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Posts tagged ‘northern territory’

Benefits of foreign ownership

June 22nd, 2015

Cameco and Denison support Canada’s Paladin decision

by Greg Klein

At least some Canadian uranium companies welcome a decision that they say will encourage greater investment and reciprocal deals overseas. In what Paladin Energy PDN called an historic announcement on June 22, Canada’s federal government approved the Australian’s ownership of its proposed Michelin uranium mine in Labrador. The decision comes under a 1987 policy that requires at least 51% Canadian ownership of uranium mines (although it doesn’t apply to exploration or development projects). Exceptions, however, may take place when no Canadian partners can be found.

The feds’ decision “overcomes a huge hurdle,” said John Borshoff, managing director/CEO of the ASX- and TSX-listed company, which holds 100% of Michelin and currently produces uranium in Namibia.

But the announcement benefits others besides Paladin, indicating “positive news for the space for sure,” Denison Mines TSX:DML president/CEO David Cates tells ResourceClips.com. “I think anything that’s opening up the country for business and investment from abroad is good for all uranium companies, whether it’s through partnership or an M&A deal.”

Cameco and Denison support Canada’s Paladin decision

The government decision also brings to mind an October 2013 agreement in principle between Canada and the EU to scrap the 49% limit on foreign ownership. Ratification of the accord, which reportedly followed intense lobbying from Rio Tinto NYE:RIO and French giant AREVA, could take two years following the initial agreement. AREVA, active in several Canadian joint ventures, holds a 64.8% stake in the advanced-stage Kiggavik project in Nunavut.

Cates doesn’t think the sector necessarily needs the restriction. “What would we be protecting against?” he asks, pointing out that Canada exports most of its uranium. “If we’re going to sell to the world anyway, why not let the world’s capital develop some of those resources and generate returns for Canadians through tax dollars and jobs?”

The feds’ announcement valued this country’s exports at more than $1 billion per year, making Canada the world’s second-largest supplier. Canada’s nuclear industry employs over 30,000 workers, including 5,000 in uranium mining, according to the Ministry of Natural Resources. Citing Paladin estimates, the announcement said Michelin could “create up to 750 jobs during the construction phase and up to 350 jobs during the operational phase,” should the project make it into production.

“To me, this is just opening up the capital market to other companies,” Cates adds. “It doesn’t have to start with a takeout. It could start with a strategic investment that turns into an acquisition of control down the road. Either way, Canadian companies and Canadian shareholders are going to benefit.”

Cameco Corp TSX:CCO actually backed Paladin’s application with a letter of support, senior communications specialist Carey Hyndman tells ResourceClips.com. “We take no issue with the government liberalizing those restrictions, when it comes to countries that offer that reciprocal access. Australia of course has those policies that allow us to do the same.”

But might there be a downside for Cameco? By far Canada’s largest uranium company, it has long dominated Saskatchewan’s Athabasca Basin, home of the world’s highest grades. Even so, the company was accused of complacency in 2012, when Rio grabbed the Roughrider deposit from under Cameco’s nose, with the Anglo-Australian’s $654-million buyout of Hathor Exploration. Any relaxation of foreign ownership restrictions might bring more competition.

It doesn’t have to start with a takeout. It could start with a strategic investment that turns into an acquisition of control down the road. Either way, Canadian companies and Canadian shareholders are going to benefit.—David Cates,
president/CEO of Denison Mines

“As long as we’ve got that reciprocal possibility in the other country, then we think it’s fair to liberalize that restriction,” responds Hyndman.

The governments of Newfoundland and Labrador, Saskatchewan and Australia support the Michelin decision, according to Canada’s Natural Resources ministry.

Cameco owns 100% of Yeelirrie, which the company calls “one of Australia’s largest undeveloped uranium deposits.” Additionally Cameco holds 70% of the Kintyre project, also in Western Australia, which won conditional environmental approval last summer. A decision to begin mining would depend on an improvement in either production potential or uranium’s price, the company said at the time.

While Cameco has been ramping up Canadian production with Cigar Lake, low prices last year forced Paladin to suspend operations at its Kayelekera mine in Malawi and sell 25% of its Namibian Langer Heinrich operation to China National Nuclear Corp.

The Canadian government’s announcement comes as three directors of ASX-listed Energy Resources of Australia resigned, the latest fallout from another casualty of uranium prices. This month Rio abandoned plans to expand the two companies’ Ranger 3 mine in Northern Territory. Majority-owner Rio faces a possible US$300-million impairment.

But Paladin’s June 22 statement quotes the ever-positive Borshoff talking of “the inevitable market improvement ahead.” His company hopes to begin Michelin production “when the uranium price is at an appropriate level and after obtaining all necessary approvals and consents.” More immediate plans call for a summer exploration program beginning in July, followed by about 6,000 metres of winter drilling.

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.

Athabasca Basin and beyond

October 10th, 2014

Uranium news from Saskatchewan and elsewhere for October 4 to 10, 2014

by Greg Klein

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Fission unveils Patterson Lake South’s best intercept yet, moves to TSX

It’s now TSX:FCU. No longer preceding its ticker with a V to indicate “Venture,” Fission Uranium graduated to the big board on October 8. Two days earlier the company released its first assays from summer drilling, unloading reams of results for 29 delineation holes on Patterson Lake South’s main R780E zone. Composite numbers made hole PLS14-248 the project’s second-best so far, with one interval hitting 13.23% U3O8 over 47.5 metres—“the strongest discrete mineralized interval drilled at PLS to date,” the company crowed.

“All 29 holes returned strong to moderate mineralization at shallow depth,” Fission modestly added. Some of them also extended the main zone’s width and depth. At one point the zone was laterally extended 77 metres north; at another, 41 metres south. At its widest point R780E takes up 164 metres. With a continuous strike of 930 metres, it’s by far the biggest of four zones along a 2.24-kilometre potential strike.

Several of the best results follow:

Hole PLS14-220

  • 1.11% U3O8 over 14.5 metres, starting at 97 metres in downhole depth
  • (including 3.48% over 3 metres)

  • 1.22% over 10.5 metres, starting at 163.5 metres
  • (including 8.7% over 1 metre)
Uranium news from Saskatchewan and elsewhere for October 4 to 10, 2014

PLS crews drilled day and night to delineate a December resource.

PLS14-221

  • 1.88% over 12 metres, starting at 213.5 metres
  • (including 8.17% over 1.5 metres)

PLS14-223

  • 1.69% over 8 metres, starting at 122 metres
  • (including 3.6% over 3 metres)

  • 1.43% over 8 metres, starting at 178 metres
  • (including 4.75% over 2 metres)

PLS14-224

  • 1.24% over 17.5 metres, starting at 130.5 metres
  • (including 10.7% over 1.5 metres)

PLS14-225

  • 0.61% over 39 metres, starting at 146 metres
  • (including 1.97% over 8.5 metres)

  • 0.93% over 9 metres, starting at 214.5 metres
  • (including 1.84% over 2.5 metres)

  • 7.53% over 1.5 metres, starting at 260 metres

PLS14-226

  • 1.9% over 5 metres, starting at 176 metres
  • (including 5.5% over 1.5 metres)

  • 1.02% over 10 metres, starting at 192 metres
  • (including 4.02% over 2 metres)

PLS14-229

  • 1.75% over 27.5 metres, starting at 96.5 metres
  • (including 9.64% over 5 metres)

PLS14-230

  • 0.66% over 23 metres, starting at 183.5 metres
  • (including 4.99% over 1 metre)

  • 8.61% over 1.5 metres, starting at 229 metres

  • 2.16% over 13 metres, starting at 240 metres
  • (including 6.58% over 3 metres)

  • 1.46% over 13 metres, starting at 258 metres

PLS14-240

  • 0.72% over 41.5 metres, starting at 83.5 metres
  • (including 2.04% over 9 metres)

PLS14-243

  • 1.05% over 32.5 metres, starting at 102.5 metres
  • (including 4.85% over 7 metres)

PLS14-247

  • 0.79% over 13.5 metres, starting at 93.5 metres
  • (including 2.17% over 3 metres)

  • 2.67% over 30.5 metres, starting at 111 metres
  • (including 6.84% over 5.5 metres)
  • (and including 6.28% over 4.5 metres)

PLS14-248

  • 13.23% over 47.5 metres, starting at 130 metres
  • (including 35.13% over 16.5 metres)
  • (and including 14.92% over 1 metre)

  • 5.13% over 12 metres, starting at 230 metres
  • (including 35.3% over 1.5 metres)

True widths weren’t provided.

Still pending are assays for 31 delineation holes and 22 exploration holes. A maiden resource will likely precede the next round of drilling.

NexGen releases Rook 1’s best-yet results, offers $10-million bought deal

Staking its own claim to Athabasca Basin bragging rights, NexGen Energy TSXV:NXE released one hole October 6 that shows the best assays so far from Rook 1’s Arrow zone and “amongst the best drill results” in the Basin. While competing with even better assays announced the same day from next-door neighbour Fission, NexGen’s summer program has shown northern Saskatchewan’s potential for further discoveries.

Results for the vertical hole AR-14-30 showed:

  • 0.49% U3O8 over 92 metres, starting at 297 metres in vertical depth
  • (including 2.25% over 16.6 metres)

  • 2.45% over 45 metres, starting at 419 metres
  • (including 4.96% over 10 metres)
  • (and including 4.97% over 11.5 metres)

  • 15.47% over 4.5 metres, starting at 466.5 metres

  • 10.17% over 20 metres, starting at 488 metres
  • (including 13.92% over 14.5 metres)
  • (which includes 25.22% over 6.5 metres)

  • 7.54% over 63.5 metres, starting at 512.5 metres
  • (including 10.32% over 46 metres)
  • (which includes 35.19% over 7 metres)
  • (which includes 66.8% over 0.5 metres)

  • 0.08% over 7 metres, starting at 580 metres

  • 0.21% over 7 metres, starting at 721 metres

True widths weren’t provided.

Present too were gold, silver and copper. The best gold grades showed 10.78 grams per tonne over 10 metres, 3.23 g/t over 13 metres, 2.62 g/t over 14 metres, 6.97 g/t over 4 metres and 1.02 g/t over 5 metres. “There is some correlation of uranium values with these metals of potential economic interest, which are reported by SRC Geoanalytical Laboratories data to occur more frequently with the samples of higher-grade uranium mineralization,” NexGen stated.

“Consistent with all previous assays from Arrow, AR-14-30 returned very low concentrations of deleterious metals (arsenic, antimony, selenium).”

The zone currently covers 515 metres by 215 metres, with mineralization starting at 100 metres in depth and reaching 730 metres. Arrow remains open in all directions and at depth. The $7-million, 18,500-metre summer program consisted of 24 Arrow holes and nine regional holes. Winter plans include delineation and expansion at Arrow and exploration drilling to the northeast.

Additionally encouraging news came October 7 as the company announced a $10-million bought deal private placement, with an option to increase that to about $11.5 million. The offer’s expected to close on or about November 11.

On October 8 NexGen stated that legal action by Alpha Exploration TSXV:AEX had been dismissed by the Supreme Court of British Columbia. Alpha, which closed a $837,500 private placement October 9, said it “will consider pursuing a decision by full trial.”

Lakeland Resources finds strong surface radioactivity at Lazy Edward Bay

More results are coming but initial findings show radioactivity at surface in springs, muds and boulders at Lakeland Resources’ (TSXV:LK) Lazy Edward Bay project. Announced October 9, the 26,375-hectare property on the Athabasca Basin’s southeastern margin underwent a summer program of rock, soil and water geochemical surveys, as well as RadonEx.

Work focused on two areas, the Bay and Liberty trends. At Liberty, a wide conductive zone about five kilometres long, the crew found a strongly radioactive spring and bog with scintillometer measurements between 500 and 3,300 counts per second. Radioactive boulders measured up to 5,600 cps. Historic work has found uranium in diabase dykes intruding on part of the conductive trend, including 224 ppm U3O8 over 0.5 metres.

The Bay trend consists of two parallel conductive trends, each about eight kilometres long, where historic drilling found anomalous uranium, boron, nickel and pathfinder metals. This summer’s RadonEx survey found strongly anomalous results associated with the historic conductors, the company stated.

“Our corporate strategy of identifying early-staged, grassroots projects through the review of historic exploration data continues to pay dividends as the Lazy Edward Bay property is confirmed to host multiple zones of radioactivity associated with historic conductors,” said Lakeland president Jonathan Armes.

Historic work came to millions of dollars. Multiple airborne and ground geophysical surveys and approximately 54 drill holes identified at least six conductive trends extending over 30 kilometres. Multiple sites featured strong alteration and/or anomalous radioactivity. Depth to the unconformity ranges from zero to 350 metres.

Still to come are full results for the summer program, prior to setting winter plans.

Last week Lakeland reported surface samples showing gold and platinum group elements, along with some rare earths and anomalous low-grade uranium, from its Star property. On the Athabasca Basin’s northern rim, the claims sit adjacent to Lakeland’s Gibbon’s Creek property, which has shown some of the Basin’s highest RadonEx readings, as well as boulder samples grading up to 4.28% U3O8. The two properties now comprise one project joined by a major regional structural lineament associated with three mineralized systems.

Read more about Lakeland Resources.

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Athabasca Basin and beyond

June 14th, 2014

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

by Greg Klein

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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.

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Athabasca Basin and beyond

March 9th, 2014

Uranium news from Saskatchewan and elsewhere for March 1 to 7, 2014

by Greg Klein

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Fission Uranium merges two zones, narrows gap between two others at Patterson Lake South

Fission Uranium merges two zones, narrows gap between two others at Patterson Lake South

Fission Uranium has four of its five rigs trying
to fill the gaps in the now six-zone PLS project.

With several zones stretched along a 1.78-kilometre potential strike at Patterson Lake South, Fission Uranium TSXV:FCU obviously wants to find one big, shallow, high-grade deposit. That dream came closer to reality with radiometric results released March 5 and 7. Zones R780E and R945E are now one, forever intertwined, while the gap between two zones to the west has been narrowed.

Scintillometer results from 20 holes released March 5 show mineralization at depths as shallow as 54 metres and as deep as 459 metres. Thirteen holes showed off-scale intervals, reaching the maximum 9,999 counts per second on the hand-held device that measures drill core for gamma radiation. Scintillometer readings are no substitute for assays, which are pending.

Apart from the hope of merging more zones—the goal of this winter’s drill program—Fission Uranium sees expansion potential. The best hole of this batch was the most easterly of the newly merged zone, which “bodes extremely well for high-grade expansion to the east.”

Two days later Fission Uranium unveiled scintillometer results for four more holes, each from a different zone, starting with R780E and moving west to the discovery zone. The interval nearest to surface started at 51 metres and the deepest ended at 276 metres. Intervals from one hole showed a total of 16.18 metres of off-scale radioactivity, while another hole gave up an off-scale composite of 2.65 metres. The gap between R390E and R585E has been narrowed to about 60 metres.

With 36 of the planned 85 winter holes complete, Fission Uranium claims a 100% hit rate. The company has one rig exploring outside the mineralized trend and four others attacking the gaps between these six zones:

The discovery zone, R00E, has a 165-metre strike and a lateral width up to about 45 metres. About 135 metres east, R390E has a 255-metre strike and a lateral width up to about 50 metres. Sixty metres east again, R585E has a 75-metre strike and a lateral width up to about 20 metres. About 105 metres east, R780E now has an approximately 270-metre strike, as a result of subsuming R945E. The lateral width reaches up to about 90 metres.

R780E’s geology “is similar to other zones,” Fission Uranium stated, “consisting of mineralization primarily associated with sequences of steeply south-dipping pelitic lithology with localized mylonites and cataclasites.”

Two other zones at the eastern and western extremities, R1155E and R600W, bring the potential strike to 1.78 kilometres.

Two weeks earlier Fission Uranium released lab assays from R585E that showed the project’s best hole ever—or maybe that should be “so far.”

Update: On March 10 Fission released its “second-best” radiometric results from PLS. Read more.

NexGen announces $10-million bought deal for Athabasca Basin exploration

Uranium news from Saskatchewan and elsewhere for March 1 to 7, 2014

With Fission Uranium’s PLS rigs in the background, NexGen drills Rook 1.

A $10-million bought deal for NexGen Energy TSXV:NXE reinforces the company’s new prominence in Athabasca Basin uranium exploration. Announced March 4, the private placement follows news of radiometric results from a new area of the company’s Rook 1 project, which is adjacent to PLS.

Subject to approvals, the deal involves 22.3 million units at $0.45 and gives the underwriters an option to buy an additional 15%. Each unit consists of a share and one-half warrant, with each entire warrant exercisable at $0.65 for two years. Proceeds will go to Basin exploration, working capital and general corporate purposes.

NexGen’s stock took off with the February 19 release of radiometric readings from the first hole in Rook 1’s Arrow area, which the company called “a totally new zone of uranium mineralization.” The news propelled the company from a 52-week low of $0.225 to a 52-week high of $0.65 in two days. The stock closed March 7 at $0.49.

Meanwhile NexGen has moved its other rig to Arrow to focus two drills on the new area.

NexGen holds several properties in the Basin. But it has yet to release results from last summer’s nine-hole campaign on the Radio project, where the company has a 70% earn-in.

NexGen expects to close the bought deal by March 26.

Zadar announces 2014 plans for PNE and Pasfield projects

With permit applications submitted, Zadar Ventures TSXV:ZAD announced plans for two projects on March 3. The 15,292-hectare PNE, about 11 kilometres northeast of PLS, has about 3,500 metres scheduled for winter and summer drilling, along with ground-based geophysics. Previously identified radon anomalies and conductive trends will help determine targets.

Plans for the 37,445-hectare Pasfield Lake property, within the Cable Bay shear zone in the east-central Basin, include airborne and ground geophysics and a proposed 3,800 metres of drilling “followed by a staged program of uranium exploration culminating in [a] 32,000-metre drilling program,” the company stated.

Pasfield Lake is one of a number of properties that Zadar acquired from Canterra Minerals TSXV:CTM late last year.

Noka Resources/Alpha Exploration begin radon surveys on Carpenter Lake

Radon surveys on lake water and sediment have begun at Carpenter Lake on the Basin’s south-central edge. Announced March 4 by Noka Resources TSXV:NX and Alpha Exploration TSXV:AEX, the four-to-five-week agenda will include sampling from about a thousand locations over a 16-kilometre stretch of the Cable Bay shear zone, which the companies have described as a “major regional shear zone with known uranium enrichment.”

Spring and summer plans for the 20,637-hectare property include high-resolution airborne radiometrics to search for near-surface uranium boulders, followed by ground prospecting and geochemical sampling. The work is part of the Alpha Minerals spinco’s 60% earn-in from Noka, a member of the Western Athabasca Syndicate that plans to drill its PLS-vicinity Preston Lake property this month.

Late last month Noka closed a $1.13-million private placement. Alpha Exploration announced plans for other projects in December and January.

Hodgins Auctioneers pursues Basin uranium claims

A company specializing in auctioning equipment and real estate has signed a conditional agreement to acquire uranium interests in the Basin. Under a deal announced March 6 with Majesta Resources Inc, Hodgins Auctioneers TSXV:HA would get a 25% interest in a 39,125-hectare contiguous package that comes within 10 kilometres of the Key Lake mill.

Apart from TSXV approval, the transaction hinges on raising a $350,000 private placement.

An initial 25% would cost Hodgins $100,000 in cash or debt, two million shares and $300,000 in exploration spending. An additional 35% would require an extra four million shares and $400,000 in spending. A further 30% would call for another $400,000 cash or debt and two million shares.

Hodgins attributed a “low cost relative to similar transactions in the area due to the relationship between two of the insiders of the corporation and the party which owns the mineral claims.” Majesta would act as project operator.

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Athabasca Basin and beyond

January 12th, 2014

Uranium news from Saskatchewan and elsewhere to January 10, 2014

by Greg Klein

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Fission Uranium says lower-grade assays confirm new PLS zone 195 metres east

Fission Uranium TSXV:FCU continues to pick away at its nearly 50-hole backlog of assays from Patterson Lake South. Results released December 30 come from the project’s eastern-most high-grade zone as well as a not-so-high-grade zone farther east.

Highlights from hole PLS13-099 on zone R945E include:

  • 0.11% uranium oxide (U3O8) over 15 metres, starting at 122 metres in downhole depth

  • 0.14% over 16 metres, starting at 140 metres

  • 0.99% over 23.5 metres, starting at 159.5 metres
  • (including 2.49% over 8.5 metres)

  • 3.99% over 17 metres, starting at 185.5 metres
  • (including 18.52% over 3.5 metres)
  • (which includes 43.5% over 0.5 metres)

  • 0.12% over 8.5 metres, starting at 205 metres

  • 2.69% over 30.5 metres, starting at 222.5 metres
  • (including 5.1% over 6 metres)
  • (and including 5.4% over 7.5 metres)

True widths were unavailable. With a dip of -88 degrees, downhole depths were close to vertical. Three other holes from R945E were released earlier in December. The zone remains open in all directions.

About 195 metres east, two other holes confirm the existence of the less-spectacular zone R1155E. The single assay released from hole PLS13-090 shows:

  • 0.09% over 12 metres, starting at 189.5 metres

Results from PLS13-103 show:

  • 0.07% over 1.5 metres, starting at 176 metres

  • 0.06% over 3.5 metres, starting at 188 metres

  • 0.06% over 1.5 metres, starting at 199.5 metres

  • 0.05% over 0.5 metres, starting at 209 metres

  • 0.06% over 0.5 metres, starting at 365.5 metres

Again, true widths weren’t provided. Both holes were vertical. The results, from a “geologic setting similar to the high-grade zones to the west, [lead to] encouragement that the mineralized system remains open to the east,” the company stated. Winter drilling will continue east of R945E and between the higher-grade zones to the west.

Just before Christmas the company released assays from one hole at zone R585E and seven from R390E. On January 9 Fission Uranium announced that president/COO/chief geologist Ross McElroy had won PDAC’s 2014 Bill Dennis Award for a Canadian discovery or prospecting success. “It takes a team to make a discovery and I’m delighted to have won this award on behalf of Fission,” the statement quoted McElroy.

Recognition also goes to Fission Uranium’s former joint venture partner. In mid-December the father/son team of Ben and Garrett Ainsworth, formerly with Fission acquisition Alpha Minerals and now with spinco Alpha Exploration TSXV:AEX, won the 2013 Colin Spence Award for excellence in global mineral exploration from the Association for Mineral Exploration British Columbia for their part in the PLS discovery.

Lakeland Resources surveys historic drilling, finds high-grade boulders and some of Athabasca Basin’s highest radon readings

Lakeland Resources’ TSXV:LK Gibbon’s Creek uranium project now shows some of the highest radon gas readings ever found in the Athabasca Basin, the company says. Data collected last year and released January 8 also confirms an historic boulder field, with assays reaching 4.28% U3O8. Additionally, a DC resistivity survey has mapped basement alteration found by historic drilling.

Lakeland Resources Gibbon's Creek exploration

Existing access trails are among the benefits of more than
$3 million of previous work at Riou Lake/Gibbon’s Creek.

The 12,771-hectare project forms part of the 35,463-hectare Riou Lake property, a joint venture in which Declan Resources TSXV:LAN may earn 70% over four years, with a first-year exploration commitment of $1.25 million.

The survey by RadonEx Exploration Management, whose proprietary technology proved vital to Fission Uranium’s PLS, found Gibbon’s Creek readings peaking at 9.93 picocuries per square metre per second (pCi/m²/s). According to a statement by Lakeland president Jonathan Armes the readings, “to our knowledge, are the highest ever reported for the Athabasca Basin area.”

The highest value coincides with a uranium-in-soil anomaly found in historic work, part of more than $3 million of exploration performed on Riou Lake prior to Lakeland’s acquisition of the northern Basin property. Nine more radon samples reached above 3.2 pCi/m²/s, while the background level showed about 1.3 pCi/m²/s.

Meanwhile assays have confirmed existence of an historically defined radioactive boulder field. Prospecting by Dahrouge Geological Consulting found a 1-by-1.2-kilometre field with eight boulders grading over 1% U3O8, one of them hitting 4.28%. Eleven other samples assayed above 0.2%, with nine more below 0.2%. Also showing were anomalous values for nickel, arsenic, lead and cobalt.

Following up on historic drilling by Cameco Corp TSX:CCO-predecessor Eldorado Nuclear, the DC resistivity survey mapped one trend that ranges from near surface to about 200 metres, roughly coinciding with historic basement alteration and mineralization at 100 metres. A second resistivity trend coincides with strong radon values.

Ranking high on the project’s to-do list is a further radon survey. This year’s field work will also try to track the high-grade boulders to their source. Gibbon’s Creek sits less than three kilometres from the settlement of Stony Rapids, with power lines and highways passing through the property.

Read more about Lakeland Resources here and here.

NexGen Energy reports three mineralized holes at Rook 1

NexGen Energy TSXV:NXE released assays on January 9 for three mineralized holes found in last summer’s 13-hole, 3,032-metre program on the Rook 1 project. The widely spaced holes tested three parallel conductors along strike of the PLS discovery 2.1 kilometres southwest. Highlights show:

Hole RK-13-03

  • 0.00137% U3O8 and 0.0204% thorium over 1 metre, starting at 150 metres in downhole depth

Hole RK-13-05

  • 0.05093% U3O8 and 0.0027% thorium over 0.5 metres, starting at 220.5 metres

  • 0.07098% U3O8 and 0.0014% thorium over 0.5 metres, starting at 221 metres

  • 0.022% U3O8 and 0.00163% thorium over 0.5 metres, starting at 221.5 metres

  • 0.027% U3O8 and 0.0024% thorium over 0.5 metres, starting at 222 metres

  • 0.03796% U3O8 and 0.0025% thorium over 0.5 metres, starting at 223.5 metres

  • 0.04834% U3O8 and 0.00268% thorium over 0.5 metres, starting at 224 metres

Hole RK-13-06

  • 0.00118% U3O8 and 0.026% thorium over 0.5 metres, starting at 152 metres

  • 0.00125% U3O8 and 0.0315% thorium over 0.5 metres, starting at 153 metres

True widths were unavailable. Assays for RK-13-05 indicate “the uranium occurs almost wholly within pitchblende/uraninite and not in complex refractory minerals,” the company added. Winter drilling, scheduled to begin this month, will follow up on RK-13-05 and also target several regional anomalies interpreted from geophysical surveys and historic drilling.

In early December NexGen announced completion of airborne radiometric and magnetic surveys. Later that month the company closed a $3.11-million private placement, with funds destined for Rook 1. Still pending are assays from a nine-hole, 3,473-metre campaign at the eastern Basin Radio project, where NexGen holds a 70% option.

UEX announces winter work for western Athabasca and Black Lake projects

Along with its JV partners, UEX Corp TSX:UEX has 2014 exploration slated for its Laurie, Mirror River and Erica projects in the western Athabasca as well as Black Lake in the northern Basin, the company stated January 7.

The western Athabasca projects consist of seven or eight sites (depending which UEX info you consult) totalling 116,137 hectares and held 49.1% by UEX and 50.9% by project operator AREVA Resources Canada. UEX funds $982,000 of this year’s $2-million budget. A 2,000-metre drill campaign begins at Laurie imminently, to be followed by another 2,000 metres at Mirror. Both projects are located around the Basin’s southwestern rim. Erica, north of the other two and west of the company’s 49.1%-owned Shea Creek project, undergoes a ground tensor magnetotelluric survey starting in March.

UEX acts as operator on the 30,381-hectare Black Lake project in the Basin’s north. This year’s 3,000-metre, $650,000 drill program will be funded by Uracan Resources TSXV:URC, which has an option to earn 60% of UEX’s 89.97% portion of the project. AREVA holds the remainder. The campaign begins in late January.

Previous UEX drilling at Black Lake in 2004, 2006 and 2007 found intervals of 0.69% U3O8 over 4.4 metres, 0.5% over 3.3 metres, 0.79% over 2.82 metres and 0.67% over 3 metres.

UEX wholly owns six Basin projects and holds JVs in another eight. Resource estimates have been compiled for Shea Creek and Hidden Bay.

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Athabasca Basin and beyond

July 20th, 2013

Uranium news from Saskatchewan and elsewhere for July 13 to 19, 2013

by Greg Klein

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Step-out hole extends PLS zone by 15 metres

The first hole of Patterson Lake South’s summer program found 85.5 metres of “the most abundant off-scale mineralization of any hole drilled on the property,” stated Fission Uranium TSXV:FCU president/COO Ross McElroy. In dual announcements made July 18, Fission and 50/50 joint venture partner Alpha Minerals TSXV:AMW said scintillometer readings show the step-out extends the R390E zone 15 metres grid west. R390E is the middle of three zones along an 850-metre northeast-southwest trend.

Although its readings aren’t substitutes for assays, the scintillometer determines radioactivity by measuring gamma ray particles in counts per second, up to an off-scale reading of more than 9,999 cps. Results for PLS13-072 show:

Uranium news from Saskatchewan and elsewhere for July 13 to 19, 2013

Alpha/Fission’s $6.95-million summer drill program has begun,
with the first hole extending one zone by 15 metres.

  • <300 to >9,999 cps over 85.5 metres, starting at 62 metres in downhole depth
  • (including 1,100 to >9,999 cps over 16.5 metres)
  • (and including 5,000 to >9,999 cps over 6.9 metres)
  • (and including <300 to 8,600 cps over 5 metres)
  • (and including <300 to 720 cps over 2.5 metres).

Assays are pending. True widths weren’t available. Drilling on the hole was suspended due to mechanical failure. All PLS holes will get a radiometric probe to assess radioactivity more accurately.

Interestingly, the drill found no Devonian sandstone between the overburden and the basement bedrock, which started at 55.7 metres’ depth. “This may be a result of the RC rig casing past the overburden and bedrock contact, and so the presence or absence of Devonian sandstone is inconclusive,” stated Alpha’s news release. “Alternatively, the lack of Devonian sandstone and presence of shallower mineralization may indicate that the bedrock source of the high-grade uranium boulders is possibly approaching further to the west of PLS13-072. Other step-out drill holes may resolve this.”

The program uses two diamond rigs in addition to the reverse circulation drill. With a $6.95-million budget, the 44-hole, 11,000-metre drill campaign and ground geophysics surveys continue on the 31,000-hectare property two kilometres from Highway 955.

Fission applies for boulder-finding patent

Along with collaborator Special Projects Inc, Fission wants to patent the system used to discover the PLS high-grade uranium boulder field. Calling it “an invention entitled System and Method for Aerial Surveying or Mapping of Radioactive Deposits,” Fission announced the application on July 16.

The company explained that radiometric surveys can be affected by a number of variables including weather, topography and cosmic activity, as well as more controllable factors such as sensor height and aircraft speed. The invention “is particularly sensitive to addressing these variables,” Fission stated.

The news release didn’t specify the invention of new technology.

Forum extends Key Lake-area holdings

Towards the Athabasca Basin’s southeast corner, Forum Uranium TSXV:FDC picked up the Highrock South property, adding another 1,381 hectares to its Key Lake area holdings. The company’s July 17 announcement states the property “is a continuation of the prospective Key Lake/Black Forest conductive trend” that hosted Cameco Corp’s TSX:CCO former deposits and the geology “compares favourably” with PLS. Highrock South lies about 15 kilometres south of the world’s largest high-grade uranium mill.

Forum pays $2,500, issues 25,000 shares and grants a 2% NSR. The company holds six other projects totalling over 90,000 hectares in the area, as well as other projects in Saskatchewan and Nunavut’s Thelon Basin.

Brades moves into Athabasca Basin

Brades Resource TSXV:BRA marked its Saskatchewan entry with the Lorne Lake acquisition announced July 16. The approximately 39,450-hectare property shows “extensive regional faulting and lineaments and covers one of only three identified cross-cutting major fault structures located in the western Athabasca Basin,” as well as “favourable magnetic geophysical data,” the company stated.

In return, Brades will issue a total of 3.5 million shares to two vendors including Ryan Kalt, who will also get a 2% NSR. On closing the deal, Kalt becomes a company insider.

On July 19 Brades announced the appointment of Evany Hung as CFO, replacing Christopher Cherry. The company also holds the 14,133-hectare BRC porphyry copper-gold property in northwestern British Columbia.

Noka retains Dahrouge Geological Consulting

On July 18 Noka Resources TSXV:NX announced it retained Dahrouge Geological Consulting to manage and explore Noka’s Athabasca Basin properties. Dahrouge and its predecessor, Halferdahl & Associates, have over 40 years’ experience with mineral projects, including over 30 years in uranium, Noka stated. The announcement credited Jody Dahrouge and his team with “the conceptualization and acquisition of several uranium properties within the Athabasca Basin, most notably these include such projects as Waterbury Lake (J zone), Patterson Lake and in part Patterson Lake South.”

Noka’s properties include Clearwater and Athabasca North, as well as a 25% earn-in on the Western Athabasca Syndicate Project, a four-company strategic alliance with Skyharbour Resources TSXV:SYH, Athabasca Nuclear TSXV:ASC and Lucky Strike Resources TSXV:LKY that’s exploring the PLS-area’s largest land package.

Read more about the Western Athabasca Syndicate Project.

Paladin reports quarterly revenue of $107.4 million, record production

Paladin Energy’s TSX:PDN quarterly report, released July 16, showed sales revenue for three months ending June 30 of US$107.4 million. The company sold 2.32 million pounds of uranium oxide (U3O8) at an average price of $46.22 a pound.

Both of the company’s mines achieved quarterly production records. Langer Heinrich in Namibia produced 1.35 million pounds U3O8 while Kayelekera in Malawi gave up 789,430 pounds for a combined 2.14 million pounds, up 8% from the previous quarter. Fiscal 2013 production met guidance with 8.25 million pounds. The fiscal 2014 forecast ranges from 8.3 million to 8.7 million pounds.

The company also stated it had cut production costs by 9% at Langer Heinrich and 24% at Kayelekera, compared with June 2012. Paladin has been negotiating the sale of a minority interest in Langer Heinrich.

As for the company’s other projects, its Michelin property in Labrador has more exploration planned for summer and a resource update scheduled for next quarter. At Western Australia’s Manyingee project, work continues on an updated resource and hydrogeological modelling. Exploration on its Agadez property in Niger, however, has been suspended following the May 23 terrorist attacks that hit a military barracks and a uranium mine operated by AREVA.

In April Paladin became sole owner of the Angela project in Northern Territory, with an inferred resource of 30.8 million pounds, after buying Cameco’s 50% interest. Paladin also holds other Australian properties.

Cameco wants Canada to allow foreign ownership, Paladin concurs

Cameco “has broken ranks with the Canadian government by taking the position that Australian companies should be able to wholly own uranium mines in the country,” reported Australia’s Financial Review (subscription required) on July 15. Not surprisingly the journal added that John Borshoff, managing director/CEO of Australia’s Paladin, “says Canada must heed the words of one of its biggest companies and prioritize lifting restrictions on foreign ownership.”

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A hesitant market

September 25th, 2012

Good news leaves investors unimpressed

By Greg Klein

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Impressive drill results can do wonders for an exploration company’s stock. Or they can leave people wondering. A darling of the junior resource sector, GoldQuest Mining TSXV:GQC announced more gold results on September 25. But if a share price bump was going to happen, it didn’t happen immediately.

Here are highlights from three holes at the Romero Gold-Copper Discovery of the company’s Las Tres Palmas Trend in the Dominican Republic.

  • 2.64 grams per tonne gold (uncut) or 2.5 g/t gold (top cut) and 0.33% copper over 122.7 metres
  • (including 6.35 g/t gold (uncut) or 5.97 g/t gold (top cut) and 0.53% copper over 44 metres)
  • 0.59 g/t gold and 0.24% copper over 110 metres
  • (including 1 g/t gold and 0.32% copper over 50 metres)
  • 0.42 g/t gold and 0.74% copper over 146.5 metres
  • (including 0.54 g/t gold and 1.47% copper over 72 metres)
  • 0.53 g/t gold and 0.16% copper over 71.7 metres
Good news leaves investors unimpressed

Drill core samples from SnipGold Corp’s Bronson Slope in northwestern B.C.

An arbitrary top cut of 50 g/t gold was used pending further geostatistical data. The top cut was applied to all results, but affected only one interval. True widths were not provided. Depths extend to 476 metres.

With these results, GoldQuest has now reported assays from 10 holes at Romero. Still to come are results for five additional holes. Drilling continues.

Two years ago GoldQuest stock traded just over $0.20. Its price gradually doubled but then sunk all the way to $0.04 last May 16. But despite the market downturn, May 23 began the company’s rapid recovery. That’s when assays from the Romero Discovery first hit the market. GoldQuest shot up to an August 21 high of $2.03 before dropping back. It climbed again to $2.00 on September 20, then fell to a September 24 close of $1.83. Despite the September 25 assays, however, the stock opened the day at $1.35 before a press time close of $1.23.

GoldQuest’s closest Tres Palmas neighbour is Unigold’s TSXV:UGD 22,616-hectare flagship Candelones Project. On September 13 Unigold released assays including

  • 0.71 g/t gold, 1.2 g/t silver, 0.09% copper and 0.42% zinc over 165.65 metres
  • (including 1.38 g/t gold, 4.1 g/t silver, 0.06% copper and 1.25% zinc over 27.65 metres)
  • 0.56 g/t gold, 1.8 g/t silver, 0.06% copper and 0.08% zinc over 89 metres
  • (including 1 g/t gold, 5.1 g/t silver, 0.11% copper and 0.21% zinc over 25 metres)
  • (including 1.3 g/t gold, 2.1 g/t silver and 0.22% copper over 10 metres)
  • 0.49 g/t gold, 0.6 g/t silver, 0.07% copper and 0.01% zinc over 28 metres
  • 0.62 g/t gold, 0.5 g/t silver, 0.09% copper and 0.06% zinc over 12 metres

The company estimates intervals to be true widths. No top cut was applied. Depths extend to 476 metres.

Unigold says the results support its belief that the Candelones Extension Zone remains open in three directions. Data from 36 holes has been released so far, with assays pending for seven more from the Candelones Extension. The company states that mineralization shows a strong correlation with IP chargeability anomalies.

On September 13 Unigold also closed a $5-million private placement of 11.2 million shares at $0.45.

The little country’s biggest mining project is Pueblo Viejo, which began pouring gold on August 14. With proven and probable reserves totalling 25.3 million gold ounces, the project is a 60%-40% JV between Barrick TSX:ABX and Goldcorp TSX:G. Barrick operates the mine, which is expected to reach commercial production in Q4 this year.

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