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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

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

January 19th, 2014

Uranium news from Saskatchewan and elsewhere for January 11 to 17, 2014

by Greg Klein

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Fission Uranium’s Patterson Lake South gives up more high-grade assays

More results from Fission Uranium’s TSXV:FCU Patterson Lake South show last summer’s sowing continues to reap high-grade rewards. Released January 15, the latest batch comes from two holes on the Athabasca Basin project’s R390E zone and four on the R780E zone, the third and fifth of seven zones trending northeast.

All holes were vertical or near-vertical. The R390E zone currently has a strike length of 255 metres and a lateral width of about 40 metres. Some highlights show:

Hole PLS13-102

  • 0.32% uranium oxide (U3O8) over 12.5 metres, starting at 119.5 metres in downhole depth

  • 0.58% over 9.5 metres, starting at 138 metres
  • (including 1.44% over 1 metre)

  • 0.12% over 9 metres, starting at 154 metres

  • 0.73% over 4 metres, starting at 171.5 metres

Hole PLS13-104

  • 0.13% over 12 metres, starting at 61 metres

  • 4.97% over 13 metres, starting at 99 metres
  • (including 13.2% over 4.5 metres)
  • (which includes 35.9% over 0.5 metres)

  • 0.42% over 6.5 metres, starting at 131 metres
  • (including 2.1% over 1 metre)

  • 0.22% over 17 metres, starting at 146.5 metres

Zone 780E shows a 60-metre strike and approximately 50-metre lateral width. The best assays include:

Hole PLS13-082

  • 1.25% over 41 metres, starting at 141 metres
  • (including 4.94% over 9 metres)

Hole PLS13-089

  • 0.17% over 16 metres, starting at 150 metres

  • 0.18% over 8 metres, starting at 198.5 metres

Hole PLS13-097

  • 0.99% over 48 metres, starting at 119 metres
  • (including 1.94% over 5 metres)
  • (and including 2.05% over 2.5 metres)
  • (and including 6% over 3.5 metres)

  • 0.54% over 6 metres, starting at 228.5 metres
  • (including 1.1% over 1 metre)

Hole PLS13-101

  • 0.5% over 34.5 metres, starting at 103 metres
  • (including 1.89% over 4.5 metres)

  • 0.63% over 11.5 metres, starting at 163 metres
  • (including 2.27% over 1 metre)

  • 1.04% over 17 metres, starting at 179 metres
  • (including 2.44% over 3.5 metres)

True widths were unavailable. Both zones remain open in all directions.

And the project’s potential remains open to speculation, not to mention exploration. On January 13 the company announced a new radon survey to follow up on 10 basement electromagnetic conductors. So far the technique has been used systematically on only one of the property’s over 100 basement EM conductors, Fission Uranium stated. Expected to last five or six weeks, the survey will take some 2,300 samples from three areas within Patterson Lake and a fourth within Forrest Lake, immediately south.

$50-million Uranium Participation financing bolsters commodity price confidence

In what’s been hailed as a testament of faith in uranium prices, Uranium Participation Corp TSX:U announced a $50-million private placement on January 16. “By mid-day the bought deal was complete,” reported Toll Cross Securities analyst Tom Hope.

Uranium Participation describes itself as “an investment alternative for investors interested in holding uranium.” Proceeds of the financing will be used to stockpile further purchases of U3O8 and uranium hexafluoride (UF6). Hope estimates the company will buy up to 1.28 million pounds to hold a total of about 14.7 million pounds “or approximately 9% of our estimated 2014 global mine output.”

A Denison Mines TSX:DML subsidiary manages Uranium Participation.

Declan grabs more ground north of Gibbon’s Creek

North of the company’s Gibbon’s Creek joint venture with Lakeland Resources TSXV:LK, Declan Resources TSXV:LAN has acquired the 11,100-hectare North Star property, the company announced January 17. The property “is believed to contain the northerly extensions of a number of important regional structures associated with uranium projects in the area,” Declan stated. “An interpretation of the magnetic background at Gibbon’s Creek shows a northerly trending structure which continues to the north through Lakeland Resources Ltd’s Star property, and onto the North Star property.”

The deal costs Declan $15,000 and 1.5 million shares, with a 2% gross sales royalty in effect. The previous week Declan and Lakeland reported Gibbon’s Creek boulder samples grading up to 4.28% U3O8, as well as some of the Basin’s highest-ever radon readings.

Read more about Lakeland Resources here and here.

Azincourt closes Peru property acquisitions

Uranium news from Saskatchewan and elsewhere for January 11 to 17, 2014

Along with the more advanced Macusani project, Azincourt’s newly acquired Muñani property positions the company in Peru’s emerging uranium district.

Azincourt Uranium TSXV:AAZ announced January 16 completion of its $2-million cash-and-share deal with Cameco Corp TSX:CCO and Vena Resources TSX:VEM. Coming with the advanced-stage Macusani project and the earlier-stage Muñani property, the buyout of Cameco and Vena’s Minergia S.A.C. places the purchaser prominently in Peru.

Back in Saskatchewan, Azincourt is earning into a 50/50 JV with Fission Uranium on their Patterson Lake North project. In December Azincourt closed two private placements totalling $2.5 million.

As for Vena, the deal “reactivates our investment in the uranium business,” chairman/CEO Juan Vegarra stated. The agreement allows Vena to double its Azincourt holdings within months.

Read more about Azincourt’s Peru acquisitions.

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Athabasca Basin and beyond

November 10th, 2013

Uranium news from Saskatchewan and elsewhere for November 2 to 8, 2013

by Greg Klein

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Alpha/Fission find sixth zone with 525-metre step-out west of PLS discovery

Almost exactly a year ago joint venture partners Fission Uranium TSXV:FCU and Alpha Minerals TSXV:AMW announced their Patterson Lake South discovery hole in what came to be known as zone R00E. Since then drilling from ice or barge extended east along the lake, finding five zones along a 1.23-kilometre trend. Now initial results from a $2.25-million, 11-hole, 3,700-metre land-based extension to the 2013 summer program have found a sixth zone, R600W, 525 metres west of the discovery.

The 50/50 JV bases its claim on scintillometer results—which measure gamma radiation up to 9,999 counts per second and are no substitute for lab assays—for two holes released November 4.

Hole PLS13-116 was sunk at a dip of -74 degrees, reaching 323 metres in total downhole depth, encountering basement bedrock at 106.4 metres. Results show:

  • 300 to 310 cps over 1 metre, starting at 143 metres in downhole depth

Collared from the same location but with better results, PLS13-118 went vertical to 314 metres and hit basement at 97.2 metres. The shallower depth “possibly suggest[s] structural faulted off-set between the holes,” the companies stated. Results show:

  • <300 to 680 cps over 9 metres, starting at 174.5 metres

  • <300 to 750 cps over 3 metres, starting at 186 metres

  • 314 to 5,550 cps over 8 metres, starting at 191.5 metres

  • 650 to 880 cps over 1 metre, starting at 222 metres

  • 380 cps over 0.5 metres, starting at 254.5 metres

True widths were unavailable. Assays, as well as downhole radiometric probe results, are pending.

The targets result from a radon in sediment anomaly found last summer, which “may be associated with inferred north-south cross-cutting structures. This anomaly lies along an east-northeast trend, parallel and just north of the PL-3B EM conductor,” according to the JV. The companies plan further drilling to focus on this zone, which moves activity closer to the high-grade radioactive boulder field that sparked the PLS rush.

Non-compliant quote of the week

Despite all the verifiably positive news, Alpha disregarded geological best practices and NI 43-101 disclosure rules by distributing this semantically confused whopper about PLS, courtesy of a magazine called ResourceWorld:

“No uranium resource/reserves figures have been inferred from the status of the project as yet, but it can be implied that PLS will become a standalone operation with a minimum 50 million pounds of U3O8.”

International Enexco, Denison report three holes from Bachman Lake

Four kilometres west of Cameco Corp’s TSX:CCO proposed Millennium mine in the southeastern Athabasca Basin, JV partners International Enexco TSXV:IEC and Denison Mines TSX:DML have wrapped up their 2013 Bachman Lake drill program. Three holes reported November 4 tested two of the property’s three conductors.

Uranium news from Saskatchewan and elsewhere for November 2 to 8, 2013

One hole intersected the ML-1 conductor, finding “a large graphitic shear zone in contact with granite gneiss, a favourable host for mineralization warranting additional drilling,” Enexco stated.

An intersection of the CR-2 conductor “confirm[s] that the dominant clay species is illite with some dravite, both of which are commonly elevated near unconformity-related mineralization.” The partners are considering follow-up drilling.

A sandstone alteration zone encountered by the third hole suggests “it may have just overshot the favourable conductive basement horizon.”

Now that Enexco has earned its 20% interest, both companies will fund further work on a pro-rata basis. Denison, which holds a 7.4% interest in Enexco, acts as project operator on the 11,419-hectare property. Enexco also holds a 30% interest in the Mann Lake JV 20 kilometres northeast, along with Cameco (52.5%) and AREVA Resources Canada (17.5%). In Nevada, Enexco has a pre-feasibility study underway on its 100%-held Contact copper project.

Ashburton’s Phase I exploration finds three anomalous areas at Sienna West

Disruptions by the animal kingdom notwithstanding, a radon survey on Ashburton Ventures’ TSXV:ABR Sienna West project found three anomalous areas for follow-up work. Of 35 cups that were buried to measure radon gas, eight were dug up by wildlife. But some of the others identified areas of interest, the company stated on November 4.

In addition, 12 previously reported radioactive boulders have now been analysed, with two showing 12.4 and 184.5 parts per million uranium. The latter was found in an area with high radon counts.

Ashburton also announced the resignation of director Phil Taneda.

The Sienna project comprises the 1,090-hectare Sienna West property about 40 kilometres southwest of PLS and the 147-hectare Sienna North property contiguously north of PLS.

Western Athabasca Syndicate announces winter plans for Preston Lake

With its summer field program complete, a four-company alliance prepares for winter at the PLS-proximal Preston Lake property. Work so far consisted of rock, soil, radon and biogeochemical sampling, as well as airborne electromagnetic, magnetic and radiometric surveys, the companies announced November 5. The Western Athabasca Syndicate consists of Skyharbour Resources TSXV:SYH, Athabasca Nuclear TSXV:ASC, Noka Resources TSXV:NX and Lucky Strike Resources TSXV:LKY.

Still to come are final results. But the campaign identified eight potential corridors with 15 drill target areas to be refined with ground gravity, EM and radon surveys between December and February. The companies anticipate drilling to begin in March. So far only about half of the alliance’s 246,643-hectare land package has been explored.

Energy Fuels suspends Arizona mine development, updates corporate news

Blaming litigation and low prices, Energy Fuels TSX:EFR has suspended construction of its Canyon mine in Arizona, the company announced November 5. Legal action by environmentalists and local natives challenges the U.S. Forest Service’s approval of the mine. With all surface infrastructure complete, the company has put underground development on hold until December 2014, or earlier if a court decides on the merits of the case.

According to Associated Press, low uranium prices had put the project “on standby status before, from 1992 until work resumed earlier this year.” The news agency added, “The mine sits in a nearly [404,680-hectare] area that was placed off limits to new mining claims in January 2012. Companies with existing claims that were proven to have sufficient quantity and quality of mineral resources could be developed.”

Canyon has an inferred resource of 82,800 tons averaging 0.98% for 1.63 million pounds U3O8. The deposit is part of Energy Fuels’ Arizona Strip project, acquired when the company bought out Denison’s American assets in June 2012. Canyon had been slated for production in 2015.

In another November 5 announcement rather lacking in specifics, Energy Fuels stated it had applied “to be listed on a recognized U.S. stock exchange.” The same day the company’s post-consolidation shares began trading on the TSX and OTCQX following a 1:50 reverse split agreed to the previous week. The company also changed its fiscal year-end from September 30 to December 31.

Energy Fuels supplies about 25% of American uranium production.

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Rockgate directors “reluctantly” recommend Denison offer to shareholders

October 21st, 2013

by Greg Klein | October 21, 2013

With no white knight in sight, Rockgate Capital TSX:RGT directors reluctantly recommended shareholders accept Denison Mines’ TSX:DML “unsolicited opportunistic hostile takeover bid.” The October 21 announcement came after negotiations between financial adviser Dundee Securities and potential third party bidders failed to produce a superior offer.

Denison’s bid came through suddenly on September 17, just eight days before Rockgate shareholders were to vote on a proposed merger with Mega Uranium TSX:MGA. Rockgate directors called off the vote, noted several criticisms with Denison’s offer and recommended shareholders take no action pending further study and negotiations. Denison valued its offer, 0.192 of a Denison share for each Rockgate share, at about $26.7 million, a 38% premium over the Mega offer, based on September 16 prices.

For Rockgate to be subject to an unsolicited opportunistic hostile takeover bid at this crucial stage is disappointing to say the least.—Karl Kottmeier, president/CEO
of Rockgate Capital

In a statement accompanying Rockgate’s October 21 announcement, an obviously discouraged president/CEO Karl Kottmeier recounted how the company overcame seven years of tribulation only to succumb to Denison:

Over the past seven years Rockgate has developed the Falea uranium-silver-copper deposit into a potentially world class asset. We have raised over $90 million to fund that effort, weathered poor market conditions, the Fukushima disaster, a coup d’état in Mali, and an Al Qaeda invasion and occupation of almost half of the country, yet despite these significant challenges remained focused on building the Falea asset and responsibly managing the company. For Rockgate to be subject to an unsolicited opportunistic hostile takeover bid at this crucial stage is disappointing to say the least. We had hoped that shareholders of Rockgate would receive greater value from the strong fundamentals of the Falea project and not just based on the size of Rockgate’s cash reserves.

Updated last December, Falea’s resource estimate shows:

  • a measured category of 1.39 million tonnes averaging 0.14% for 4.29 million pounds uranium oxide (U3O8)

  • an indicated category of 14.28 million tonnes averaging 0.08% for 25.29 million pounds

  • an inferred category of 15.35 million tonnes averaging 0.05% for 15.69 million pounds

Rockgate had a pre-feasibility study scheduled for January release.

Should its Rockgate proposal succeed, Denison has stated it will spin out its African assets to focus on Saskatchewan’s Athabasca Basin. In September, following a review by the Ontario Securities Commission, the company filed a new NI 43-101 to replace two previous reports for its Mutanga project in Zambia.

Rockgate also stated it would not oppose Denison’s request that the British Columbia Securities Commission impose a cease trade order on options granted to directors and senior staff. Denison had termed the options “improper defensive tactics.”

Denison’s offer remains open until October 25.

Rockgate shares opened October 21 at $0.19, half a cent above their previous close, dropped back to $0.185, rose to $0.205, then closed on $0.20. With 116.9 million shares outstanding, the market cap came to $23.38 million.

Denison opened the day at $1.03, a penny below the previous close and reached a high of $1.08 before closing on $1.07. The company had 449.93 million shares outstanding for a $481.42-million market cap.

Read more about Denison’s and Mega’s competing proposals for Rockgate.

Read more about uranium merger-and-acquisition activity.

Athabasca Basin and beyond

October 12th, 2013

Uranium news from Saskatchewan and elsewhere for October 5 to 11, 2013

by Greg Klein

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Alpha/Fission expand summer drilling, lengthen strike by 15 metres

Having mostly conducted barge drilling east of their Patterson Lake South discovery, Fission Uranium TSXV:FCU and Alpha Minerals TSXV:AMW now plan to head west with a $2.25-million, 11-hole, 3,700-metre, land-based expansion to their current campaign. The 50/50 joint venture partners will take advantage of their buoyant financing as lake conditions change with the season.

Previous drilling on the area between 360 and 860 metres west of the R00E zone showed clay alteration, anomalous radioactivity and elevated uranium results, according to the companies’ October 7 announcements. The area has also undergone electromagnetic and DC resistivity mapping, as well as a more recent RadonEx survey. The latter found anomalous radon levels north of the PL-3B EM conductor, an intriguing find since R00E zone mineralization has been situated consistently north of the same conductor.

Uranium news from Saskatchewan and elsewhere for October 5 to 11, 2013

A successful summer of exploration and financing motivated Alpha
and Fission to expand their current Patterson Lake South campaign.

In total, the expansion brings the PLS summer budget to $9.2 million, with 49 holes totalling 14,700 metres.

Two days after that announcement, the JV reported results from the opposite side of PLS, the eastern-most hole of the eastern-most zone. And while finding new superlatives for the project can’t always be easy, the partners aren’t without inspiration. This time they say scintillometer readings show “the largest accumulation of mineralized intervals in any drill hole at PLS to date.”

The results come from a hand-held device that measures drill core gamma ray particles in counts per second up to a maximum off-scale reading of over 9,999 cps. Scintillometer results are no substitute for assays, which will follow.

Drilled to a total depth of 368 metres, PLS13-099 found the basement unconformity at 59.8 metres without encountering sandstone. The results show:

  • <300 to 640 cps over 4.5 metres, starting at 101 metres in downhole depth

  • <300 to >9,999 cps over 105 metres, starting at 108.5 metres

  • <300 to >9,999 cps over 30.5 metres, starting at 222.5 metres

  • 500 to >9,999 cps over 1 metre, starting at 256.5 metres

  • <300 to 1,000 cps over 3 metres, starting at 278 metres

True widths weren’t available. With a dip of -88 degrees, downhole depths are close to vertical.

This is the fourth of four holes sunk so far in zone R945E, which parallels the PL-3B conductor and coincides with the project’s strongest radon-in-water anomaly. The hole extends the strike length by 15 metres to 1.035 kilometres.

Fission acts as project operator. The company expects to close its acquisition of Alpha as early as November 2013.

Forsys updates Namibian resources

Forsys Metals’ TSX:FSY Norasa project in Namibia moved closer to production with a resource update announced October 7. The news release provided separate cutoff grades of 0.01% for the Valencia deposit and 0.016% for the Namibplaas deposit, but combined the tonnage and contained pounds for both deposits. The resource shows:

  • a measured category of 17 million tonnes averaging 0.02% for 7 million pounds uranium oxide (U3O8)

  • an indicated category of 221 million tonnes averaging 0.019% for 96 million pounds

  • an inferred category of 50 million tonnes averaging 0.019% for 22 million pounds

Both deposits remain open along strike and at depth, the company stated.

The project has a reserve estimate scheduled for Q1 2014 release and feasibility for Q3. Assuming positive results, funding and other hurdles are cleared, the company hopes to begin construction late next year and start commercial open pit production in Q2 2016.

Fission/Azincourt find eight-kilometre conductive trend, announce plans for PLN

Along with JV partner Fission, Azincourt Uranium TSXV:AAZ announced airborne VTEM results from their PLS-adjacent Patterson Lake North project on October 8. Conductive basement rocks trending north-south for eight kilometres on the property’s northern section represent “the possible extension of the Saskatoon Lake Conductor system which hosts the Shea Creek uranium deposits,” the companies stated. Additional data is now being gathered through a ground magnetotelluric survey.

Still to come is a ground EM survey for the central part of the property to target a conductive metasedimentary belt that coincides with a structural offset at the unconformity. On the project’s southern area, another ground EM survey will follow up on a prospective trend parallel to the PLS discovery. The team has also collected 16 outcrop and 56 soil samples, and re-logged historic core.

Winter drilling will include eight to 10 holes totalling 2,500 to 3,000 metres. Fission acts as project operator with Azincourt earning a 50% interest. Highway 955 bisects the 27,408-hectare property.

Purepoint plans Hook Lake winter drill campaign

Following up on last winter’s drilling, Purepoint Uranium TSXV:PTU plans to sink more Hook Lake holes, focusing on the same conductive trend that hosts the PLS discovery about five kilometres away. EM surveying has identified three prospective structural corridors, each with multiple conductors, Purepoint added. The program will consist of about 5,000 metres with a $2.5-million budget, according to an October 8 announcement. But it wasn’t clear whether those numbers include previous work.

Purepoint holds a 21% interest in Hook Lake. JV partners Cameco Corp TSX:CCO and AREVA Resources Canada each hold 39.5%. Purepoint has interests in 10 other active Athabasca Basin projects, the company states.

Aldrin to acquire 49,275-hectare Basin property, offers $1-million private placement

Under an agreement announced October 8, Aldrin Resource TSXV:ALN will buy the 49,275-hectare Virgin property, three contiguous blocks around the Basin’s south-central rim. One of them sits adjacent to Cameco’s Centennial property. The deal has Aldrin paying $75,000 and issuing a total of five million shares to four vendors who retain a 3% NSR or, should the property produce diamonds, a 3% gross overriding royalty on the gems. A similar diamond provision was part of Aldrin’s 70% PLS-adjacent Triple M acquisition from the same vendors last April.

Aldrin also announced a private placement offering up to 10 million units at $0.10 for gross proceeds of $1 million. Each unit consists of one share and one warrant exercisable at $0.20 for a year. Proceeds will go to Triple M exploration and general working capital.

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Athabasca Basin and beyond

October 6th, 2013

Uranium news from Saskatchewan and elsewhere for September 28 to October 4, 2013

by Greg Klein

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Lakeland Resources begins Riou Lake ground campaign

Field work has begun at Lakeland Resources’ TSXV:LK Riou Lake project along the Athabasca Basin’s north-central rim. In an October 2 announcement the company outlined the agenda for its Gibbon’s Creek target, just three kilometres from the town of Stony Rapids. Initial work will consist of surface prospecting and boulder sampling, soil gas radon surveying, line-cutting and ground DC resistivity geophysics, with the goal of identifying winter drill targets.

The campaign follows eight months of preparation in which Lakeland studied a volume of previous data, director Ryan Fletcher tells “There was over $3 million of geophysics from UEX and a considerable amount of work by Eldorado Nuclear before they merged into Cameco,” he says. “We’ve been going over their information.”

There was over $3 million of geophysics from UEX and a considerable amount of work by Eldorado Nuclear before they merged into Cameco. We’ve been going over their information.—Lakeland Resources
director Ryan Fletcher

Eldorado found numerous boulders grading up to 4.9% uranium oxide (U3O8) and soil samples between five and 10 parts per million uranium, compared to background levels up to 1 ppm. Geophysics showed a gravity low measuring about three kilometres by one kilometre at the end of a conductive zone over 15 kilometres long.

Fourteen historic holes found anomalous radioactivity, geochemistry or both. With the benefit of recent modelling, assays reveal a structural co-corridor up to one kilometre long and 100 metres wide. UEX Corp TSX:UEX flew its $3-million airborne geophysics in 2005, but Lakeland is the first to bring modern ground exploration techniques to the project.

Among Gibbon’s attractions are shallow depths to the unconformity, Fletcher points out. “They’re about 50 metres to 200 metres, which means more holes for our shareholders’ money. If we get a discovery it’s more likely to be open pittable, which would mean better economics and a more strategic project for M&A. That’s what Patterson Lake South had. They went from boulder results to radon results, then they found a high-grade, near-surface discovery.”

Apart from historic data and shallow targets, Fletcher cites other cost-saving potential. “Our crews are based out of the community of Stony Rapids, just a few kilometres from Gibbon’s. A year-round highway, power and all the infrastructure for exploration are basically right adjacent to the target.”

With the program managed by Athabasca veterans Dahrouge Geological Consulting, Fletcher looks forward to a steady stream of news. “For a brand new, smaller market cap company, investors are going to start getting a lot of information from the field.”

Read more about Lakeland Resources.

Fission closes $11.25-million private placement

Uranium news from Saskatchewan and elsewhere for September 28 to October 4, 2013

An $11.25-million private placement will fund Fission’s
Patterson Lake South exploration once the Alpha acquisition closes.

Assuming all approvals fall into place, a bought-deal private placement will bring $11.25 million to Patterson Lake South’s future sole owner. On October 3 Fission Uranium TSXV:FCU reported a syndicate of underwriters led by Dundee Securities agreed to buy 7.5 million subscription receipts, exchangeable into flow-through shares, at $1.50. The deal includes an option to buy an additional 15%.

Proceeds will be held in escrow until Fission closes its acquisition of Alpha Minerals TSXV:AMW, currently a 50/50 joint venture partner in PLS, and spins out its other properties. The subscribers won’t receive shares in the spinco. The entire amount’s designated for PLS exploration.

Read more about Fission’s acquisition of Alpha.

Rockgate considers alternatives to takeover by Denison

Still studying their options following an unsolicited takeover bid from Denison Mines TSX:DML, Rockgate Capital TSX:RGT directors on October 1 urged their shareholders to take no action until further notice.

Denison offered 0.192 of its share for each Rockgate share, a proposal strong enough to defeat a previously proposed Rockgate merger with Mega Uranium TSX:MGA. Nevertheless Rockgate’s board emphasized that Denison proposed a change of control, as opposed to a “merger of equals with Mega.”

Rockgate added that “in the absence of a preliminary economic assessment or other study, mining companies are commonly valued on an enterprise value/pound U3O8 multiple.” Denison’s offer works out to “a $0.09/lb multiple which is significantly below the average multiple of $4.37/lb paid on other relevant, development uranium transactions completed post the Fukushima accident,” Rockgate stated. Since September 27 “the implied Denison offer has declined a further 11%.”

Rockgate further stated that Denison sought conditions that weren’t “subject to a materiality threshold or other objective criteria, but provide Denison with sole discretion” whether to proceed. “In addition, the minimum tender condition of 90% is very high….”

Meanwhile, Rockgate added, it’s in discussion with other potential buyers, having been unable to respond to one approach when the non-solicitation agreement with Mega was in effect.

Rockgate promised to update shareholders no later than one week before the Denison offer’s October 25 expiry date.

Read more about Mega’s and Denison’s competing offers for Rockgate.

Read more about uranium merger-and-acquisition activity.

Karoo signs LOI for three Zambian projects

Karoo Exploration TSXV:KE announced a letter of intent September 30 to acquire a portfolio of Zambian uranium properties from ASX-listed African Energy Resources. Under the deal Karoo would pay US$2 million and issue shares and warrants worth $500,000 at a share price “based on any offering completed by Karoo concurrent with this acquisition.”

The package includes the Chirundu, Kariba Valley and North Luangwa Valley projects. African Energy, which focuses on its Botswana coal assets, has a JORC-compliant resource for two Chirundu deposits with open pit potential. The Njame deposit shows:

  • a measured category of 2.7 million tonnes averaging 0.035% for 2.1 million pounds U3O8

  • an indicated category of 3.7 million tonnes averaging 0.025% for 2.1 million pounds

  • an inferred category of 6.6 million tonnes averaging 0.024% for 3.5 million pounds

The Gwabe deposit shows:

  • a measured category of 1.3 million tonnes averaging 0.024% for 700,000 pounds

  • an indicated category of 3.6 million tonnes averaging 0.031% for 2.5 million pounds

  • an inferred category of 800,000 tonnes averaging 0.018% for 300,000 pounds

Karoo holds five uranium exploration licences in southern Tanzania. The company began trading on September 4 following a reverse takeover involving United Uranium.

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Athabasca Basin and beyond

September 22nd, 2013

Uranium news from Saskatchewan and elsewhere for September 14 to 20, 2013

by Greg Klein

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Fission and Alpha sign acquisition agreement, Denison challenges Mega for Rockgate

Another burst of merger and acquisition activity hit the markets last week. Joint September 18 statements from Fission Uranium TSXV:FCU and Alpha Minerals TSXV:AMW announced a definitive agreement for the former’s acquisition of the latter. The proposed Mega Uranium TSX:MGA/Rockgate Capital TSX:RGT merger, however, took a surprising turn with Denison Mines’ TSX:DML unsolicited pitch for Rockgate. Denison’s September 17 announcement claimed a 38% premium over Mega’s offer, based on the previous day’s closing prices.

Uranium news from Saskatchewan and elsewhere for September 14 to 20, 2013

In addition to taking a run at Rockgate, Denison filed a revised
43-101 report for six deposits on its Mutanga property in Zambia.

The Fission/Alpha rationale is to put their 50/50 joint venture under a single owner, creating a company solely focused on Patterson Lake South and presumably a more attractive takeover target. Their other properties would go to two newly created spincos. Should Denison’s offer succeed, the company would spin out its African assets along with Rockgate’s advanced-stage Mali project. That would leave Denison focused on the Athabasca Basin.

Read more about these proposals and other uranium M&A news.

(Update: On September 24 Rockgate terminated its proposed merger with Mega. Read more.)

PLS assay backlog grows as Fission/Alpha release more scintillometer results

Step-out drilling confirmed strong mineralization in Patterson Lake South’s newest zone, Alpha and Fission stated on September 16. The JV partners released scintillometer readings for two new holes on zone R945E, the fourth of four zones along a 1.02-kilometre southwest-northeast trend.

The hand-held device measures drill core gamma rays in counts per second, up to an off-scale reading above 9,999 cps. The results are no substitute for assays, which are pending.

Hole PLS13-092 was collared roughly 10 metres north of existing holes. It reached a total downhole depth of 377 metres, striking the basement unconformity at 59 metres without encountering sandstone. Some highlights include:

  • <300 to 1,400 cps over 3 metres, starting at 157.5 metres in downhole depth

  • <300 to >9,999 cps over 16 metres, starting at 163 metres

  • <300 to 1,800 cps over 11 metres, starting at 192.5 metres

  • 460 to 2,500 cps over 2.5 metres, starting at 238 metres

PLS13-096 was collared about 15 metres grid west of PLS-084, replacing it as the zone’s most southwesterly hole. It found no sandstone, hit the basement unconformity at 56.5 metres and stopped at 365 metres. Highlights include:

  • <300 to >9,999 cps over 42.5 metres, starting at 135.5 metres in downhole depth

  • 310 to >9,999 cps over 11.5 metres, starting at 185.5 metres

  • <300 to >9,999 cps over 10.5 metres, starting at 235.5 metres

  • <300 to >9,999 cps over 14.5 metres, starting at 249 metres

True widths weren’t available. The two holes were drilled at -88 and -89 degree angles respectively, making downhole depths close to vertical.

The $6.95-million program calls for 44 holes totalling 11,000 metres, along with geophysics. These results bring the summer’s drilling to 27 holes totalling 8,488 metres. So far just one of the holes has had lab assays released. Scintillometer readings have been reported for 18 holes this summer.

Denison files combined resources for Mutanga property in Zambia

Denison has filed a new NI 43-101 report to replace two previous reports for its Mutanga property in Zambia, the company announced on September 16. The New Mutanga Report follows an Ontario Securities Commission review of a resource filed in March 2012 for the property’s Dibwe East deposit. The OSC declared that report non-compliant because it didn’t include all resource estimates and material information for the property as a whole. Denison’s new report incorporates information covered in a 2009 report on the Mutanga and Dibwe deposits, as well as the 2012 info for Dibwe East.

Of the project’s six deposits, only Mutanga shows measured, indicated and inferred categories. Mutanga Extension, Mutanga East, Mutanga West, Dibwe and Dibwe East have inferred pounds only. Combined, the estimate shows:

  • a measured resource of 1.88 million tonnes averaging 0.048% for 2 million pounds uranium oxide (U3O8)

  • an indicated resource of 8.4 million tonnes averaging 0.031% for 5.8 million pounds

  • inferred resources totalling 65.2 million tonnes averaging 0.029% for 41.4 million pounds

The 457.3-square-kilometre property is about 200 kilometres south of the capital city of Lusaka, near the Zimbabwean border.

The previous week, Denison updated two Athabasca Basin projects with a new resource for Waterbury Lake and more high-grade assays from Wheeler River.

Lakeland Resources options gold project to focus on Athabasca uranium

Now a pure play uranium explorer, Lakeland Resources TSXV:LK optioned a north-central Ontario gold property to New Dimension Resources TSXV:NDR, the companies announced September 16. New Dimension may earn a 70% interest in the Midas project by paying $100,000, spending $1.2 million and issuing 1.5 million shares. New Dimension must spend $300,000 on exploration by December 31.

We’re maintaining our focus on uranium, yet we’re not giving away what could turn out to be a valuable asset in the end. In our view there’s no downside to our shareholders, only a potential upside.—Roger Leschuk, corporate communications manager for Lakeland Resources

The 2,112-hectare road-accessible property has already seen ground magnetics, induced polarization and 16 drill holes that partially defined two gold-bearing zones, with 14 holes showing gold mineralization. Among the assays was 5.92 grams per tonne gold over 4.7 metres, starting at 45.7 metres in depth and including 8.88 g/t over 2.6 metres.

“We get to maintain an interest in a property that looks very encouraging to say the least,” Lakeland corporate communications manager Roger Leschuk tells “The people who are picking it up are a very good group and they see this as potentially becoming their flagship property. The great part about it for Lakeland is we retain a 30% interest all the way potentially to a new discovery. We’re maintaining our focus on uranium, yet we’re not giving away what could turn out to be a valuable asset in the end. In our view there’s no downside to our shareholders, only a potential upside.”

A fall drill program is expected to begin shortly, the companies stated.

Read more about Lakeland Resources.

Forum announces fall/winter plans for its PLS-adjacent Clearwater project

In a September 17 report, Forum Uranium TSXV:FDC updated its Clearwater project, which underwent ground radiometric prospecting, lake sediment geochemical surveys and soil radon surveys in late August and early September. The radon survey found anomalous zones immediately southwest of the adjacent PLS property, the company stated. Forum now plans further prospecting of radiometric anomalies, as well as an expanded radon survey to cover areas with electromagnetic conductors on strike with the PLS conductive trend. Autumn is scheduled for ground EM surveys and early winter for ground gravity work to identify drill targets for the 9,910-hectare property in late January.

One week earlier Forum said its private placement raised $2.59 million.

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Athabasca Basin and beyond

August 11th, 2013

Uranium news from Saskatchewan and elsewhere for August 3 to 9, 2013

by Greg Klein

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Fission/Alpha report 4 PLS holes, R00E zone still open

So far this summer, three previous step-outs have extended the middle of Patterson Lake South’s trio of zones. On August 8 Alpha Minerals TSXV:AMW and Fission Uranium TSXV:FCU released scintillometer results from four new holes in the southern-most zone, which remains open along strike and width. Along with the results came some interesting speculation about the mineralization.

The hand-held gamma-ray scintillometer readings, which are no substitute for assays, measure radiation from drill core in counts per second. Anything over 9,999 cps is off scale.

A 15-metre step-out testing the western extent of the zone, hole PLS13-074 was drilled to 203 metres in approximate vertical depth, encountering sandstone at 60.9 metres and a basement unconformity at 66 metres:

  • 550 to 1,050 cps over 1 metre, starting at 65 metres in approximate vertical depth
  • 370 cps over 1 metre, starting at 105 metres.
Uranium news from Saskatchewan and elsewhere for August 3 to 9, 2013

The other three holes tested the zone’s centre. Hole PLS13-076 was drilled to 267 metres in approximate vertical depth, encountering sandstone at 54 metres and the basement unconformity at 61.4 metres:

  • <300 to 2,700 cps over 14 metres, starting at 177.5 metres in approximate vertical depth.

Hole PLS13-077 was drilled to 259.5 metres in downhole depth, encountering sandstone at 56 metres and the basement unconformity at 61.4 metres:

  • 340 to 7,500 cps over 11.5 metres, starting at 59 metres in downhole depth
  • <300 to 4,000 cps over 15 metres, starting at 73.5 metres.

Hole PLS13-079 was drilled to 218 metres in downhole depth, encountering no sandstone but hitting the unconformity at 59 metres:

  • 340 to >9,999 cps over 18.5 metres, starting at 82.5 metres in downhole depth
  • (including 5,700 to >9,999 cps over 6.5 metres)
  • 300 to 490 cps over 2 metres, starting at 119 metres.

The 50/50 joint venture partners stated the mineralization “may have been derived from a high-energy erosion of mineralization exposed at the top of a body of basement mineralization on the floor of the Devonian sea. It does not have the characteristics of hydrothermal mineralization such as is seen in the basement mineralization elsewhere.”

Alpha’s news release added, “The Devonian cover appears to be patchy and the uranium boulders in the boulder field down ice did not show any evidence of association with Devonian sandstone lithologies. This is significant as it opens the possibility that the source of the uranium boulders may be located in a nearby window in the Devonian veneer where basement mineralization was scoured by the overriding till sheet as it was pushed towards the west-southwest by the ice. The uranium mineralization encountered to date in the three zones of high-grade mineralization was not the source of the large uranium boulder field down ice.”

The boulder train discovery, announced in summer 2011, brought assays up to 39.6% uranium oxide (U3O8). Since then drilling has attempted to find the motherlode that spawned the glacial migration.

With $6.95 million to spend, the partners continue their 44-hole, 11,000-metre drilling and ground geophysics campaign. Fission acts as project operator until April 2014, when it swaps with Alpha.

UEX releases Shea Creek drill results, updates Douglas River and Hidden Bay

UEX Corp TSX:UEX announced the first five holes from Shea Creek’s summer program on August 6 and also provided updates about its Douglas River and Hidden Bay projects.

Results came from downhole probes measuring gamma radiation, with two holes in the Kianna East zone finding basement mineralization. Hole SHE-142 was drilled to a total downhole depth of 1,056 metres, reaching the unconformity at 726.5 metres:

  • 0.2% uranium oxide-equivalent (eU3O8) over 3.4 metres, starting at 885.3 metres in downhole depth
  • (including 0.35% over 1.2 metres)
  • 0.34% over 2.9 metres, starting at 907.9 metres
  • 0.85% over 22.3 metres, starting at 915.2 metres
  • (including 1.14% over 8.8 metres)
  • (which includes 5.93% over 1.4 metres).

Hole SHE-142-1 reached 1,083 metres in downhole depth, striking the unconformity at 727.4 metres:

  • 0.23% over 1.6 metres, starting at 939.4 metres.

True widths were unavailable. Hole SHE-142 expands the zone approximately 15 metres east of the previously reported SHE-118-24 that found 1.55% eU3O8 over 19.9 metres starting at 943.7 metres, the company stated. Mineralization remains open east and southeast of SHE-142. Hole SHE-142-1 stepped out approximately 35 metres north of SHE-118-24.

Three holes sunk in the Anne South zone to test a prospective conductor found no significant results. UEX holds a 49% interest in the Shea Creek JV, in which AREVA Resources Canada acts as project operator. The companies have now incorporated their 49%/51% Douglas River JV into the Shea Creek project, saying mineralization extends from Shea Creek’s northern boundary into the contiguous Douglas River property. Shea Creek sits about nine kilometres south of the former Cluff Lake mine, a 22-year operation that produced over 64 million pounds of U3O8.

The Athabasca Basin’s third-largest resource after Cameco Corp’s TSX:CCO McArthur River and Cigar Lake, Shea Creek’s April update showed:

  • an indicated category of 2.07 million tonnes averaging 1.48% for 67.66 million pounds U3O8
  • an inferred category of 1.27 million tonnes averaging 1.01% for 28.19 million pounds.

UEX also announced it has shelved its 100%-held Hidden Bay project until spot and long-term uranium prices pick up. In February 2011 the company issued a preliminary economic assessment for the eastside Basin property’s Horseshoe and Raven deposits.

Western Athabasca Syndicate begins PLS-area fieldwork ahead of schedule

Backed by a four-company strategic alliance, fieldwork has begun on the PLS-area’s largest land package. On August 8 Skyharbour Resources TSXV:SYH, Athabasca Nuclear TSXV:ASC, Lucky Strike Resources TSXV:LKY and Noka Resources TSXV:NX announced completion of VTEM plus and radiometric surveys over their Western Athabasca Syndicate Project. After an initial review the companies decided on immediate follow-up work.

The package totals 287,130 hectares, with 275,361 hectares in the vicinity of the Fission/Alpha near-surface, high-grade discovery. On reviewing early survey data, the alliance expanded the survey for a total of 4,840 line-kilometres of VTEM plus and 4,400 line-kilometres of radiometrics to search for conductive anomalies, boulder trains and in-situ mineralization. The surveys focused on the syndicate’s Preston Lake property just south, southeast and west of PLS.

“Originally we were planning on having a field crew up there later in August,” Skyharbour president/CEO Jordan Trimble tells “Now we’ve decided to send them up this weekend because we’re very, very encouraged with what we’ve seen initially.”

One area of Preston Lake especially caught their attention. “There were quite a few targets but this one really lit up,” Trimble says. “So we made the decision to expedite the program and begin the fieldwork immediately. We’ll be employing the same techniques that worked for Alpha and Fission.”

While geophysicist Phil Robertshaw works out a more detailed interpretation of the airborne surveys, ground work will consist of water and soil radon sampling, biogeochemistry, lake sediment and soil sampling, prospecting and scintillometer surveying.

“By the end of September or early October we’ll have spent $1.5 million, with each company contributing towards its 25% earn-in. The four companies with their respective geological teams are working harmoniously on this,” he adds.

“We’re now focused on the northern part of Preston Lake, but we have a large land package. As a four-company syndicate we have more ability to finance and explore. There’s certainly a lot of blue sky potential elsewhere on our properties.”

The current phase should last until early October, he explains. “Then we’ll decide what to do in the fall. There’s still a lot of work that can be done that time of year. Obviously we don’t want to drill just anywhere but if we can get definitive drill targets by then, winter would be the ideal time to drill. The earlier we can get these targets, the better. And that’s the goal.”

Combined, the four companies have agreed to fund $6 million of exploration over two years. Athabasca Nuclear acts as project operator.

Read more about the Western Athabasca Syndicate.

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Uranium consolidation

January 16th, 2013

Fission likes Denison’s offer, wants to “do it all again” in Saskatchewan’s Athabasca Basin

by Greg Klein

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(Update: The spin-out company Fission Uranium Corp TSXV:FCU began trading on April 30, 2013.)

Uranium M&A activity continues with Denison Mines’ TSX:DML move to acquire Fission Energy TSXV:FIS. Both companies back the plan, which would help Denison consolidate its position in Saskatchewan’s Athabasca Basin. Meanwhile Fission management would move into an aggressively “lean and hungry”—but well-financed—spinoff.

A helicopter lands at Waterbury Lake. Under part of the proposal, Denison Mines would get Fission Energy’s 60% stake in the 40,256-hectare uranium project.

A helicopter lands at Waterbury Lake. Under part of the proposal,
Denison Mines would get Fission Energy’s 60% stake in the
40,256-hectare uranium project.

Under the binding letter of intent announced January 16, Denison would get Fission’s 60% interest in the Waterbury Lake uranium project. Fission’s other focal point, its 50% stake in the Patterson Lake South uranium project, would spin out to a new company headed by the Fission team. The deal, which values Fission at $70 million, would offer 0.355 Denison shares for each Fission share. As a result, Fission shareholders would own about 11% of Denison as well as a proportional interest in the newly formed company.

The parties expect consummation by April. The LOI includes a reciprocal break fee of $3.5 million.

Patterson Lake South, located in the western Athabasca Basin, is currently a 50/50 joint venture between Fission and Alpha Minerals TSXV:AMW. The high-grade, near-surface project has seen a steady stream of encouraging results since its discovery last fall.

In the eastern basin, Fission holds a 60% interest and 2% NSR in Waterbury Lake. A consortium led by the Korean power utility Kepco holds the remaining 40%. Waterbury’s J-Zone is an extension of the Roughrider deposit, which Rio Tinto bought from Hathor Exploration last year for $654 million. Cameco’s TSX:CCO McArthur River and Rabbit Lake mines, as well as its Millennium deposit, lie on the same trend.

Denison would also pick up the rest of Fission’s eastern basin assets, a few more in Quebec and Nunavut, and Fission’s share of two JVs in Namibia.

Denison already commands a strong position in the eastern basin, with 26 projects covering over 330,000 hectares. Included is Denison’s 60% interest in Wheeler River, a JV in which Cameco and JCU Exploration hold 30% and 10% respectively. Also in the eastern basin, Denison holds a 25.17% interest in the Midwest high-grade uranium deposits and a 22.5% stake in the McClean Lake near-surface deposits and mill, one of the world’s largest uranium processing plants.

Last November Denison acquired 13.9% of International Enexco TSXV:IEC, whose assets include Athabasca’s Mann Lake project, a JV in which Cameco holds 52.5% and AREVA 17.5%. Other Denison assets are located in Mongolia and Zambia.

Speaking to ResourceClips, Fission chairman/CEO Dev Randhawa says, “I think Denison’s corporate strategy is to be a dominant player like Cameco and Rio, so they acquired [JNR Resources TSXV:JNN] last fall and now they’re acquiring our asset next to Rio, which is just north of Denison’s Midwest project.”

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