VANCOUVER — Two companies with neighbouring uranium properties released stellar drill results on the same day, stoking further excitement that the long-overlooked southwest edge of the Athabasca basin hosts significant uranium at shallow depths.
The results were good enough that NexGen Energy’s (TSXV: NXE) share price doubled, while one analyst described Fission Uranium’s (TSXV: FCU; US-OTC: FCUUF) hit as “the most significant hole ever drilled in the Athabasca basin and, perhaps, globally.”
NexGen’s news came from its Rook 1 property. Rook 1 abuts Fission’s Patterson Lake South (PLS) project to the east. Both lie just outside the southwestern edge of the Athabasca basin in northern Saskatchewan.
In mid-2013 NexGen pulled some interesting results in its first Rook 1 drill program, which focused on the strike extension of PLS. The winter drill program now underway has a different focus — to test a series of geophysical targets — and the shift in focus paid off.
The first hole of the program, hole 14-21, returned 26.2 metres of “highly anomalous radioactivity,” complete with zones of disseminated pitchblende and intense hematite alteration, from a target known as “Area C.”
“Given that PLS is such a spectacular deposit, we were always going to focus on where that conductor entered our property,” said Leigh Curyer, NexGen’s CEO, referring to mid-2013’s drill holes. “But if we looked at Rook 1 as a clean sheet of paper, and there had been no mineralization discovered at PLS — I’ve always said that we would have been drilling in other areas first. Area C was one of those areas, and in the very first hole we’ve hit it.”
Assay results are not yet available. The hole is not even finished. NexGen simply announced that a 26.2-metre interval starting 205 metres downhole contained several significant radioactive zones as measured by a scintillometer. The company considers any section generating 500 counts per second over at least 5 cm as significant.
Investors agreed the news was noteworthy, boosting NexGen’s share price 20.5¢, or 91%, to close at 43¢.
Eight kilometres west, Fission also has drills turning. With a $12-million, 90-hole winter drill program, the company is trying to prove up mineralization between the project’s six zones, which are spread along 1.8 km of east–west strike.
Hole 129 helps. Drilled as a 10-metre stepout east of zone R585E, which is in the middle of the lineup of zones, it returned the best result from the property to date. Eight mineralized segments totalling 100 metres spread over 165 metres of core included such intercepts as 38 metres grading 13.66% uranium oxide (U3O8), which includes 10.5 metres of 38.49% U3O8, and another 31.5 metres grading 11.19% U3O8.
“These results far surpass our previous top holes,” said Fission president and chief operating officer Ross McElroy. “PLS has already grabbed world attention with the quality and quantity of its high grades, and hole 14-129 is another big step forward.”
A common metric used to compare high-grade uranium intercepts is grade thickness, which is the uranium grade multiplied by the intercept length. Hole 129 returned a grade thickness more than double the previous best at PLS, which came from a hole that included 21.76% U3O8 over 21.5 metres.
The market has perhaps become accustomed to high-grade drill results at PLS, as the news only added 8¢ — or 7% to Fission’s share price — which closed at $1.27.
Raymond James analyst David Sadowski was impressed with the news.
“Given this interval starts at only 56 metres core depth, it is well within open-pit range and this, in our view, represents the most significant hole ever drilled in the Athabasca basin and, perhaps, globally,” he wrote.
Sadowski noted that NexGen’s news was also significant, writing that the discovery at Area C “validates the mineralized prospectivity of a roughly 8 km east–west strike” and “significantly boosts potential for new discoveries in the untested ground” in the corridor between Fission’s western zone and NexGen’s Area C hit.
Fission’s PLS project is still young, but has already earned accolades for its high grades, the shallow depth at which mineralization occurs, and its location just outside the southwestern edge of the Athabasca basin, far from the famous eastern part of the basin.
The Northern Miner named McElroy and Fission chairman and CEO Dev Randhawa as its “2013 Mining Persons of the Year” in recognition of the discovery. It is possible, however, that it was only a matter of time before any kind of discovery was made in the area, because NexGen’s management team staked its Rook 1 property before Fission discovered anything at PLS.
NexGen was born when Curyer and NexGen’s vice-president of exploration Andrew Browne left their jobs running a uranium investment fund in London. In that capacity they had “looked at every uranium production, advanced development and exploration project in the world,” according to Curyer, and the Athabasca stood out as the home of high grades and tonnages.
They assessed over 200 projects before securing their first property, the Radio project, in the eastern basin directly adjacent to the Roughrider deposit.
“But we had also identified this portfolio of properties straddling the shallower portion of the basin on the southwestern edge, and they all had really strong geophysical characteristics,” Curyer said. “So we secured those properties, and that was before the discovery at PLS.
“Because we’ve got the most dominant land position in this part of the basin people could simply categorize us as an area play, but that would imply we secured our properties after the PLS discovery,” he continued. “In fact, we left private equity to pursue these projects in our own right.”
Also, if NexGen’s technical team is correct, the mineralization at Area C is not related to the mineralization at PLS. NexGen points out the geology is different: the uranium at Area C is hosted by garnet-bearingus breccias, while the mineralization at PLS is within sheared pelitic gneiss.
The company currently has two drills turning at Rook 1. NexGen had planned a 6,000-metre program, but Curyer says those plans are being revisited after the hit at Area C. Both drills are now probing Area C, and Curyer hopes to bring a third rig to site that could test the other 11 geophysical targets that look as promising as Area C.
NexGen is well capitalized to advance Rook 1. After completing a $3.2-million private placement in December, the company has $7.8 million in its treasury.
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