Vancouver – Formation Capital (FCO-T, FCACF-O) got welcomed news from project partner and operator Cameco (CCO-T, CCJ-N) from drilling on the Virgin River uranium joint venture in northern Saskatchewan’s Athabasca Basin.
Results from last summer’s drilling on the Centennial zone returned the highest grades and thicknesses yet encountered at the project. Wedged hole VR-22W2 intersected 19.2 metres (from 781 metres downhole depth) averaging 2.48% U3O8 including a 5.3-metre interval of 5.35% U3O8. Grades as high as 18.3% U3O8 were measured in the mineralized section.
The summer 2006 program consisted of four wedge holes and three pilot holes totaling just over 4,600 metres following up previous intersections of high-grade uranium mineralization encountered in the unconformity-type environment.
Formation Capital cites Cameco describing the Centennial zone intersections as “most significant ever encountered along the entire Dufferin – Virgin River Trend in more than 25 years of exploration.”
The zone has been traced over a strike length of about 450 metres, and remains open in both directions along strike, and across a width of at least 12 metres.
Through its wholly owned subsidiary Coronation Mines, Formation Capital holds a 2% interest in the joint venture with a right of first refusal to increase to 10%. It is also carried on the first $10 million of exploration and development expenditures.
The remaining 98% interest is held by UEM, which is jointly owned by Cameco and Areva‘s (ARVCF-O) subsidiary Areva Resources Canada.
Based on the encouraging results, the joint venture partners have boosted the project’s 2007 budget to $3.3 million.
Despite holding just a 2% interest in the project, shares of Formation Capital rallied as much as 35% on the news before settling to close up about a dime at the 60-level on more than 12 million shares of volume.
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