Crosshair budgets $10M for Labrador

Crosshair Exploration & Mining (CXX-V, CXZ-X) has closed a $15- million bought-deal financing to continue exploring on its Central Mineral Belt uranium property in Labrador.

Lead underwriter, Canaccord Capital, has purchased 8 million non-flow-through units and 3.575 million flow-through common shares at a price of $1.25 per unit and $1.40 per flow-through share.

Each unit consists of one common share and one warrant, which

Slinging a drill by helicopter at Crosshair Exploration & Mining’s Central Mineral Belt uranium property in Labrador. The company plans to spend at least $10 million on exploration over the next 18 months, focusing on the C zone. is exercisable at $1.80 until Oct. 4, 2009.

Crosshair plans to spend at least $10 million on exploration over the next 18 months, including $3 million on drilling and $1.4 million on geophysical surveys.

The company’s main area of focus is the 4.5-km-long C zone, where a mineral resource estimate has already been completed based on 2006 and early 2007 drilling.

Indicated resources stand at 3.75 million tonnes grading 0.04% U3O8 for 3.19 million lbs. U3O8, while inferred resources are 6.32 million tonnes grading 0.03% U3O8 for 4.59 million lbs. U3O8.

Crosshair plans to update the resource estimate for the C zone this summer, including about a year’s worth of exploration work.

Vice-president investor relations, Dan McIntyre, says Crosshair will do more drilling in the C zone this year but will also focus on a few new areas.

“It depends what happens with winter drilling, which we’re still doing,” McIntyre says. “But we’ll have a drill down at the south part of the property, which has never been drilled before.”

McIntyre says the south end of the property sits in metamorphosed Precambrian rocks similar to Aurora Energy Resources’ (AXU-T) Michelin deposit, which has a measured and indicated resource of 67.4 million lbs. U3O8 and an inferred resource of 35.5 million lbs. U3O8.

“What we’re drilling now (on the north end of the property) is in a different rock belt but because of what Shell Canada had drilled originally back in the 1970s, we started there to leverage off their work,” McIntyre says.

Shell Canada reported assay results as high as 1.32 metres grading 1.18% U3O8 and 3.99 metres grading 0.562% U3O8.

The C zone also has a vanadium resource contained with the uranium. Vanadium is a soft, silvery, ductile metal used to improve the mechanical properties of steel by providing resistance to corrosion. Indicated resources stand at 3.75 million tonnes grading 0.08% vanadium for 6.39 million lbs. vanadium and inferred resources are 6.32 million tonnes grading 0.06% vanadium totalling 7.83 million lbs. vanadium.

Crosshair plans to have four drill rigs turning by the summer, but the company is exercising some caution on where it drills due to instability in the market.

“You can’t just go full-out right now with this environment,” McIntyre says. “You have to stick to your best ideas and your best models and go from there. . . You want to be pretty confident that the money you put in the ground is going to return something.”

In March, Crosshair announced it was repricing its financing to $1.25 per unit from $1.38 and to $1.40 per flow-through share from $1.55, and offering more units and shares. In April, Crosshair sent a letter to shareholders to inform them that it would not be directly affected by the Nunatsiavut government’s plans to legislate a three-year moratorium on uranium mining on Labrador Inuit Lands (LIL). Crosshair says less than 10% of its Central Mineral Belt property is on LIL territory. The moratorium has since come into effect.