March/April 2014

Uranium exploration spikes in Saskatchewan

Long-term demand growth and positive initial results have juniors pouring money into the Athabasca Basin

By Peter Diekmeyer

Saskatchewan’s Athabasca Basin boasts some of the most attractive uranium deposits in the world and has seen increased exploration activity in 2013, a trend that is likely to continue for the rest of this year. While short-term uranium demand remains too low to incentivize the constructions of new mines, the longer-term outlook is far more positive, said Aaron Salz, an analyst with Dundee Capital Markets. The number of operable, under construction, planned and proposed nuclear reactors rose from 923 in 2009 to 987 as of February, according to the World Nuclear Association (WNA). As a result, WNA projects uranium demand will grow between 2.5 per cent and 4 per cent per year.

This outlook, combined with Fission Uranium Corp.’s impressive discovery in the Patterson Lake South (PLS) area in the southwest of the basin, has been the catalyst for renewed uranium exploration. “The GT (grade percentage x thickness in metres) value of 992.8 in our latest test hole is nothing less than phenomenal,” president and COO Ross McElroy said from Germany, where he and other Fission executives were shopping their projects.

The samples included a number of wide and particularly high-grade intervals. “Such broad mineralization at shallow depth with such a significant zone of off-scale radioactivity is extremely encouraging,” McElroy stated in a company release that followed the announcement of the results. Drill core samples were split in half sections on site. The first set of half-splits was sent to SRC Geoanalytical Laboratories in Saskatoon for analysis. The second set was kept on site for reference.

McElroy has more than three decades in the industry including stints at Areva, BHP Billiton and Cameco, and when the Prospectors and Developers Association of Canada presented him with the 2014 Bill Denis Award for Canadian Discovery and Prospecting Success, it was due to his efforts in leading the PLS team.

The company’s exploration team began work at the 31,039-hectare property, which is accessible by road with primary access from the all-weather Highway 955, in November 2012. After drilling an initial four holes that year, exploration spiked to 74 holes in 2013 and is slated to rise to 140 in 2014.

McElroy is confident the deposit will be relatively simple to mine: “While it is located underwater, it is relatively close to the surface, and mining under these conditions has been done before.” Much of the drilling effort this year will be directed to figuring out how the ore bodies are connected together. The idea is to get better visibility of how much uranium ore is down there, and how best to get it all out.

The Patterson discovery began a staking rush in the area and reignited uranium exploration spending in the province. Anxious to learn more about the region, a group of four juniors with more than 240,000 hectares claimed around Patterson Lake created a partnership to fund airborne surveys and ground sampling in order to locate uranium showings and potential drill targets.

NexGen, which owns the Arrow prospect as part of a portfolio of assets in the Athabasca Basin, also announced positive drilling results at the end of February, including “significant mineralization” at Arrow, which is just northeast of Fission’s PLS discovery.

Denison Mines, which bought up all of Fission’s properties but the PLS project, also has big ambitions. “The 2014 exploration plan for the Athabasca Basin is one of the largest programs undertaken by Denison in several years,” said Ron Hochstein, the company’s CEO. The Wheeler River project, a few kilometres northeast of Cameco Corporation’s Key Lake mill, will be the primary target for the company’s $15-million program, which calls for a total 60,000 metres to be drilled on 13 separate properties in the basin. In late February the company announced it had already located some “high-grade intersections” at Wheeler River.

As for Fission, according to chairman Dev Randhawa, the company’s main goal is to bring the PLS property as far as it effectively can go. However, the ultimate objective is to sell the asset to a major developer that can leverage its full value. “We prefer to concentrate on what we do best, which is finding the resource,” said Randhawa. “After that, others can take it from there.”

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