Roughrider East delivers for Hathor

Now that all assay results have been received from its summer drill program on the Midwest Northeast uranium property in Saskatchewan’s Athabasca basin, Hathor Exploration (HAT-V) believes the Roughrider East discovery has the potential to rival that of the nearby Roughrider deposit.

A newly updated resource estimate for Roughrider shows the original deposit contains an indicated 394,200 tonnes grading 1.98% U3O8, plus an inferred 43,600 tonnes of 11.03% U3O8, for a combined total of 27.8 million lbs. uranium oxide, more than double the 2009 preliminary estimate of 12 million lbs.

Roughrider East was discovered last year at the end of the summer program in an area 200 metres east of the Roughrider zone. Since then, Hathor has put some 50 holes into the new discovery. While the Roughrider deposit sits under McMahon Lake, the Roughrider East zone is land-based.

Based on the most recent results from the 2010 summer program, Hathor has encountered uranium oxide mineralization of better than 1% over a potential strike length of 220 metres at Roughrider East (line 160 west to line 60 east), including a higher-grade core of over 100 metres strike.

The robustness of Roughrider East is illustrated by newly released hole 656A, which intercepted an impressive 16.5 metres averaging 10.5% U3O8 within a 51-metre-long section of alteration. The high-grade interval included 7 metres of 22% U3O8, starting at 274 metres downhole on line 60 west.

“This is a hole you can’t do in very many places in the Athabasca,” Michael Gunning, Hathor’s chief operating officer, told The Northern Miner. “It is 40 metres west of line 20 west, which has some of the richest drill holes ever drilled into uranium, period.”

Gunning notes that there is significant potential to add to the mineralization updip of hole 656A by about 40 metres.

Hole 656A was drilled 40 metres west of previously reported hole 648, which cut a staggering 63.5 metres of 7.75% U3O8, including 17.5 metres at 24.3% U3O8. Hole 648 was an infill hole designed to test a 40- metre downdip gap between holes 610 (12 metres of 22.5% U3O8) and 613 (16 metres of 1.24% U3O8) on line 20 west.

“When you put out holes like 648, it tends to set the bar awfully high in terms of expectations,” Gunning says. “I think it does tend to euthanize the market. Those numbers are hard to duplicate anywhere in the world.

“It is clear you can see a real plum of high-grade mineralization on line 20 west,” adds Gunning. “The key is what kind of strike length can we attach onto it. If we can carry line 20 west over to line 60 west, with those kinds of grade/thicknesses, you build pounds extremely quickly.”

Stepping out 60 metres along strike to the east of hole 648, Hathor hit 150 metres of alteration, including a 14.5-metre section of 3.3% U3O8 in hole 649, while drilling line 40 east on the eastern end.

“Some 3.3% over 14.5 metres is not the best hole drilled on the Midwest Northeast property, but it is truly a world-class grade/thickness drill hole,” exclaims Gunning.

Drilling on the western end of Roughrider East returned a previously reported 9.5 metres grading 1.2% U3O8, including a 2-metre section of 5.5% U3O8 in hole 629, which tested line 100 west. Farther out into the lake in the gap between Roughrider and Roughrider East, Hathor hit an intersection of 1% U3O8 at the unconformity on line 160 west.

“Roughrider East is doing what Roughrider did; it’s just starting to put out more and more of these truly world-class grade/thickness (intercepts), and the key is what kind of continuity can we build on,” says Gunning.

He adds: “What I have seen at Roughrider over the past year is that when you’ve got these separations of 30 or 40 metres at the drill bit in these high-grade zones, you’ve got tremendous potential to infill and find continuity in that high-grade.”

Hathor has sunk more than 250 drill holes on Roughrider alone, of which 149 actually define the mineralization. Roughrider has been drilled off at less than 10-metre centres in the core zone and to about 25 metres elsewhere in the deposit.

“Roughrider East has the same overall strike length as Roughrider at a couple hundred metres, but we’ve got about one-third the drill holes,” explains Gunning.

“You really have to be on a 10- metre spacing because the nature of these replacement systems is such that they change,” says Gunning. “It wasn’t until we were drilling at that spacing that Roughrider really showed itself to have the kind of grade continuity that ultimately produced that resource we put out several weeks ago.

“The reason why Roughrider went from the preliminary estimate of 12 million lbs. to 28 million lbs. was because we were simply able to develop a much more robust geological model on 2-D sections that showed the high-grade material was more predictable and more continuous than we thought initially.”

The Midwest Northeast property is in the eastern Athabasca basin, 8 km north of Points North, a service hub, and 400 km north of La Ronge. Hathor owns a 90% interest, while Terra Ventures (TAS-V) owns the remainder and is carried through to production.

The 5.4-sq.-km property is 11 km west of the McClean Lake mill complex and less than 5 km along strike of the Midwest uranium project owned by Denison Mines (DML-T, DNN-X), Areva Resources Canada and OURD Canada.

“We tend to get a bit euthanized by the numbers at McArthur River and Cigar as if those are representative of the basin,” says Gunning. Discovered in 1988 and put into production as an underground operation in 1999, McArthur River contains ore reserves of 778,500 tonnes of 19.53% U3O8, equivalent to 335 million lbs. uranium oxide.

Cigar Lake is the world’s largest undeveloped high-grade uranium deposit. After struggling with some serious water inflow issues, the mine has resumed development with a target of mid-2013 for first production. Reserves total 557,300 tonnes at a grade of 17.04% U3O8, for a contained 209 million lbs.

“The Athabasca is special in the world in the sense that it is plus 1% U3O8 material when most of the world is around 0.15%,” notes Gunning. “Cigar and McArthur are what I call special within special, and people tend to think if you are not pulling out those kind of intersections, you are not keeping up in the Athabasca. Cigar and McArthur are really an order of magnitude even above the traditional camps in the Athabasca basin.

“Roughrider and Roughrider East are becoming what I would call above average grade in the Athabasca because the Cluff Lake, Mc- Clean Lake, Rabbit Lake and Key Lake camps were typically in the 1-2% range,” Gunning says.

The Roughrider deposit has a high-grade core containing an indicated 58,200 tonnes grading 10.68% U3O8, which accounts for 13.7 million lbs. Another 10.6 million lbs. of U3O8 are inferred, based on 43,600 tonnes at 11.03% U3O8.

“Roughrider really is best-of-breed, even within the Athabasca basin, and Roughrider East is starting to take on those attributes if we can pull out those higher-grade holes over the 220 metres (of strike length),” remarks Gunning.

The company has started working on a 2-D geological model for Roughrider East. By mid-January, Gunning hopes to be in a position to incorporate that data into an inhouse preliminary resource model.

Hathor is gearing up to begin an aggressive winter drilling campaign in early January that is budgeted at $5-6 million. A minimum of 40 holes have been laid out. Most of the drilling will be done on Roughrider East. One rig will be used to infill and tighten the spacing alo
ng Roughrider East’s higher-grade corridor.

“The mineralization to the east of Roughrider East is open, so we need to chase that,” says Gunning.

A second rig will begin drilling fences across a 700-metre-long, northeast-southwest trending resistivity anomaly to the south of Roughrider East. The resistivity anomaly lies along the projected trend of the nearby Midway deposits and the controlling regional shear zone.

“The resistivity anomaly is a fantastic blue sky opportunity of having a third zone within the Roughrider system,” Gunning says. “Roughrider and Roughrider East are on an east-west trend, but the main fluid conduit is going to be anchored by that Midwest trend.”

A third rig will be positioned on top of the lake ice. It will be used to test an area to the northeast of the main Roughrider zone where alteration is associated with a magnetic feature.

Hathor has 107.1 million shares outstanding, or 117.5 million fully diluted, and a cash position of $25 million. The junior is trading around $3.20 in a 52-week range of $1.35- $3.57. Terra, with 54.2 million shares outstanding, is at 53¢ within a 52- week period of 25¢-60¢.



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