefeasibility study, however, “indicated the project would require higher uranium prices or greater total production,” Cameco has stated.

Even so, its expansionary activities contrast with Paladin Energy TSX:PDN. Dismal uranium prices consigned its Kayelekera mine in Malawi to care and maintenance last May and forced the sale of a 25% interest in the Namibian Langer Heinrich mine to China National Nuclear Corp. The sale closed in July, helping Paladin refinance its flagship.

Production cutbacks notwithstanding, cost-cutting measures helped Paladin pull in revenue of US$69.28 million for three months ending June 30. Apart from developments in Japan, the company’s July 28 statement noted China’s expanding fleet. According to Paladin, China put two more reactors into commercial operation last May, bringing the total to 20, with another 29 under construction and 57 planned. “The country anticipates adding 8.6 gigawatts electrical of nuclear capacity during 2014, as compared to 3.2 GWe in 2013.”

Looking to the future, the company continues to develop other projects. In June Paladin announced a 25% increase in measured and indicated resources at its Michelin deposit in Labrador. “Future drilling will concentrate on expanding the mineral resources at both the Michelin deposit and the deposits and prospects occurring in the immediate surrounds,” Paladin stated.

Athabasca Basin and beyond

July 26th, 2014

Uranium news from Saskatchewan and elsewhere for July 19 to 25, 2014

by Greg Klein

Next Page 1 | 2

3.78% U3O8 over 49 metres helps Fission build Patterson Lake South

High grades and wide intervals at relatively shallow depths continue to characterize Fission Uranium’s (TSXV:FCU) Patterson Lake South. Of eight holes released July 21, all showed mineralization, six substantially. Three standout assays boasted 3.78% U3O8 over 49 metres, 3.96% over 40 metres and 5.34% over 25.5 metres. The entire octet came from R780E, the middle and largest of five zones along a 2.24-kilometre potential strike that remains open to the east and west. Some highlights include:

Hole PLS14-192

  • 0.53% uranium oxide (U3O8) over 51 metres, starting at 110 metres in downhole depth
  • (including 2.36% over 5.5 metres)

  • 0.48% over 12.5 metres, starting at 191.5 metres
  • (including 1.27% over 4 metres)
Uranium news from Saskatchewan and elsewhere for July 19 to 25, 2014

PLS14-193

  • 1.62% over 2 metres, starting at 162 metres

PLS14-194

  • 0.86% over 2.5 metres, starting at 187 metres

PLS14-195

  • 0.64% over 4.5 metres, starting at 244 metres
  • (including 2.81% over 1 metre)

PLS14-197

  • 0.81% over 8 metres, starting at 87.5 metres
  • (including 3.65% over 1.5 metres)

  • 5.34% over 25.5 metres, starting at 102.5 metres
  • (including 15.81% over 5 metres)
  • (and including 8.4% over 4 metres)

  • 1.24% over 3.5 metres, starting at 151 metres

  • 2.61% over 13 metres, starting at 157 metres
  • (including 20.04% over 1.5 metres)

  • 2.17% over 2.5 metres, starting at 175.5 metres

PLS14-198

  • 3.96% over 40 metres, starting at 95 metres
  • (including 10.35% over 14 metres)

PLS14-199

  • 0.11% over 6.5 metres, starting at 209 metres

  • 0.42% over 10.5 metres, starting at 233.5 metres
  • (including 3.07% over 1 metre)

PLS14-200

  • 3.78% over 49 metres, starting at 109.5 metres
  • (including 9.34% over 10 metres)
  • (and including 26.32% over 1 metre)
  • (and including 9% over 3.5 metres)

  • 1.16% over 5 metres, starting at 221 metres

True widths weren’t provided.

PLS14-199, along with the previously released PLS14-189 which included 1.93% over 15 metres, sits on the eastern edge of R780E. Their assays prompted Fission to suggest the possibility of closing a 75-metre gap between R780E and R1155E to the east. R780E currently has a strike length of about 855 metres.

While laboratory boffins analyze the final two dozen holes from last winter’s 92, Fission’s field crew continues with a 63-hole, 20,330-metre summer campaign. About 30% of the program will be exploration. But the priority is to delineate a maiden resource scheduled for December.

Ur-Energy reports 8.81 million pounds eU3O8 M&I at Shirley Basin

Ur-Energy TSX:URE released a resource estimate on July 22 for what it calls a “well-defined, high-grade uranium roll front deposit at very favourable production depths.” In the vicinity of the company’s Lost Creek in-situ recovery operation, the Wyoming property came with Ur-Energy’s discount acquisition of Pathfinder Mines. The resource was broken down into two areas:

Fab trend

  • measured: 1.06 million tonnes averaging 0.28% for 6.57 million pounds uranium oxide-equivalent (eU3O8)

  • indicated: 413,674 tonnes averaging 0.12% for 1.08 million pounds

Area 5

  • measured: 176,900 tonnes averaging 0.24% for 947,000 pounds

  • indicated: 84,367 tonnes averaging 0.11% for 214,000 pounds

The M&I total for both areas comes to 8.81 million pounds eU3O8.

The estimate was based on approximately 3,200 historic holes totalling about 366,000 metres sunk before 1992 and on Ur-Energy’s confirmation drilling that finished last May. Resources start at an average depth of about 95 metres. The company stated it’s “moving at a rapid pace to advance the data collection programs necessary to support amendment applications to the existing mining permits and licences.”

The previous week Ur-Energy announced its Lost Creek plant recovered 116,707 pounds U3O8 in Q2. The company set its Q3 production target at 200,000 pounds.

Two new properties expand Lakeland Resources’ Basin-area portfolio

Two more acquisitions announced July 21 solidify Lakeland Resources’ (TSXV:LK) position as one of the largest landholders in and around the Athabasca Basin. Both projects benefit from previous exploration but show greater potential with more recent methodology.

The 20,218-hectare Newnham Lake property sits contiguous to Lakeland’s Karen Lake project around the Basin’s northeastern rim. Depth to the basement rock is expected to be from zero to around 100 metres, the company stated.

Newnham Lake covers parts of a roughly 25-kilometre-long folded and faulted conductive trend that attracted over 140 drill holes by 1984. But, following the understanding of the time, most holes stopped less than 25 metres past the sub-Athabasca unconformity. More recent knowledge of the Basin’s basement-hosted unconformity-style deposits brings new potential to the project.

Previous work did show extensive alteration and anomalous geochemistry along with highly anomalous uranium, nickel and other pathfinders. Several targets remain to be tested.

When we do see that price turnaround that’s been forecast for 2015, we expect to see more joint venture interest in our projects. There’s not a whole hell of a lot of ground left to be had.—Jonathan Armes, president/CEO
of Lakeland Resources

Historic lake and stream sediment samples from Karen Lake, a Lakeland property contiguously northeast, also revealed uranium, nickel and other pathfinders. Historic overburden samples showed over 1% uranium.

Southeast of Newnham and just beyond the Basin, the approximately 21,000-hectare Hatchet Lake sits east of Lakeland’s Fond du Lac property. Although Hatchet covers part of an interpreted extension of the same basement graphitic meta-sedimentary basin, it’s seen little exploration.

As uranium continues to struggle near record-low prices Lakeland president/CEO Jonathan Armes sees this as “a good time to get value for money, advance projects to the drill-ready stage and ideally secure partners to take them to the next level.”

“When we do see that price turnaround that’s been forecast for 2015, we expect to see more joint venture interest in our projects,” he adds. “There’s not a whole hell of a lot of ground left to be had. When companies come back to the table, they’re going to have to partner up. That’s the kind of opportunity we’ll be looking for.”

Helping evaluate the properties are Lakeland advisers with long experience in the Basin. Richard Kusmirski is a veteran of Cameco Corp TSX:CCO and JNR Resources, which became a Denison Mines TSX:DML acquisition. John Gingerich’s background includes Noranda and Eldorado Nuclear, a predecessor of Cameco. They’re working with a new generation of geos from Dahrouge Geological Consulting that includes Lakeland director Neil McCallum.

“They’re compiling all the historic data and reinterpreting it in view of what we know today,” Armes says. “It’s an interesting dynamic to see the guys, old and young, bantering about. It brings new ideas on how to approach things.”

Lakeland may earn a 100% interest in Newnham Lake by paying $100,000 and issuing 2.5 million shares over two years. The vendor retains a 2.5% gross overriding royalty with a 1% buyback provision. Hatchet Lake goes for $13,500, 500,000 shares and a 2.5% GORR, again with a 1% buyback.

The company remains cashed up with approximately $2.5 million in the till, Armes points out. “In the meantime we’ll have some exploration news coming this summer.”

Read more about Lakeland Resources.

Next Page 1 | 2

Athabasca Basin and beyond

June 28th, 2014

Uranium news from Saskatchewan and elsewhere for June 21 to 27, 2014

by Greg Klein

Next Page 1 | 2

Fission about to start $12-million summer program, targets December resource

Apparently hoping to get something really big for Christmas, Fission Uranium TSXV:FCU has yet more delineation drilling planned for Patterson Lake South this summer. Some 63 holes totalling about 20,330 metres are scheduled to start imminently, with 43 closely spaced holes sunk from barges over the lake. The campaign calls for up to four rigs to help produce a maiden resource for December. The focus is R780E, which merged with three other zones last winter to become by far the biggest of five PLS zones along a 2.24-kilometre potential strike.

Uranium news from Saskatchewan and elsewhere for June 21 to 27, 2014

Twenty holes will test electromagnetic conductors prioritized by geophysical and radon-in-water surveys. Fission stated its 31,039-hectare property “remains highly prospective for several kilometres both in the immediate area of known mineralization and along strike in both the WSW and ENE directions.”

The company also plans metallurgical and petrographic studies “to evaluate important characteristics of uranium recovery and rock characteristics, including work on gold recovery.” Back in June 2013 the former Fission Energy/Alpha Minerals joint venture reported gold results from PLS.

A batch of assays released June 16 left 48 holes to report from last winter’s 92. Was that number a fluke?

Lakeland Resources expands exploration prospects with another Athabasca Basin acquisition

With the Fond du Lac project announced June 25, the Lakeland Resources TSXV:LK portfolio now totals 17 properties in and around the Athabasca Basin. The 2,827-hectare newcomer straddles the rim of the northeastern Basin in the vicinity of the company’s Small Lake, Karen Lake and Hidden Bay properties.

Featuring relatively shallow depth to the unconformity, Fond du Lac underwent regional airborne and geochemical surveys, ground EM, magnetic and gravity surveys, and one drill hole by 1984. More recent work confirmed a conductive target and roughly coincident uranium and pathfinder element geochemical anomalies.

“Over the last 30 years there’s been a lot of improvement in how you assess these properties,” corporate communications manager Roger Leschuk tells ResourceClips.com. “Back in the ’70s and ’80s they worked to the best of their knowledge and technology of the time. Now people like Neil McCallum and Jody Dahrouge [of Dahrouge Geological Consulting] can come along and look at it in a different light. So the historic data is just a starting point.”

Subject to TSXV approval, Lakeland gets the 100% interest by issuing 200,000 shares to Anthem Resources TSXV:AYN, which retains a 1.5% NSR.

“The property comes with a $50,000 work commitment by year-end, but we’ll likely spend more on a program that would include a radon survey and boulder-sampling,” Leschuk says. “We want to get it to the drill-ready stage.”

We’re well-financed, we have more cash than we had a year ago and we intend to continue advancing our projects and looking for good partners. We have a busy summer ahead with more news coming.—Roger Leschuk, corporate
communications manager
for Lakeland Resources

Lakeland’s 17 properties now cover 164,316 hectares. In April the company expanded its Lazy Edward Bay project. Two weeks before that Lakeland picked up five other acquisitions. Gibbon’s Creek, the company’s joint venture with Declan Resources TSXV:LAN, has shown surface boulders grading up to 4.28% U3O8 and some of the Basin’s highest radon readings.

“We’re well-financed, we have more cash than we had a year ago and we intend to continue advancing our projects and looking for good partners,” Leschuk adds. “We have a busy summer ahead with more news coming.”

Lakeland also announced its May 30 trading debut on the OTCQX under the symbol LRESF. “The OTCQX is a highly visible trading platform that has emerged as the world’s leading, premier cross-listing venture for international issuers that wish to benefit from U.S. trading and investor demand without diluting their current shareholder base,” the company stated.

Paladin boosts Michelin M&I to 84.1 million pounds U3O8

Although low uranium prices have forced Paladin Energy TSX:PDN to cut back on production, the company continues to build resources for the future. On June 26 Paladin released a substantial upgrade to its Michelin deposit in Labrador, boasting a 25% increase to the measured and indicated categories. The open pit portion uses a cutoff of 0.025% U3O8 to show:

  • measured:10.46 million tonnes averaging 0.0938% for 21.63 million pounds U3O8

  • indicated:5.93 million tonnes averaging 0.0937% for 12.26 million pounds

  • measured and indicated:16.4 million tonnes averaging 0.0938% for 33.89 million pounds

  • inferred:1.64 million tonnes averaging 0.1343% for 4.86 million pounds

Beginning 230 metres below surface, the underground portion uses a 0.05% cutoff to show:

  • measured:5.11 million tonnes averaging 0.1104% for 12.45 million pounds

  • indicated:16 million tonnes averaging 0.1072% for 37.8 million pounds

  • measured and indicated:21.11 million tonnes averaging 0.108% for 50.24 million pounds

  • inferred:7.17 million tonnes averaging 0.114% for 18.02 million pounds

Next Page 1 | 2

Athabasca Basin and beyond

June 14th, 2014

Uranium news from Saskatchewan and elsewhere for June 7 to 13, 2014

by Greg Klein

Next Page 1 | 2

Strateco turns to Saskatchewan while Quebec uranium inquiry comes under fire

For the $123 million spent on it so far, the project has a resource showing 7.78 million pounds U3O8 indicated and 19.22 million pounds inferred. It also has an underground exploration permit issued by the Canadian Nuclear Safety Commission. But Quebec’s moratorium on uranium activity has finally caused Strateco Resources TSX:RSC to shut down its Matoush camp in the province’s Otish Basin. Now with a $1.4-million financing that the company hopes will save its TSX listing, Strateco’s focusing on a Saskatchewan project acquired from Denison Mines TSX:DML.

Strateco turns to Saskatchewan while Quebec uranium inquiry comes under fire

Now mothballed, Strateco’s Matoush project has a 2012 resource
showing 7.78 million pounds U3O8 indicated and
19.22 million pounds inferred.

In a June 12 announcement, Strateco attributed Matoush’s cost-cutting closure to Quebec’s refusal to issue an exploration permit. Some of the project’s facilities and equipment have been sold. The company has already launched legal action over the permit refusal.

Strateco also closed a private placement to try to prevent a TSX delisting. The company raised $1.4 million from Sentient Executive GP IV, an insider.

Meanwhile a Strateco subsidiary, SeqUr Exploration Inc, issued just under 15 million Strateco shares to take on the Jasper Lake package, a 60% option on four eastern Athabasca properties totalling 45,271 hectares that Strateco negotiated with Denison late last year. SeqUr also closed a $100,000 private placement with Sentient. The subsidiary plans exploration “in the coming months.”

Two days before the Strateco announcements a Quebec inquiry into uranium mining and exploration was challenged again, this time by a group of 70 “scientists and professionals from industry and academia.” In an open letter distributed June 10, the group questioned the inquiry chairperson’s neutrality as well as the utility of the proceedings.

Quebec’s environmental watchdog, le Bureau d’audiences publiques sur l’environnement (BAPE), began hearings last month in a process expected to last 12 to 18 months. Until a decision is made whether to allow uranium activity, the moratorium imposed in March 2013 remains in effect. But Labrador, Greenland and Queensland have “recently lifted moratoria that they now perceive as unjustified,” the group maintained.

Calling Louis-Gilles Francoeur’s appointment as chairperson “perplexing,” the open letter stated, “Throughout his career, Mr. Francoeur has tended to echo uranium industry critics. The BAPE is an institution founded on the principle of absolute neutrality. What would become of the BAPE’s credibility if a former mining executive were appointed chairman of the commission?”

Francoeur was selected during the province’s previous Parti Quebecois government.

“Exploration for and development of any mineral, including uranium, cannot go against the public interest,” the group pointed out. But, the signatories argued, “We are heading into a process that was borne of uranium fear-mongering fuelled by an archaic and biased view of the mining industry.” They questioned whether the hearings, with a price tag they peg at over $2 million, “should even be held.”

Quoting November 2013 poll numbers, the group said Saskatchewan’s uranium industry has the support of about 80% of the population, “including 76% of people in the communities and reserves of northern Saskatchewan, where the uranium mines are found.”

The group also noted some environmentalists support nuclear energy, as indicated by “the latest report of the Intergovernmental Panel on Climate Change, an organization established by the United Nations Environment Programme and free from suspicion of complicity with industry.”

The 70 concluded that the industry already faces strict regulations. “It is impossible for any uranium deposit to be developed, and then mined, without the project meeting the most stringent standards and being subject to public hearings,” they stated. “The Canadian Nuclear Safety Commission (CNSC), a globally recognized agency with no ties to industry, sets the standards and has permanent monitoring and, if needed, enforcement powers over all nuclear industry activities.”

The communique follows a similar challenge last month by the Quebec Mineral Exploration Association. The organization called for Francoeur to be replaced, describing his previous statements on the subject as “prejudicial and non-scientific.” A coalition of Quebec natives, doctors and environmentalists, however, have argued for an outright ban on the industry.

Last month Strateco, which has previously stated its intention to take part in the BAPE inquiry, threatened legal action should Quebec not replace Francoeur.

Denison closes acquisition of International Enexco

Its takeover by Denison complete, International Enexco delisted on June 10. Expansionist Denison now holds former Enexco assets in the eastern Athabasca Basin consisting of a 30% interest in Mann Lake and an additional 20% in Bachman Lake, giving Denison full control over the latter project. The company now shares the Mann Lake joint venture with Cameco Corp TSX:CCO (52.5%) and AREVA Resources Canada (17.5%).

A spinco gets Enexco’s U.S. non-uranium properties including the Contact copper project, which approaches pre-feasibility in Nevada.

The transaction went through without the public acrimony that initially ensued when Denison snatched Rockgate Capital from its proposed merger with Mega Uranium TSX:MGA late last year. At the time, Denison stated its intention to spin out its foreign assets and concentrate on the Athabasca Basin.

Next Page 1 | 2

Athabasca Basin and beyond

June 7th, 2014

Uranium news from Saskatchewan and elsewhere for May 31 to June 6, 2014

by Greg Klein

Next Page 1 | 2

NexGen assays improve on radiometric results from Rook 1’s Arrow

Where previous radiometric results found uranium mineralization in seven of eight holes, the Arrow zone at NexGen Energy’s (TSXV:NXE) Rook 1 project now shows mineralization in all eight, according to assays released June 2. The company interprets the results to reveal “multiple parallel, steeply dipping, high-grade uranium mineralization zones within broader mineralized zones” and “continuity of uranium mineralization between holes.” The best results include:

Hole RK-14-30

  • 2.94% uranium oxide (U3O8) over 6.2 metres, starting at 475 metres in downhole depth
  • (including 5.81% over 2.6 metres)
Uranium news from Saskatchewan and elsewhere for May 31 to June 6, 2014

  • 2.51% over 10 metres, starting at 508 metres
  • (including 5.84% over 0.5 metres)
  • (and including 10.26% over 1.7 metres)

  • 1.51% over 4.9 metres, starting at 549.4 metres
  • (including 12.5% over 0.4 metres)

  • 1.61% over 8.4 metres, starting at 570.6 metres
  • (including 8.57% over 0.25 metres)
  • (and including 11.6% over 0.35 metres)
  • (and including 5.1% over 0.3 metres)

Hole RK-14-27

  • 1.04% over 29 metres, starting at 235 metres
  • (including 23.5% over 0.4 metres)
  • (and including 9.42% over 1.1 metres)

Hole RK-14-21

  • 0.37% over 5.75 metres, starting at 517.25 metres
  • (including 5.77% over 0.25 metres)

True widths weren’t provided.

Some of the intercepts showed “very minor” intervals of elevated copper and lead but “potentially deleterious elements such as arsenic, selenium, cadmium and mercury generally constitute only background levels,” NexGen stated. “Arrow is essentially a mono-mineralic uranium deposit without noticeable deleterious metals or waste.”

Winter drilling at Rook 1 consisted of 17 holes totalling 7,442 metres but February’s Arrow discovery suddenly shifted focus to the new area. Arrow’s potential strike currently reaches about 215 metres, open in all directions and at depth, NexGen has stated. More drilling’s planned for summer on the property adjacently east of Fission Uranium’s (TSXV:FCU) Patterson Lake South.

Denison releases two high-grade Wheeler River assays, outlines summer plans

Also improving on previous radiometric results—and not for the first time at that project—Denison Mines TSX:DML released assays for two holes at Wheeler River’s new Gryphon zone on June 3:

Hole WR-556

  • 15.3% U3O8 over 4 metres, starting at 697.5 metres in downhole depth

Hole WR-560

  • 21.2% over 4.5 metres, starting at 759 metres

True widths were estimated at about 75%. The zone remains open in both strike directions and at depth, Denison stated.

In April the company released a batch of high-grade assays from Zone A of Wheeler’s Phoenix deposit, three kilometres southeast of Gryphon. A Phoenix resource is expected this month. But summer drilling will concentrate on Gryphon, which is slated for an 18-hole, 14,000-metre program. “Most of the drilling will consist of 50-metre step-outs along strike and down dip of the new discovery,” Denison stated. “Some of the holes will also complete drill fences 800 metres along strike to the northeast and southwest of Gryphon.” Work begins in mid-June.

With a 60% interest in the project, Denison acts as operator. Cameco Corp TSX:CCO holds 30% while JCU (Canada) Exploration holds the remainder.

Drills will also turn at three other Denison interests this summer. Crawford Lake and Bachman Lake, two more Denison-operated projects, get follow-up work on alteration zones found last year and on anomalies revealed by last winter’s geophysics. Denison holds 100% of Crawford and 80% of Bachman, where International Enexco TSXV:IEC holds the rest.

On June 4 Enexco security holders approved their company’s takeover by Denison.

Exploration drilling at the McClean Lake project will test geophysical anomalies near the McClean South deposit. McClean Lake is held 22.5% by Denison, 70% by project operator AREVA Resources Canada and 7.5% by OURD Canada. In all, the four properties get about 21,000 metres of drilling.

Additionally, Denison has geophysics planned for five properties.

Last month the company announced a $15-million budget for Canadian exploration focusing on the eastern Athabasca Basin.

UEX reports drill results from Laurie and Mirror River JV

UEX Corp TSX:UEX announced drill results from its Laurie and Mirror River projects on June 5. Joint venture partner AREVA Resources Canada acts as operator on both, located about 35 and 55 kilometres respectively east of PLS.

Five holes totalling 1,803 metres at Laurie failed to find significant radioactivity or geochemical values. But they did confirm existence of three conductors at the unconformity and found a large fault zone which will be tested for possible up-dip continuation at the unconformity.

Nor was significant radioactivity encountered in three Mirror River holes totalling 1,579 metres, although one of two conductors was confirmed.

However the projects “remain vastly underexplored and have extensive untested EM conductors that warrant additional drilling,” UEX stated.

Another western Basin project, Erica now undergoes a ground tensor magneto-telluric survey to further examine a conductive trend found by previous geophysics.

All three projects are part of a seven-property, 116,137-hectare western Basin JV package held 49.1%/50.9% by UEX and AREVA Resources Canada. Major UEX projects consist of Shea Creek and Hidden Bay, the former also held 49.1%/50.9% with AREVA, the latter held 100% by UEX. In April the company reported six holes from Black Lake, a JV with Uracan Resources TSXV:URC.

On June 6 UEX announced shareholders re-elected their board and approved management resolutions.

Pistol Bay announces winter drill results from C-5

On June 4 Pistol Bay Mining TSXV:PST released assays for two of six holes from last winter’s 3,344-metre campaign at the C-5 property, where Rio Tinto Canada Uranium Corp acts as operator. Results for hole 14CBK003 showed:

  • 0.054% U3O8 over 1.5 metres, starting at 366 metres in downhole depth
  • (including 0.071% over 0.5 metres)

Located 50 metres northeast and along strike, 14CBK005 showed:

  • 0.041% over 0.32 metres, starting at 379.82 metres

  • 0.022% over 1 metre, starting at 385 metres

True widths weren’t provided. Due to high core loss, assays for 14CBK003 “are not considered truly reflective of the mineralization,” Pistol Bay stated.

The C-4, C-5 and C-6 properties comprise a JV with Rio covering 1,624 hectares adjoining the Denison/Cameco/JCU Wheeler River project. Rio has earned 55% by paying Pistol Bay $147,000 and spending $1 million on exploration so far. The mining giant’s subsidiary may increase its stake to 75% by spending another $1 million by year-end.

Pistol Bay also holds interests in copper-gold properties contiguous with Colorado Resources’ (TSXV:CXO) North ROK discovery and Imperial Metals’ (TSX:III) Red Chris mine in British Columbia, and in a graphite property in Ontario.

Next Page 1 | 2

Athabasca Basin and beyond

May 31st, 2014

Uranium news from Saskatchewan and elsewhere for May 24 to 30, 2014

by Greg Klein

Next Page 1 | 2

Fission Uranium drills 38 metres of 4.44% U3O8 at Patterson Lake South

Still no word on a resource estimate, but Fission Uranium TSXV:FCU released assays for 10 more infill holes from Patterson Lake South on May 29. The latest batch brings the total reported holes from last winter to 40, with 52 more to come. Nine of the most recent came from R780E, the middle and the largest of five zones along a 2.24-kilometre potential strike that’s open to the east and west. Some of the best results show:

Hole PLS14-153

  • 0.34% uranium oxide (U3O8) over 21.5 metres, starting at 166.5 metres in downhole depth
  • (including 1.47% over 2 metres)
Uranium news from Saskatchewan and elsewhere for May 24 to 30, 2014

  • 0.78% over 5.5 metres, starting at 203 metres
  • (including 3.76% over 1 metre)

  • 0.64% over 10.5 metres, starting at 215 metres
  • (including 4.16% over 1 metre)

Hole PLS14-156

  • 4.68% over 19 metres, starting at 103.5 metres
  • (including 12.32% over 5.5 metres)

  • 3.69% over 4.5 metres, starting at 202 metres
  • (including 10.67% over 1.5 metres)

Hole PLS14-160

  • 4.44% over 38 metres, starting at 69 metres
  • (including 14.74% over 10 metres)

  • 1.05% over 9.5 metres, starting at 187 metres
  • (including 3.44% over 2.5 metres)

Hole PLS14-167

  • 1.16% over 18.5 metres, starting at 120 metres
  • (including 3.1% over 6.5 metres)

Hole PLS14-171

  • 1.05% over 18.5 metres, starting at 75 metres
  • (including 4.42% over 2.5 metres)

  • 2.96% over 48 metres, starting at 105 metres
  • (including 8.67% over 11.5 metres)

Fission Uranium also released one assay from R00E, the second zone from the west and location of the project’s first hit.

Hole PLS14-163

  • 0.14% over 5 metres, starting at 128.5 metres

True widths weren’t provided.

Back to the R780E assays, Fission Uranium stated they show “the exceptional strength of uranium mineralization in the middle region over a substantial strike length” of the zone.

Aldrin finds radioactivity at Triple M’s Anticline area

The first hole sunk on the Anticline target at Aldrin Resource’s (TSXV:ALN) Triple M property went radioactive, the company announced May 29. A downhole probe found nine intervals totalling 14.6 metres (not true widths) showing “significant” radiation above 300 counts per second for intercepts above 0.3 metres. The nine intervals occurred at downhole depths between 176.6 and 246.2 metres.

Radiation measurements are no substitute for assays. The company noted that radiation could come from potassium or thorium, but radiometric readings have shown some correlation with uranium at the adjacent PLS project.

Aldrin has also drilled seven holes so far on the project’s Forrest Lake fault, reporting preliminary results for the first four in April. The 12,000-hectare Triple M property consists of two blocks west and south of PLS.

Ur-Energy reports Shirley Basin eU3O8, prepares 43-101

Radiometric results announced May 28 follow completion of a 14-hole confirmation drill program at Ur-Energy’s (TSX:URE) Shirley Basin project in Wyoming. Providing the results not as counts per second but as uranium oxide-equivalent, the company found 13 intercepts above 0.02% eU3O8 for intercepts ranging between 1.83 metres and 5.79 metres thick (not true widths). The intercepts started at downhole depths ranging from 68 to 161 metres.

Historically, the Shirley Basin district has hosted low-grade deposits suited to in-situ recovery operations. But this campaign found higher-grade results too, including:

  • 0.502% eU3O8 over 2.44 metres, starting at 95 metres in downhole depth

  • 0.321% over 3.81 metres, starting at 73.8 metres

  • 0.189% over 5.79 metres, starting at 100.95 metres

Now underway is a 43-101 technical report on the property, part of last December’s acquisition of Pathfinder Mines. In August Ur-Energy began ISR production at another Wyoming project, Lost Creek. In May the company revised the mine’s guidance in view of low uranium prices.

Fission 3.0 and Brades report Clearwater West conductors

On May 27 Fission 3.0 TSXV:FUU and Brades Resource TSXV:BRA announced more detailed results from a previously reported VTEM survey. The companies now say 24 conductive areas have been located on the Clearwater West joint venture, five coinciding with anomalous radiometric readings. In all, seven high-priority areas have been identified on the eastern side of the 11,835-hectare property that borders PLS to the north.

Follow-up work will include boulder prospecting and ground-based electromagnetic and DC resistivity surveys to determine drill targets.

The Fission Energy spinco acts as operator and currently holds 100% of the project. Brades has a three-year, 50% option that would call for $5 million in spending by October 2016 and a first-year commitment of $700,000.

New listing enhances Lakeland Resources’ American exposure

Lakeland Resources TSXV:LK made its OTCQX trading debut May 30, marking an important step “as we continue to grow and expand our shareholder base globally,” said president/CEO Jonathan Armes. “The United States is an important market to be active in and we look forward to the increased visibility and exposure that this new listing will offer.”

In April the company announced a 4,475-hectare expansion to its Lazy Edward Bay project, one of Lakeland’s 16 uranium properties in and around the Basin.

Read more about Lakeland Resources here and here.

Next Page 1 | 2