COAL, URANIUM & OIL SANDS — Partners active at Riou Lake

It’s a far cry from the 1970s, when Saskatchewan’s Athabaska Basin was staked solid and dozens of companies had active uranium exploration programs, but a modest renewal of activity in the area has accompanied the turn in the uranium markets.

On the northern margin of the basin, uranium producer Cameco (CCO-T) and junior explorer Pioneer Metals (PSM-T) are completing a program of winter exploration on a 148-sq.-km property near Riou Lake, about 120 km southeast of Uranium City. The current program includes geophysical prospecting and drilling to test a number of targets Pioneer has outlined since it started work in 1997.

Cameco is earning a 60% interest from Pioneer by spending $6.5 million over a 6-year period. The first two years of the option agreement oblige the major to spend a minimum of $1.3 million on the property.

Pioneer started drilling again this winter on its Southeast Grid, part of the area optioned by Cameco. A concentration of radioactive boulders, named the W zone, was discovered on the shore of Riou Lake in the summer of 1998. The boulders are near an electromagnetic (EM) conductor, which lies beneath the lake and was found by a previous geophysical survey.

The area was drilled in 1966 by Numac Oil & Gas but was stopped above the boundary between the sandstones of the basin and the underlying crystalline basement rocks. Saskatchewan uranium deposits have most often been found near the unconformity between the basement and the sandstones.

Pioneer sampled the old Numac drill cores in 1998, and found that the sandstones near the bottom of the hole were fractured, with anomalous concentrations of uranium in the strongly fractured rocks. They also contained anomalous nickel, cobalt, lead and arsenic, all of which are typically associated with uranium mineralization in the Saskatchewan deposits.

Pioneer is also performing large-loop EM surveys over the property, and over another 399 sq. km it holds adjacent to the optioned property. Time-domain electromagnetics detected the Riou Lake conductor, which is being tested in the current drilling program. The program is expected to define other conductive bodies in the same area, as well as another zone on the Pioneer ground where some altered sandstone has been found.

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