Uravan flies on Boomerang deal (July 14, 2005)

Shares in Uravan Minerals‘ (UVN-V) jumped 60% in early Venture Exchange trading on July 14, after the junior explorer said that uranium giant Cameco (CCO-T) would spend up to $10 million exploring the latter’s Boomerang uranium prospect in the Northwest Territories.

Under the deal, Cameco can take an initial 51% interest in the 41-sq.-km project by spending $6 million on exploration over six year; thereafter, the world’s largest uranium producer can boost its stake to 60% by covering another $4 million worth of exploration. In either case the two companies will form a joint after Cameco earns in; future exploration would be funded on a pro-rata basis. Cameco can take over as operator after two years.

The deal also covers around 1,580 sq. km worth of adjoining uranium prospects straddling the western margin of the Thelon basin. Uravan acquired those properties by staking late last year, and says that the properties have not been explored since the early 1980s.

The Boomerang mineral leases centre on the Boomerang unconformity-related polymetallic uranium prospect. The Thelon basin is coeval with the paleoproterozoic Athabasca basin in Saskatchewan and the Kombolgie basin in northern Australia; all three basins host world-class unconformity-related uranium deposits.

The partners plan an initial four-week program of 7,600 line-km of deep-penetrating high-resolution Megatem II electromagnetic and magnetic surveying.

Previous exploration at Boomerang focused on a set of sub-parallel graphitic electromagnetic conductors hosted in pelitic gneisses overlain by Thelon sandstone. Diamond drilling in the early 1980s included a 0.5-metre interval running 0.5% U₃O₈, 22.4 grams gold and 12.3 grams silver per tonne in strongly altered Thelon sandstone at the faulted unconformity. The intersection identified the first unconformity-related polymetallic uranium mineralization associated with the Thelon Basin. Fifty-eight widely spaced holes sunk in the 1990s to test conductive zones around the sandstone-basement interface encounter lower values.

Uravan’s shares settled later in the day to sit 20, or around 30%, higher at 90 in mid-afternoon trading.