Uranium North Homes in on Nunavut

Fledgling Uranium North Resources (UNR-V, URNMF-O) plans to spend $3 million this season to explore several projects after accumulating an extensive land package that includes both ground inherited from Diamonds North Resources (DDN-V, DDNFF-O) and new acquisitions.

Some projects will receive more attention than others. Though Vancouver-based Uranium North holds more than 16,187 sq. km in three separate uranium basins in northern Canada — Athabasca, Hornby and Thelon — the Amer Lake project in the Thelon basin of Nunavut will soak up most of the junior’s time and money in 2007.

“Amer Lake is an historic resource and something we are going to move forward with on our own,” says president and CEO Mark Kolebaba. “We base our priorities on how advanced the projects are, and if we need to partner things out, we will do that.”

Hoping to capitalize on the red hot uranium market, Diamonds North transferred about 15% of its 109,265-sq.-km land package into the namesake company after reviewing its data and recognizing uranium potential on parts of the package. Shareholders received one share of Uranium North for every six shares of Diamonds North.

Since listing on the TSX Venture Exchange in December 2006, the uranium explorer’s stock has been volatile, trading in a range of 85 to $1.90 and closing out March at $1.19 per share. The company has a market capitalization of about $21 million.

Kolebaba says Uranium North should be able to differentiate itself from the 300-plus juniors currently exploring for uranium because it holds properties that already contain resources or historic workings. He sees great potential for funding exploration through joint ventures.

“There is a huge demand for land in the uranium sector,” Kolebaba says. “If the ground has historic workings on it, it is even more valuable. We think there are lots of opportunities for partnerships as we start moving forward.”

To fund its own exploration program, Uranium North raised $7.1 million in a private placement of 9.5 million units priced at 75 per unit. Each unit consists of one common share and a half a warrant to purchase shares at 95 each until Dec. 6, 2007.

Amer Lake, where Uranium North is earning a 100% interest, contains a shallow historical resource of 6.7 million lbs. uranium grading a relatively low 0.07%. Uranium North’s priority is to bring the resource up to National Instrument 43-101 standards, while investigating higher-grade showings on the property. Kolebaba estimates that a resource of at least 20 million lbs. would be needed to make the project viable.

“There are a number of showings that have never been drilled that are in the 1% grade range,” he says. “This body is open along strike and downdip, so there are opportunities to expand the orebody as well as look at portions that may be higher grade.”

Recent grab sampling on the property returned grades of up to 0.33% U3O8 at or near the Main zone that contains the historical resource, and up to 0.89% U3O8 in boulders near the Faucon zone, about 2 km northeast. Uranium North believes the higher-grade mineralization may be structurally controlled.

Amer Lake is about 90 km northwest of Areva Resources Canada’s Kiggavik trend uranium deposits near Baker Lake, estimated to contain a combined historical resource of 131 million lbs. U3O8. Areva Resources, a subsidiary of French energy concern Areva (RVCF-O) recently opened a community relations office in the town of Baker Lake.

A decision by Areva to develop Kiggavik and build the supporting infrastructure would give Amer Lake a strategic advantage over other remote uranium deposits.

The Amer Lake drilling program is scheduled to begin in July after Uranium North has had a chance to re-log and resample the historic core. The company will also fly closely spaced electromagnetics and radiometrics over the area.

Another high-priority project is Thelon UNR, a 4,856-sq.-km property in the Northwest Territories under option to Bayswater Uranium (BAY-V, BAYFF-O). Bayswater can earn an 80% interest in Thelon UNR and other Diamonds North properties in and around the Thelon basin by spending $4 million over three years.

Last year, Bayswater flew a MegaTEM airborne survey over the area that delineated conductive targets associated with basement fault structures on the margin of the basin. This combination of structure and conductivity is a key feature of high-grade unconformity-type uranium deposits such as McArthur River and Cigar Lake in the Athabasca basin.

This year, Bayswater has budgeted $6.8 million for follow-up ground prospecting and geophysical surveys as well as airborne geophysics over areas not previously surveyed. Drill targets will be selected based on these results.

Meanwhile, Uranium North will conduct exploration on properties in the Hornby and Athabasca basins, with Toronto-based MPH Consulting providing the geological and geophysical support.

The company is also adding more ground to its portfolio, including the recent acquisition of further acreage in and around the Thelon basin. The Hawk Lake property was explored by Noranda until 1982 and contains two known mineralized zones with grades up to 0.21% U3O8 over 21 metres in drill core. Yathkyed Lake covers three showings discovered by Shell Canada (SHC-T) with grades of up to 17% U3O8 in rock samples.

Uranium North is planning a comprehensive exploration program on both properties that will include structural interpretations, airborne geophysics and prospecting.

“We targeted these showings because we think they have good opportunities to host some sort of structurally-controlled deposit,” Kolebaba says.

In the Athabasca basin, the junior has acquired property on the eastern portion of the uranium-bearing Carswell Structure, which contains the past-producing Cluff Lake Mine. The company intends to complete detailed geophysics (MegaTEM) there this year.

Another property in the Hornby basin, Hepburn, has several mineralized zones that have never been drilled. For example, grades of 2.73% and 1.67% U3O8 were reported to extend along strike for about 500 metres at the UO prospect. Hepburn is permitted and scheduled for drilling this year, if time permits.

— The author is a freelance writer specializing in mining issues, and principal of Toronto-based GeoPen Communications www.geopen.com .