VANCOUVER — Two junior uranium explorers with side-by-side projects in northern Saskatchewan — Hathor Exploration(HAT-V)and Fission Energy (FIS-V) –are drilling as quickly as possible before spring break-up and the results from their efforts indicate the potential for a significant, joint deposit.
Hathor is drilling its 90%-owned Roughrider discovery at the Midwest Northeast project and just received results from its first drill hole of the winter program. The 80-hole, 26,000-metre program has three goals: to infill and expand the Roughrider zone, to test a new area known as Roughrider East that returned 28 metres grading 12.71% U3O8 at the end of the last drill program, and to probe targets elsewhere on the property.
The first hole of the winter program was aimed at the second of those goals — to test the new Roughrider East zone. And hole 607 indicates the new zone is set to grow, with an intercept of 81.5 metres averaging 1.59% U3O8 starting 260 metres downhole. The long interval included 41 metres grading 2.61% U3O8 or 13.5 metres of 6.12% U3O8. Individual assays from the core returned grades as high as 68.1% uranium oxide.
Mineralization in hole 607 stretched down from the unconformity and permeated all basement rock types, including both the Wollaston group pelmitic gneisses and the overlying hangingwall of granites and pegmatites.
“These assays confirm the uranium potential that originally excited our exploration team in the field — seeing core box after core box of altered and radioactive core delivered from hole after hole,” said Hathor’s exploration manager Alistair McCready. “And the fact that we are now intersecting broad and continuous sections of altered rock with elevated uranium content throughout gives us something entirely new to be excited about: the potential for. . . large volumes of continuously mineralized rock.”
Hole 607 is the first of four holes in a fence that steps out west along strike 25 metres from the Roughrider East discovery hole. If Hathor can connect Roughrider and Roughrider East, the ensuing deposit would have a strike length of 400 metres.
The Roughrider deposit currently hosts 116,000 indicated tonnes grading 2.57% U3O8 plus 83,000 inferred tonnes averaging 3% U3O8, for a combined total of 12 million lbs. uranium oxide. Hathor’s current infill program could increase those numbers significantly by better delineating high-grade pods. Less than 10% of the tonnage at Roughrider carries more than half of the contained uranium, but in calculating the resource high U3O8 grades were cut and several isolated, high-grade intercepts were excluded due to lack of confidence.
Terra Ventures owns a 10% stake in Midwest Northeast, which is carried until a production decision is made. On news of the results from hole 607, Hathor’s share price gained 11¢ to reach $2.15; the company has a 52-week trading range of $1.30-$2.64 and has 101 million shares outstanding.
Meanwhile, just 100 metres west of the Roughrider deposit Fission Energy and its joint-venture partner, a consortium of companies led by Korea Electric Power Corp. (KEPCO), are pulling high radioactive core out of the ground at their Waterbury Lake project.
The partners have named the new zone the J-zone and its first few holes are promising. Discovery hole 63, hit 10.5 metres grading 1.91% U3O8, starting 226 metres downhole and including 1 metre of 13.87% U3O8. Two weeks later came news that hole 66, located immediately south of hole 63, returned 12 metres grading 3.64%U3O8 from 202 metres depth, including 1.5 metres averaging 27.38% uranium oxide.
Now two more drills have shown strong uranium mineralization. Hole 70, a 15-metre step to the west from hole 63, cut 17 metres grading 3.99% U3O8, starting 195 metres downhole and including 7 metres of 7.48% U3O8. And hole 68, which intersected mineralization 35 metres north of hole 66, hit 2.5 metres grading 2.78% U3O8 at 210 metres depth.
Since, the holes have all intersected mineralization at roughly the same depth, the partners believe J-zone is home to a flat-lying body of mineralization. Following news of the first holes to hit the Jzone in late January, Fission’s share price jumped from under 20¢ as high as $1.15 before settling to the 90¢ level.
Fission and the KEPCO Consortium negotiated a deal in early 2008, whereby the Korean consortium can earn a 50% stake in Waterbury Lake by spending $14 million on exploration over three years. The KEPCO Consortium has spent roughly $10 million to date and has budgeted $4 million for this year’s program. Fission retains a back-in option to re-acquire 10% for $6 million and also holds a 2% net smelter return royalty.
Both Midwest Northeast and Waterbury Lake are well located, sitting right beside the Midwest uranium deposit owned by Denison Mines(DML-T) and French energy giant Areva, which hosts 41 million lbs. U3O8 at an average grade of 5.5%. Also nearby are Cameco’s (CCO-T, CCJ-N) 226-million- lb. deposit at Cigar Lake and the McClean Lake uranium mill.
At another Hathor operation 10 km along strike to the northeast, drills are turning at the Henday Lake project. Forum Uranium (FDC-V) owns Henday Lake; Hathor is earning a 60% interest by spending $3.5 million over three years.
The 2010 program will include 4,500 metres of drilling in 18 holes. The key target is Mallen Lake, where a gravity survey returned the kind of gravity lows that Hathor used to identify the Roughrider deposit. The program kicked off on Feb. 8; no results have yet been released.
And in a final piece of Canadian uranium news, the federal government said in its throne speech that it would push ahead with plans to relax foreign ownership rules in the uranium industry.
In the speech, the Conservative government said it wants to “ensure that unnecessary regulation does not inhibit the growth of Canada’s uranium mining industry by unduly restricting foreign investment.”
A bill regarding this issue was before the House of Commons last year, but it was put off before Parliament was prorogued in December. There is currently a 49% limit on foreign ownership in the uranium sector.
Loosening the foreign ownership regulations would not likely lead to a takeover of Saskatoonbased Cameco, which is the world’s largest uranium producer, as provincial legislation requires the company to maintain its head office in the province.
In addition, federal laws specific to Cameco prevent a non-resident from holding more than 15% of the company’s shares and total foreign ownership cannot exceed 25%.
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