VANCOUVER — It isn’t a particularly active year for the exploration community, but Forum Uranium (TSXV: FDC; US-OTC: FDCFF) is bucking the trend with a pair of drill programs it hopes will lead to another major discovery in Saskatchewan’s prolific Athabasca basin. The company has a promising joint venture with Rio Tinto (NYSE: RIO), and it has raised money to fund solo exploration across extensive properties in the region.
Forum holds 40% in the 7 sq. km Henday claims, which border French giant Areva’s McClean Lake uranium mine.
Rio operates the Henday project with a 60% stake and has the right to earn another 10% by funding $20 million in exploration, or delivering a feasibility study.
Last year saw versatile time domain electromagnetic surveys and historic data compilation, and the project could hit high gear in 2016.
On Jan. 11 Forum said Rio identified a number of drill targets from a 1,204 line km airborne magnetic and electromagnetic survey, and would mobilize two diamond drills at the site. Previous drilling on the property has identified anomalous radioactivity within basement lithologies, as well as alteration and associated radioactivity around unconformity deposits in the region.
“Rio’s plans and involvement have certainly garnered attention. There aren’t many companies with the financial resources in this market to conduct the type of geophysical campaign they did last year. We understand there will be likely two drill rigs at Henday that should run for most of the season,” president and CEO Richard Mazur said during an interview.
“The major focal points will be the Elephant and Epitaph targets on the northern part of the concession. It’s a compelling story fuelled by … a better understanding of the geological controls. When you combine the alteration in historic drill holes with the geophysical results, it essentially reorients the targeting. In addition, the depth to basement is 150 metres, so it’s quite shallow,” he added.
The timing was perfect for Forum, since it worked on a $750,000 private placement after news of Rio’s exploration plans. On Jan. 13 the company announced it had increased its financing to $850,000, consisting of flow-through and hard shares at 5¢ each. Mazur speculates that over $600,000 of the capital will likely be flow-through dollars.
The cash influx will allow Forum to pursue exploration of its own, which will focus on its Highrock targets at the Key Lake Road project, 15 km south of Cameco’s (TSX: CCO; NYSE: CCJ) Key Lake complex. Results of gravity surveys at the Highrock North and Highrock South concessions have identified a number of gravity lows, which could indicate alteration zones, clay development and uranium mineralization along strong electromagnetic conductors.
“High Rock sits along the same graphitic horizon that hosts Key Lake,” Mazur said. “We completed airborne and ground electromagnetics, and we’ll target gravity lows identified along the conductors. We have around eight targets, and will likely drill eight to 10 holes that we’ll prioritize based on the merit of the results. We want to keep exploration dollars in our back pocket in case we hit, and want to expand the program.”
The company is planning a 1,500-metre scout drill campaign at Highrock that will likely cost $300,000.
Forum aims to combine its own work with Rio’s results to provide news flow throughout the year. More capital will go towards a ground geophysics initiative at the company’s early-stage Fir Island prospect located along the regional Black Lake fault — part of the major Snowbird tectonic zone that marks the western boundary of the Mudjatik domain.
“The fact that we raised money is a testament to the interest in the uranium sector. I’ve worked a couple projects in the precious and base metal space, and there wasn’t quite that level of interest,” Mazur said. “We’re also drilling, which is attractive to shareholders right now, since it’s becoming pretty rare … there’s also a growing realization that uranium will have to play a role in the energy sector moving forward. It’s going to be an exciting year for our company.”
Forum has traded within a 52-week range of 4¢ to 11¢, and closed at 7¢ per share at press time. The company will have 51 million shares outstanding after its financing, along with just over $1 million in flow-through and hard dollars.