Cash-rich Purepoint boasts strong balance sheet

Purepoint Uranium (PTU-V) is perched on a mountain of cash $11.5 million to be precise — more than enough to support exploration until the end of next year, its management says.

All of our cash is sitting in risk-free GICs at CIBC — safe from the woes of the current market issues, the uranium explorers chief executive officer, Chris Frostad, told The Northern Miner.

Our large cash balance means we can delay additional financings until the markets are more attractive without slowing down our exploration progress.

Purepoint has invested over $8 million in the exploration of its properties in the uranium-rich Athabasca basin. That is a lot by any standard, Frostad says.

In addition, he notes, Purepoint has created financial efficiencies that will continue to pay dividends over the next few years.

As evidence, he points to the companys investment in year-round camp facilities that he predicts will cut costs in the field by about 30% moving forward. The creation of new roads, meanwhile, will save us hundreds of thousands if not millions of dollars in travel and freight costs.

Purepoint has yet to earn revenues from its operations and is still considered to be in the development stage.

Frostad notes that the company has made significant progress this year on its four highest priority projects. It has also identified a good number of interesting drill targets for the coming winter season.

Purepoint has more than 42 defined target areas on its seven 100%-owned projects in the Athabasca basin. It also has two joint-venture projects with Cameco (CCO-T, CCJ-N) and AREVA Resources, a subsidiary of French energy company Areva (ARVCF-O).

Its first-pass drill program at the Red Willow project wrapped-up last month and assays are expected before the end of the year. Purepoint is scheduled to finish its exploratory drilling at its Hook Lake project in December, and a new drill program will begin again at the Turnor Lake and Red Willow projects in January.