Fipke’s Northern Uranium thinks outside the basin

VANCOUVER — Conventional thinking amongst Canadian uranium explorers has been shifting over the past few years, and Northern Uranium (TSXV: UNO; US-OTC: NOURF) is hoping to be the next outfit to make a world-class discovery outside Saskatchewan’s prolific Athabasca basin.

The company has optioned a 1,436 sq. km property package in northwestern Manitoba along the extension of the Mudjatik Wollaston tectonic zone, which hosts most of the major uranium deposits within the Athabasca basin, including Cameco’s (TSX: CCO; NYSE: CCJ) McArthur River and Cigar Lake mines. Though the project is not underlain by basin sediments, Northern Uranium is theorizing that extensive glaciation may have stripped the sediments away and left the basement rocks exposed.

That was the theory underpinning US$8-million worth of target generation and prospecting work done by previous operator CanAlaska Uranium (TSXV: CVV), and it was enough to draw the attention of Northern Uranium president and CEO Chad Ulansky and diamond magnate Charles “Chuck” Fipke, who recently sold his stake in the Ekati diamond mine for US$67 million.

Northern Uranium can grab up to an 80% interest in the Northwest Manitoba project from CanAlaska via an $11.6-million, three-stage earn-in agreement. The company would acquire 50% of the property by spending $3.2 million on exploration and issuing 4.5 million shares by year-end. It can earn a 70% interest by spending $2.8 million and issuing 2.5 million shares within two years, and earn 80% by spending $5.6 million and issuing 5 million shares within four years.

“This is actually one of the very, very rare occasions where Chuck and I got involved inadvertently. We put some seed money into financing to facilitate the project coming into a shell, and we weren’t really envisioning taking on a management role,” Ulansky says during an interview.

“When we were initially presented with the data we were surprised with how promising the results looked despite the fact the property is a fair way outside the current extent of the Athabasca basin. But the prior work really pointed to the fact that there is definitely high-grade uranium mineralization within that claim block, and there could be something world-class that’s right at surface,” he adds.

The past work includes a traditional collection of exploration techniques familiar to Athabasca explorers looking for unconformity-style uranium deposits, which form as fluids and come into contact with reducing conditions, resulting in the precipitation of uranium.

Typical deposits within the Athabasca basin occur within the unconformity between the overlying sandstone sediments and basements rocks at depth. Ulanksy says that Northern Uranium is postulating that glaciation occurred after the sandstone sediments were deposited, which stripped off a lot of the softer sandstone and left behind the more resistant basement rock.

Past work identified a prospective area called “Maguire Lake,” which was defined via airborne magnetic, electromagnetic and radiometric surveys, as well as detailed prospecting and ground-gravity surveys.

The airborne magnetic survey outlined numerous faults in the project area, while airborne electromagnetic surveying defined a long-linear conductor, which could represent a graphitic unit. In terms of surface prospecting, grab samples of in-situ mineralization have run up to 9.5% uranium oxide (U3O8), while boulders have contained in excess of 65% U3O8.

After Northern Uranium took over the project last September it completed radon surveys over a 10 by 3 km focus area at Maguire Lake, which helped shore up the company’s drill targets. Northern Uranium reported RadonEx results that are the second-highest results ever recorded — only Fission Uranium’s (TSXV: FCU; US-OTC: FCUUF) Patterson Lake South values were higher.

“It’s a great way to explore because the high radon results, in many cases, are parallel or sub-parallel to the electromagnetic conductor along some of the magnetic interpreted faults, and also coincide nicely with the ground-gravity results we’ve received,” Ulansky continues. “You can really see that the gravity lows coincide with the radon highs, which is important because the fluids that will have had the uranium precipitate out of them also alter the surrounding rocks.”

Northern Uranium is hoping to increase its drill-target precision by bringing in a rotary air-blast drill and on-site analytical laboratory to assess basal till and bedrock samples. Ulansky explains that the company can analyze for both young uranium and the rest of the products present in the uranium-decay sequence, with samples from the till and bedrock illustrating radon sources.

“Chuck and I often end up doing things a bit differently, so we looked at what other players have done in the uranium industry previously, and what sort of challenges they’ve faced,” Ulansky says. “One of the great things about the business is the radon gas, because it helps you pinpoint mineralization, but unfortunately it’s often over a large potential area, so you’re not exactly sure of drill targets because its a bit more amorphous than a diamond or gold deposit.”

The company has spent nearly US$2 million at Northwest Manitoba since sealing the option 11 months ago, and had hoped to finish 4,000 metres of core drilling before a number of holes failed in overburden late in the field season.

Ulansky says Northern Uranium has “40 promising drill targets” and planned to complete 40 holes over 20 of those targets during its program. Northern Uranium is aiming to raise between US$1.5 million and US$2 million in flow-through and non-flow-through shares so that it can wrap up its earn-in requirements and get the drills turning by year-end.

“Uranium seems to be one of the commodities that is generating excitement,” Ulansky says. “I think in part because of Fission’s success investors have realized that despite a lower commodity price, a major discovery can still dramatically affect your market capitalization. Fission took a bit of a step out from classic thinking by moving outside of the Athabasca basin sediment extent, and they applied some of the same exploration techniques we plan to continue to apply on our ground.”

Northern Uranium has traded within a 52-week range of 2¢ to $1, and closed at 10¢ per share on 350,000 shares traded at press time.

Northern Uranium has US$400,000 in its treasury and 45 million shares outstanding for a $4.3-million market capitalization. Fipke is an advisor and holds a 20% equity stake in the company.