UEX sees more high-grade uranium from Shea Creek (January 01, 2007)

Vancouver — Further high-grade uranium values were encountered in drilling by UEX’s (UEX-T, UEXCF-O) joint venture partner Areva Resources Canada on the Shea Creek project in the western Athabasca basin of Saskatchewan.

The final half-dozen holes of the autumn program at Shea Creek tested the Kianna deposit, returning a number of extremely high-grade intercepts.

Hole SHE-115-10 cut two “perched” uranium mineralized intervals (2.2 metres of 1.27% U3O8 and 2.3 metres 1.04% U3O8) in the sandstones starting about 60 metres above the unconformity. At the unconformity, a 5.9-metre section grading 1.27% U3O8 was encountered, followed by a 15.4-metre interval in the basement rocks averaging 9.85% U3O8. The high-grade “basement-hosted” intercept included 12.2 metres of 12.36% U3O8 and 2.8 metres of 26.17% U3O8.

Other holes drilled from pilot holes SHE-115 and SHE-118 also encountered significant uranium values in the three styles of mineralization:

* SHE-115-8 intersected 6.9 metres of 6.86% U3O8 in sandstone including a 2.1-metre interval of 20.59% U3O8. A 4.5-metre interval at the unconformity averaged 1.96% U3O8. The basement complex returned intercepts of 21.8 metres at 1.19% U3O8 with high-grade sections up to 21.14% U3O8 over 1.8 metres;

* SHE-115-9 cut 9.1 metres of 3.68% U3O8, including 0.7 metre of 20.88% U3O8, of perched sandstone-hosted mineralization. Below the unconformity, 22.2 metres of basement-hosted mineralization graded 2.44% U3O8 including a 6-metre section of 6.83% U3O8.

“Recent drilling continues to expand the Kianna deposit at multiple depths with numerous high-grade intersections, with significant expansions in high-grade, basement mineralization,” says UEX president and CEO Stephen Sorensen.

With drilling planned to resume at the Kianna deposit in early January 2007 using two rigs, Sorensen says UEX’s “immediate goal is to outline an economic resource at Shea Creek.”

Drilling intersected high-grade uranium mineralization at Kianna in multiple zones raging from depths of 662 to 922 metres, over a vertical distance of about 250 metres. Mineralization has been traced over 200 metres of strike and across a width of 150 metres, and remains open in all directions.

The program used a navigational drilling system (Navi-drilling), allowing a number of directional cuts from an initial pilot hole. The technology uses a steerable drill bit allowing several target intersections, or unconformity impacts.

Shea Creek is one of 10 western Athabasca basin projects UEX has under option from Areva Resources Canada, a subsidiary of French energy giant Areva (ARVCF-Q). Accelerating its earn-in, the junior has lodged a 24.5% interest in the project portfolio by spending $15 million in exploration so far, and can boost its interest to 49% by spending another $15 million before 2016.

Shares of UEX rallied about 10% on news of the high-grade holes, closing up 45 at $5.28 apiece on volume of 3.8 million. With 181 million shares outstanding, the company posts a $954-million market capitalization. The stock has a 52-week trading range of $2.92 to $5.46.