UEX discusses West Bear sale with Cameco and Areva (January 21, 2008)

Lengthy lab turnaround times have driven UEX (UEX-T, UEXCF-O) to reprioritize its Athabasca uranium deposits by putting assays from the larger Horseshoe and Raven deposits ahead of those from West Bear.

The company has released an updated interim resource for West Bear, which saw the deposit grow 16% to more than 1.6 million lbs. U3O8.

But West Bear could have been larger than the estimated 73,800 tonnes averaging 1.004% U3O8 at a cutoff grade of 0.15% U3O8.

“Turnaround times for geochemical assay results are taking three to four months where previously, four to six weeks was the norm,” said UEX president and CEO Steven Sorensen in a statement.

The company is still waiting on results from sampling carried out in the summer, which will complete the resource for the full 500-metre strike length of West Bear.

But Sorensen is not as worried about getting a final resource for West Bear as he is about pushing ahead at the other deposits.

“Horseshoe and Raven samples should take priority over West Bear samples due to the significantly larger size of these deposits,” Sorensen says.

UEX plans to release National Instrument 43-101-compliant resource estimates for both Raven and Horseshoe this year; the deposits saw a combined 40,000 metres of drilling in 2007.

Recent assay results from 23 more holes at Horseshoe returned the second-best hole to date at the project; hole HU-134 intersected 31.7 metres of 0.75% U3O8, including a 6.1-metre section of 3% U3O8.

Horseshoe already has a historic resource of 13.2 million lbs. U3O8 at a grade of 0.17% U3O8, but the company believes it can improve on both the size and the grade of the resource.

The results of 44 holes drilled at Horseshoe last year are still pending.

Hidden Bay will see about 45,000 metres of drilling this year, starting this month. Drilling is planned to define mineralization at Horseshoe and Raven, test historic holes, and test gravity and resisitivity targets associated with areas of clay alteration in historic holes.

Mineralization at Horseshoe consists of shallow-dipping zones of hematization with disseminated and veinlet-hosted pitchblende-boltwoodite-uranophane, found in folded arkosic quartzite gneiss.

The company has had talks with Cameco (CCO-T, CCJ-N) and Areva (ARVCF-O) about West Bear regarding toll milling or possibly selling the deposit to generate cash for other projects.

“Either way, West Bear represents a potentially significant source of future cash flow for UEX that could be used to finance the development of its major deposits at Shea Creek and Raven-Horseshoe,” Sorensen says.

West Bear is near Cameco’s Rabbit Lake mill and Areva’s McClean Lake mill, operated by subsidiary Areva Resources Canada.

West Bear uranium mineralization occurs between 10 and 31 metres from surface. Considering that the host rocks and overburden are relatively soft, UEX says the deposit could be mined via open pit in a short timeframe.

Over the last year, UEX has done infill drilling at 5-metre intervals in two sections of the high-grade core of the main deposit area, drilled by Cameco in 2005. Uranium grades in the area included 10.7 metres of 6.032% U3O8 and 7.1 metres of 2.341% U3O8.


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