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Athabasca Basin and beyond

February 1st, 2014

Uranium news from Saskatchewan and elsewhere for January 25 to 31, 2014

by Greg Klein

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Fission envisions possibility of “one very large zone” at Patterson Lake South

Ever in search of new superlatives for Patterson Lake South, Fission Uranium TSXV:FCU claims its best hole yet for total composite (not continuous) off-scale scintillometer readings. The company released results on January 27 for the first five holes of winter drilling, which it said narrowed the gaps between high-grade zones R390E and R945E, the third to sixth of seven zones along a 1.78-kilometre strike. All five holes produced off-scale readings, prompting company president/COO and chief geologist Ross McElroy to say the news provides “further evidence that the system consists of one very large zone.”

Uranium news from Saskatchewan and elsewhere for January 25 to 31, 2014

Week one of winter work has given Fission a superlative start.

The hand-held scintillometer measures gamma ray particles in drill core up to a maximum off-scale reading above 9,999 counts per second. Scintillometer results are no substitute for assays, which will likely follow in weeks or months.

Among the best holes, PLS14-129 showed a continuous 9.5 metres above 9,999 cps, among a total of 36.72 metres of off-scale results. Total mineralization came to 111.5 metres between downhole depths of 56 metres and 268 metres.

PLS14-126 showed 3.09 metres of composite off-scale radioactivity within 64.5 metres of composite mineralization between depths of 131 metres and 374 metres.

PLS14-125 showed 1.96 metres of composite off-scale radioactivity within 88 metres of composite mineralization between depths of 70 metres and 240.5 metres.

One week earlier the company announced the start of its winter campaign, in which five rigs will drill 30,000 metres in 90 holes, most of them in effort to connect five high-grade zones. Along with geophysics, the current program will use up about $12 million of this year’s $20-million budget.

Cameco’s $450-million cash infusion excites acquisition anticipation

Cameco Corp’s TSX:CCO $450-million asset sale could have implications for Athabasca Basin juniors. On January 31 the uranium giant announced an agreement to sell its 31.6% interest in Bruce Power to Borealis Infrastructure, a branch of the Ontario Municipal Employees pension fund. Bruce Power operates Candu reactors at a 930-hectare site on Lake Huron capable of generating 6,300 megawatts. The sale will allow Cameco to “continue to reinvest in our core uranium business where we see strong potential for growth,” according to president/CEO Tim Gitzel.

Fission Uranium chairman/CEO Dev Randhawa told Bloomberg the sale “certainly gives Cameco a war chest to go after some names and we’re very happy to hear that.” Randhawa’s recently restructured company comprises the Basin’s most likely takeover target. A maiden resource from its closely watched project is expected this year.

Reuters, on the other hand, said Gitzel is “in no rush” to spend the loot. “We’ve got significant uranium pounds under our control and we’re just waiting for the market to improve,” the news agency quoted him. “As the uranium market improves as we believe it will over the next period of time—years, I would say—we want to be ready.”

According to the Financial Post, BMO Capital Markets analyst Edward Sterck “noted that Cameco had more than enough liquidity to cover its uranium growth plans before this deal. But this gives it greater flexibility to grow as uranium demand rises in the future.”

On the other hand a tax dispute could cost Cameco up to $850 million, plus interest and penalties.

Although the sale’s effective date was December 31, 2013, the deal remains subject to waiver of the right of first offer held by three other Bruce Power partners.

Purepoint announces drilling at Hook Lake JV; issues new and reprices old options

A $2.5-million, two-rig, 5,000-metre campaign has begun at Purepoint Uranium’s TSXV:PTU Hook Lake project. Of three prospective corridors on the 28,683-hectare property, drilling will focus on the same electromagnetic trend that hosts the PLS discovery five kilometres southwest, the company stated on January 30.

With a 21% interest in Hook Lake, Purepoint acts as project operator in joint venture with Cameco and AREVA Resources Canada, which hold 39.5% each.

On January 30 Purepoint also announced 2.51 million options to insiders at $0.075 for five years. The following day the company stated 1.94 million options granted last April would be repriced from $0.10 to $0.07.

In November Purepoint announced winter drilling plans for Red Willow, a 25,612-hectare project on the Basin’s eastern rim. Rio Tinto NYE:RIO acts as operator under an option to earn 51% by spending $5 million before the end of 2015.

International Enexco announces drilling at Mann Lake JV

Another Cameco/AREVA JV partner, International Enexco TSXV:IEC announced January 27 that a $2.9-million program has begun on the eastern Basin’s Mann Lake property. Up to 18 holes and 13,000 metres will test three types of targets—a footwall to the western axis of the property’s main C trend, conductive features near the western margin of the Wollaston sedimentary corridor and the remaining undrilled C trend targets, Enexco reported on January 27.

Cameco, with a 52.5% interest in the 3,407-hectare property, acts as operator. Enexco and AREVA hold 30% and 17.5% respectively. Enexco’s share of the $2.9 million amounts to $870,000, most of which comes from a $750,000 private placement that closed in December. The company also has a 20%/80% JV with Denison Mines TSX:DML on the southeastern Basin’s Bachman Lake project. Denison owns 7.4% of Enexco, which is also pursuing pre-feasibility at its wholly owned Contact copper project in Nevada.

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Athabasca Basin and beyond

August 4th, 2013

Uranium news from Saskatchewan and elsewhere for July 27 to August 2, 2013

by Greg Klein

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Alpha/Fission extend Patterson Lake South R390E zone by 30 metres

Just two weeks ago they were crowing about “the most abundant off-scale mineralization of any hole” at Patterson Lake South. Now Fission Uranium TSXV:FCU and 50/50 joint venture partner Alpha Minerals TSXV:AMW say they’ve surpassed that. Scintillometer readings for one of two shallow step-outs reported July 29 represent “the largest accumulation of discrete off-scale mineralized intervals in any drill hole at PLS to date.” The two holes add 30 metres of strike to R390E, the middle of three zones along an 850-metre northeast-southwest trend. Including the 15-metre extension resulting from the hole announced July 18, the campaign’s first three holes have extended the zone’s strike by 75% to 105 metres.

The scintillometer measures gamma radiation from drill core in counts per second, up to an off-scale reading over 9,999 cps. Scintillometer readings are not assays, which are still pending. A radiometric probe will also be used to measure downhole radiation.

Hole PLS13-073, 15 metres grid east of the zone’s nearest hole, showed:

  • <300 to >9,999 cps over 19.5 metres, starting at 102 metres in vertical depth
  • <300 to >9,999 cps over 11 metres, starting at 142.5 metres.

True widths weren’t available. Drilled to a depth of 248 metres, the hole encountered Devonian sandstone at 50 metres’ depth and a basement unconformity at 53 metres.

Hole PLS13-075, 15 metres grid west of the nearest hole, showed:

  • <300 to >9,999 cps over 70 metres, starting at 57.5 metres in vertical depth
  • (including 580 to >9,999 cps over 23 metres)
  • <300 to 6,800 cps over 12 metres, starting at 130 metres
  • <300 to >9,999 cps over 2.5 metres, starting at 146.5 metres
  • 400 to 1,800 cps over 2 metres, starting at 151 metres
  • 1,000 cps over 0.5 metres, starting at 157 metres
  • <300 to 3,600 cps over 2.5 metres, starting at 160 metres.
Uranium news from Saskatchewan and elsewhere

Again, true widths were unknown. The 188-metre hole struck sandstone at 47 metres and the basement unconformity at 49.3 metres. The first PLS13-075 result above included 21.65 metres of mineralization over 9,999 cps in several intervals, which the JV partners call the project’s “largest accumulation of discrete off-scale mineralized intervals” so far. They include 16.7 metres of continuous off-scale readings starting at 73.5 metres’ depth. Although Alpha and Fission anticipate that its main zone of mineralization has been found, drilling on this hole continues.

As does the $6.95-million program, comprising ground geophysics and about 44 holes totalling 11,000 metres.

Paladin cancels sale; reports $180-million impairment, $81-million placement, fatality

Paladin Energy TSX:PDN has dropped negotiations to sell a minority interest in its Langer Heinrich mine in Namibia. In one of three August 2 announcements, the company said uranium’s currently low price would drive down offers on an asset with expansion potential and a mine life of over 20 years.

Paladin also reported it expects a further non-cash impairment estimated at US$180 million before taxes, which the company attributed to its Kayelekera mine in Malawi, Niger exploration projects “and other smaller items.” Paladin suspended work in Niger following May 23 terrorist attacks.

Within minutes of reporting the suspended sale Paladin announced it was offering a private placement “to provide adequate funding for the company into the September quarter” despite low uranium prices. Later the same day Paladin announced it closed the placement at $C81 million. The money came from 125.6 million shares, representing 15% of the company’s existing issued capital, at a 30% discount to the stock’s previous ASX close.

Paladin managing director/CEO John Borshoff said the money would help “reduce debt in the mid-term.”

On July 31 the company reported a fatal accident in Kayelekera’s engineering workshop.

Read about Paladin’s last quarterly report.

Powertech forms strategic alliance with Asian uranium investor

A Vancouver-headquartered company with uranium projects in three American states announced a strategic alliance with Asia’s “only significant uranium investment and development vehicle.” On August 1 Powertech Uranium TSX:PWE reported Azarga Resources Ltd, a privately held Hong Kong-based company, agreed to a number of deals.

As of July 22 Azarga bought 24.65 million shares at $0.07 for a total of $1.72 million, giving the purchaser an initial 17.5% of Powertech. Azarga also provided Powertech with $514,350 in return for a debenture with the amount payable at 115% within 12 months or 130% within two years. Powertech may instead convert the principal into shares granted to Azarga at $0.07. Full conversion would leave Azarga with an approximate 22% interest in Powertech.

Azarga also agreed to buy a 60% chunk of Powertech’s Centennial project in Colorado for $1.5 million over two years. Should shareholders oppose the purchase, $1 million of the purchase price would be converted to a debenture on the same terms as the other. On completing the 60% purchase, the two companies would form a JV with Azarga acting as project operator.

The deal would include a put option, in which Powertech could sell its remaining 40% after January 1, 2017, for $250,000, and a call option, allowing Azarga to buy the 40% after that date for $7 million or, within 10 days of a change of control at Powertech, for $1 million.

The companies further agreed to share data and expertise, with Azarga using “its best efforts to support any equity financings” undertaken by Powertech. In a statement accompanying the announcement, Powertech president/CEO Richard Clement said Azarga’s “positioning in Asia will provide enhanced access and exposure to those markets.”

The transactions are subject to shareholder and TSX approval.

Powertech released a preliminary economic assessment for an in-situ recovery (ISR) mine at Centennial in August 2010. Following local opposition, Colorado imposed new restrictions on uranium mining the following month. Powertech lost its court challenge against the new regulations in July 2012. By that time the company had already shifted focus to its Dewey-Burdock project in South Dakota, for which it released a revised PEA in April 2012. The project is now undergoing permitting and licensing with the United States Nuclear Regulatory Commission. Powertech has two other uranium projects in Wyoming.

Azarga stated it currently has no plans to develop Centennial but will instead review the project’s exploration and development potential. Azarga also holds an 80% operating interest in “the largest-known Soviet-era resource in the Kyrgyz Republic,” as well as interests in other uranium projects in the U.S. and Turkey.

Forum begins airborne radiometrics over PLS-adjacent Clearwater project

On July 30 Forum Uranium TSXV:FDC announced airborne radiometrics had begun over its Clearwater project, adjacently southwest of Alpha/Fission’s PLS property. The survey consists of 1,463 line-kilometres at 100-metre spacing over the 99-square-kilometre property to measure surface radioactivity in outcrops or boulder trains using a proprietary system of Goldak Airborne Surveys. Forum says preliminary interpretation of its magnetic and electromagnetic survey suggests one of Clearwater’s conductors hosts the PLS discovery.

On further scrutinizing the airborne surveys, the company will begin prospecting, radon surveys and lake sediment geochemical sampling this month. Ground geophysics might also be used to identify drill targets.

In a collaborative effort, the surveys have also been covering PLS-area properties held by Aldrin Resource TSXV:ALN and the Western Athabasca Syndicate. The latter is a four-company strategic alliance consisting of Skyharbour Resources TSXV:SYH, Athabasca Nuclear TSXV:ASC, Lucky Strike Resources TSXV:LKY and Noka Resources TSXV:NX, which are jointly exploring a 275,361-hectare land package in the vicinity of the Fission/Alpha discovery. On July 23 the syndicate announced an extension of its portion of the surveys.

Earlier in July, Forum announced it extended the company’s Key Lake-area holdings in the Athabasca Basin’s southeast corner.

Ur-Energy begins Lost Creek production in Wyoming

Ur-Energy TSX:URE began mining its Lost Creek operation on August 2. The ISR project in Wyoming’s Great Divide Basin took eight years and US$95 million to develop and should, according to an April 2012 PEA, produce about 7.38 million pounds uranium oxide (U3O8) over 14 years. The 2012 numbers assumed uranium prices ranging from $55 to $80 a pound, substantially higher than the current seven-year low of $34.50. But with those numbers the PEA used an 8% discount rate to calculate a pre-tax net present value of $181 million and an 87% internal rate of return.

Ur-Energy says it holds long-term contracts with several U.S.-based utilities and will begin deliveries in Q4.

On July 30 the company reported filing its Q2 report on sedar.com.

Cameco reports Q2 results, makes company and commodity forecasts

Cameco Corp’s TSX:CCO Q2 report came out August 1, with the company reporting $421 million in revenue, 49% above the same period last year and a $99-million gross profit, up 98%. Net earnings attributable to equity holders came to $34 million or $0.09 a share. Adjusted net earnings were $61 million or $0.15 a share.

Cameco president/CEO Tim Gitzel addressed a conference call, speaking optimistically about Cigar Lake’s imminent start-up, a planned 50% production increase and future uranium prices.

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Mineral Mountain director/VP of corporate development Brad Baker on South Dakota’s Holy Terror gold project and its eight former mines

March 22nd, 2013

…Read More

Their legacy lives on

March 14th, 2013

Mineral Mountain believes South Dakota’s past-producers have more gold to offer

by Greg Klein

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South Dakota’s Holy Terror project comes with eight past-producing mines and lots of history. Mineral Mountain Resources TSXV:MMV, on the other hand, is a newcomer to the property. But after assembling the land package last year, the company believes it has potential far beyond previous operations. Phase II drilling, with both infill holes and down-dip expansion, brought more high grades in gold assays released March 14. Highlights include:

Mineral Mountain believes South Dakota’s past-producers have more gold to offer

Drilling shows South Dakota’s gold rush
history left yellow metal unearthed.

  • 4.1 grams per tonne gold over 12.19 metres
  • 10.36 g/t over 3.93 metres
  • 4.84 g/t over 9.49 metres
  • (including 10 g/t over 3.2 metres)
  • 5.11 g/t over 4 metres
  • 3.95 g/t over 5.08 metres
  • 8.39 g/t over 2.03 metres
  • 4.78 g/t over 3.76 metres
  • 1.41 g/t over 13.09 metres
  • (including 2.81 g/t over 4.95 metres)
  • 4.1 g/t over 4.29 metres
  • (including 6.27 g/t over 2.37 metres).

True widths weren’t provided. The interval closest to surface began at a down-hole depth of 46 metres while the deepest ended at 231 metres down hole.

The March 14 results come from 16 holes totalling 2,698 metres at the project’s former Bismarck mine area. Still pending are assays for two more holes, 200 metres and 500 metres southeast, at two other former mines. Phase I, which wrapped up late last year, tested Bismarck as well as three other mines with both exploration drilling and confirmation of historic work dating to the 1980s and ’90s.

“There are approximately 100 historic, non-43-101 holes on the property, so we had tremendous confidence coming in,” Mineral Mountain director/VP of corporate development Brad Baker tells ResourceClips. “Our drilling has supported that confidence and our theory that these deposits could run much deeper than ever previously known. The past mining was shallow. We believe these deposits can be very deep-seated, akin to the Homestake mine along that belt.”

Located 55 kilometres northwest of Holy Terror, Homestake produced about 40 million gold ounces before its 2002 shutdown. Mineral Mountain moved into the neighbourhood last May when it optioned 75% of a property with the privately held Holy Terror Mining Co. Through purchase and claim-staking, the partners have since expanded the property to a 1,600-hectare package comprising eight past-producers.

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