NexGen completes Arrow discovery hole, finds multiple mineralized zones and off-scale radioactivity

NXE.v 5 day (Yahoo Finance)

NexGen Energy Ltd. 5 Day (Yahoo Finance)

This morning NexGen Energy Ltd. (TSXV:NXE) announced completion of the first hole at the Arrow prospect, RK-14-21, to 663 meters depth.

This was the same hole that caught the market’s attention last week for intercepting what is believed to be uranium mineralization (assays pending) between 207.8 and 231 meters.


Arrow, RK-14-21, 2PGA-1000 downhole probe results

Today’s news suggests an additional three mineralized zones at depths between 318.5 meters and 548 meters.

Dundee uranium analyst David Talbot reiterated his buy recommendation with no price target in an alert to subscribers Monday.

Talbot admits the discovery is very early stage but is encouraged by the size of the potential host area for uranium mineralization.

“We expect further share price appreciation upon significant first assays from hole -21, and then upon a second confirmation hole,” Talbot wrote, before sounding a word of caution. “There is no certainty that we will see either.”

Two additional holes have commenced drilling at the Arrow target and drilling is expected to continue into summer.

Read: NexGen Energy Completes First Hole at Arrow Prospect; Intersects Additional Zones of Highly Anomalous Radioactivity, Rook I West, SW Athabasca Basin

Related: Interview with NexGen CEO Leigh Curyer last Thursday


Disclaimer: We own a small position in NexGen which makes our coverage biased. Please read NexGen’s Cautionary Note Regarding Forward Looking Statements. All facts are to be verified by the reader. This is not investment or professional advice of any kind. Always do your own due diligence. Thank you.


NexGen’s Potential Discovery Opens Up The Western Athabasca Basin, CEO Leigh Curyer Explains

Leigh, Curyer, Mining, CEO, Uranium

NexGen CEO Leigh Curyer

NexGen Energy (TSXV:NXE) announced a potential uranium discovery in the SW Athabasca Basin region of Northern Saskatchewan yesterday. Visible uranium was seen in the first hole drilled into the Arrow target at the Western side of NexGen’s Rook 1 project, which caused shares in the junior explorer to rise over 90% Wednesday.

“There’s an element of luck,” CEO Leigh Curyer said by phone from Toronto at 10AM PST this morning. “This hole was really to get a sense as to what was happening with the geology in the area, and we nailed it.”

The sheer zone, or potentially mineralized area, appears to be large, Curyer says. The first hole began hitting radioactive anomalies at 49 meters depth, and yesterday’s announcement reported visible uranium in the core at 321 meters.  That hole continues drilling, and is now past 500 meters.

“We would stop the hole if the area of interest had stopped. We’re still in the right type of rock setting and the drilling continues.”

Following completion of the hole and assays to confirm the presence and grade of uranium mineralization, the company will drill two holes 50 meters out on either side of the discovery hole. These are quite wide stepouts, Curyer says.

“We’re sticking to our disciplined approach to get a sense of what the geology is in this particular target area and then we will vector in.”

The discovery is in its very early days, Curyer warned, saying it’s too early to answer most questions yet.

Andrew, Browne, NexGen, Energy

NexGen VP of Exploration Andy Browne

“There’s more holes to drill and there will be some that don’t come up, but from this one hole and applying [VP Exploration] Andy Browne’s 40 years of experience and the experience of the two guys that were on the Roughrider discovery, the grade is going to be there, and they have yet to define the area of interest.”

Curyer made a point of saying the discovery was independent from PLS, Fission Uranium’s 100% owned shallow, high grade uranium deposit on the adjacent South East property to Rook 1.

“It’s got nothing to do with PLS. It’s on the trend, but the rocks are slightly different, and it’s in a different type of zone.”

According to Curyer, this suggests that the Western Side of the Athabasca Basin could be a prolific uranium district, and is quick to remind me that NexGen has the most dominant land position in that section of the Basin. Others in the area include Skyharbour Resources and Aldrin Resource Corp.

“We’ve got nine other target areas just on that Western section of our Rook property that are based on the same principles of Arrow that haven’t yet been drilled.”

“The three of the twelve targets that we’ve drilled, we’ve hit mineralization in each of them. Arrow being the most significant to date.”

NexGen has $7.5 million in the bank currently, Curyer says, but they’ll have $5.5 million left at the end of March or in early April, when the Winter drill program concludes. That number could be slightly lower if they are able to bring in a third rig, which the company is working to procure before the end of the season. For now it’s just two rigs.

Curyer will be presenting the NexGen story at the PDAC convention in Toronto in early March, as well as at a Dundee Capital Markets uranium conference the Friday leading up to the PDAC.

“We’ve had finance offers and all sorts of things. I’m in Toronto at this moment and absolutely jammed for meetings.”

I let Leigh get back to it and told him I look forward to following more news from the company.

NexGen Energy shares trade on the TSX-Venture Exchange under the symbol NXE.

Yesterday Dundee Capital Markets analyst David Talbot re-stated his buy recommendation on NexGen’s shares with no price target.

We have been covering the company since before it became public and own a small share position which does make us somewhat biased.

Comments made by Mr. Curyer were off the cuff and are forward looking. Please read NexGen’s Cautionary Note Regarding Forward Looking Statements. All facts are to be verified by the reader. This is not investment or professional advice of any kind. Always do your own due diligence. Thank you.


SYH – Patterson Lake South Explorer, Skyharbour Resources, Refines Targets for March Drilling

The gravity survey has identified 23 targets near NexGen's property (Image: Skyharbour Resources Ltd.)

The gravity survey has identified 23 targets near NexGen’s property (Image: Skyharbour Resources Ltd.)

Coming off the back of the recent early-stage discovery made by NexGen Energy (NXE:TSXV) yesterday, Skyharbour Resources (SYH:TSXV) and their joint venture partners have announced they have completed their gravity surveys on the Preston Lake project located in the Patterson Lake South region.  The gravity survey identified 23 gravity low anomalies which the company will follow up on.  They also completed a RadonEx survey (ground and water) which has also helped them narrow their target list for drilling.  They expect to begin drilling in March.  With the recent success of NexGen, the investment community remains focused on this area and is rewarding success here.  Skyharbour believes the NexGen discovery shows the regional prospectively of the play and now seems likely that Fission’s discovery will not be the only one.

Jordan Trimble, President and CEO of Skyharbour Resources, states: “The new discovery made by NexGen at their Rook 1 Project further exemplifies the district-scale potential the Patterson Lake region offers. Skyharbour and its Syndicate partners are well positioned to take advantage of this going forward as we have carried out one of the largest regional exploration programs in the area over the last eight months in preparation for an initial drill program slated to commence in March.”

Regional map showing the exploration corridors (Image: Skyharbour Resources Ltd.)

Regional map showing the exploration corridors (Image: Skyharbour Resources Ltd.)

In the basin gravity surveys have been a useful tool for identifying targets due to the fact that the hydrothermal fluids associated with high-grade uranium deposits will extensively alter the host rock.  The alteration will create porosity which is then picked up using gravity surveys due to the density contrast.  This has been a successful early-stage method utilized by both Fission (and previously Alpha) and NexGen in the Patterson Lake South area.

These gravity low anamolies are then again tested to filter down the targets further using RadonEx.  This, in conjunction with further ground EM surveys will enable the company and its partners to identify specific targets for drilling.

Skyharbour is a member of the Western Athabasca Syndicate which includes Athabasca Nuclear, Lucky Strike and Noka Resources all of which can earn up to 25% of the uranium project by making cash and share payments and then incurring their pro-rata amounts of the $6 million exploration budget over the next two years.  Of the $6 million, Skyharbour is only responsible for $1 million of it.

Recently, the company acquired the Mann Lake project on the east side of the basin.  The project is located in a prolific part of the region and only cost the company $15,000 cash and 1 million shares.

Click here to watch Jordan Trimble, CEO of Skyharbour Resources, on BNN’s Commodities with Andrew Bell on February 5, 2014 discussing his project

Read: The Western Athabasca Syndicate Identifies 23 Gravity Low Anomalies at the Preston Uranium Property in the Patterson Lake Region of the Athabasca Basin

Disclaimer: Skyharbour Resources Ltd. is an advertiser, therefore the article is not to be considered unbiased and fully independent. Please read Skyharbour Resources’ Cautionary Note Regarding Forward Looking Statements carefully. Continue reading

NXE – NexGen Energy Discovers Uranium At Rook 1, Adjacent To Fission’s PLS Deposit

Rook 1 area; location of Area A, Arrow, Dagger, and PLS (Image: NexGen Energy)

Rook 1 area; location of Area A, Arrow, Dagger, and PLS (Image: NexGen Energy)

After announcing the stock was halted yesterday morning, all eyes have been on the newswires for NexGen (NXE:TSXV) in anticipation of a new Athabasca Basin uranium discovery.  Well, the anticipation is over and the company has made a discovery.  Alright, an early-stage discovery.  This find comes in an unexpected area which means more drilling is warranted and necessary.  The company is currently drilling a 6,000m program at their Rook 1 project near Fission’s Patterson Lake South discovery.  This is the first result from their 2014 drill campaign but represents a positive sign this early in the program.  This first hole was drilled into a prospect on the west flank of their project, known as the Arrow prospect.

The first hole at the Arrow prospect, RK-14-21, is still being drilled. From 204.8-231.0m downhole, it intersected 26.2m of sheared graphitic and garnetiferous breccia, with localized haematite-carbonate-graphite-chlorite alteration, set within a chloritised garnetiferous gneiss.  A number of significant radioactive zones were measured using a hand-held Exploranium GR-110 total count scintillometer.

Western Rook 1 claims, winter drilling 2014 (gravity background) (Image: NexGen Energy)

Western Rook 1 claims, winter drilling 2014 (gravity background) (Image: NexGen Energy)

Andrew Browne, NexGen’s Vice-President, Exploration and Development, commented “The Arrow prospect represents a totally new zone of uranium mineralisation in the SW Athabasca Basin, completely unrelated to any other known occurrence in the region. Its discovery demonstrates the commitment and geoscientific expertise of NexGen’s technical team of employees and consultants.”

The 2014 drill campaign is being focused on a number of anomalous areas that the NexGen team have identified.  According to Leigh Curyer, President and CEO, the company is now revising their plans in order to ”substantially expand the program at Arrow and the other 11 western located Rook I target areas. The result indicates the potential of this south-western section of the Athabasca Basin in becoming a new prolific uranium district.”

The shares just resumed and are trading up over $0.27 per share at the time of writing to $0.50.

Read: NexGen Drills 26.2 meters of Highly Anomalous Radioactivity on First Hole at Arrow, Rook I, SW Athabasca Basin

NXE – Has NexGen Energy made a discovery?


A promotional photo from the home page of which shows the Rook 1 project in relation to Fission’s PLS discovery.

Anticipation is building to find out what’s going on with NexGen Energy (TSXV:NXE). The company’s shares were halted before the opening bell this morning, and remain halted at press time (11:11amPST).

NexGen is currently one month into a drill program at their Rook 1 project in Saskatchewan’s SW Athabasca Basin, a property which is adjacent to and on trend with Fission Uranium’s (TSXV:FCU) shallow high grade PLS uranium deposit.

Fission’s market cap is approx. $375 million this morning, and NexGen’s is approx $29 million.

I’ve heard a rumour that NexGen has made a discovery, but it’s unreliable.

A bid for 1,070,500 shares in NexGen has appeared on the tape at $0.24, $.02 above the last trade. There are however 2,000,000 shares offered at the same price.

A call to the cell phone of NexGen CEO Leigh Curyer has not yet been returned this morning.

My guess (and hope) is that they have made a discovery, and that they are simply going back and forth with the Exchange over the contents of the news release.

I have a small long position in NexGen as a speculation and am biased towards a positive outcome.

NXE Chart

NXE data by YCharts

Read our full disclaimer.

One of junior mining’s youngest CEOs discusses his company’s exploration plans for 2014

syhJordan Trimble joined BNN Television’s Andrew Bell earlier. Trimble is CEO of Skyharbour Resources (SYH:TSXV), a micro-cap uranium explorer focused on Northern Saskatchewan’s Athabasca Basin region. Trimble discussed his company’s exploration plans for 2014, which includes an ongoing $6 million program at Skyharbour’s flagship Preston Lake project near Fission Uranium’s Patterson Lake South uranium discovery. Trimble also discussed the Mann Lake project on the east side of the Athabasca Basin which Skyharbour recently acquired. Mr. Trimble, 27, is a longtime and close personal friend of ours and one of the youngest executives in junior mining, however as you can see from the interview he is an excellent communicator and someone we expect good things from in the years to come.

Click here to watch Jordan Trimble, CEO of Skyharbour Resources, on BNN Television earlier ->


Disclaimer: Skyharbour Resources Ltd. is an advertiser, therefore the article is not to be considered unbiased and fully independent. Please read Skyharbour Resources’ Cautionary Note Regarding Forward Looking Statements carefully. Continue reading

Veteran financial prophet Jim Dines shares his outlook for 2014

James Dines, Dines, Letter

Jim Dines (Photo: Don Parrish)

Jim Dines has been writing one of the world’s best read financial newsletters, The Dines Letter, since the 1950′s, and he’s still going strong…

A few days ago Dines joined King World News to discuss his outlook for 2014 (Listen to the interview).

Dines pats himself on the back for calling the coming 3D printing boom, and is especially excited for its applications in biotechnology. He recommends one stock, Organovo, which Dines says has no revenue and is a “moon shot”, however his subscribers have already had a double on it, and he’s not aware of any brokers having recommended the stock, which is why he still sees upside in the highly speculative ‘bioprinting” play.

Dines says 3D printing is going to become cheap, cheap, with the major money to be made in the materials which the printers will consume, such as plastic, wood, and metals, such as silver.

Dines thinks gold and silver are headed way higher, with a $3000-$5000 minimum target on gold. He was more cautionary on the miners, which he said are subject to overtaxation by greedy “tax pig” governments.

“No tax is ever high enough.”

Dines also sounded a warning about the executives leading many mining companies.

“Not all management’s have the integrity to respect shareholders when they overprint stock to pay for personal squandering so mining has more risk, but it has more upside…”

Dines added that mining stocks are cyclical and they are certainly out of favour, but that bull markets are spawn during times like these.

Uranium is still a favourite commodity of the legendary economic forecaster. He thinks the world’s nuclear power plants need to be replaced, and urges governments to start stockpiling uranium for the centuries ahead.

“Politicians need to think in terms of centuries the way China does… Uranium stocks will for sure rise again and it wouldn’t surprise me if we were close to a bottom now.”

The full half hour interview with Jim Dines is available at King World News ->

These are the 5 best junior mining charts today

Nearly one month into 2014 we have decided to separate the wheat from the chaff and identify the 5 most promising charts in the junior space:

 Click to enlarge

Alderon Iron Ore Corp. (ADV.TO)


Alderon, with its partner Hebei Iron and Steel, are set to move its Kami iron ore project in Quebec’s Labrador Trough into production by 2016 with minimal share dilution.

Endeavour Mining Corp. (EDV.TO)


Endeavour’s four West African gold mines are set to produce 400,000 ounces in 2014 with cash costs under $1000 per ounce. This team has executed flawlessly and assuming they get out in front of the market in 2014, should be rewarded for it. * Highly levered to the gold price.

Fission Uranium Corp. (FCU.V)


Fission’s PLS uranium deposit is extremely rich, shallow and within ear shot of many of the world’s largest uranium mines, in Canada’s Athabasca Basin. Look for Fission to continue delineating its tremendous deposit or to be taken out by a rival in short order.

Roxgold, Inc. (ROG.V)


Roxgold’s 55-Zone deposit in Burkina Faso is considered to be an easy to mine gold deposit profitable at today’s gold prices in one of the world’s best mining jurisdictions.

Wellgreen Platinum Ltd. (WG.V)

WG.V_Weekly_1.28.2014Wellgreen CEO Greg Johnson is sitting on the richest platinum deposit outside of South Africa in a market that demands a diversity of supply. Plus, he’s a great storyteller and very visible in the marketplace. When junior mining comes back in vogue you may need a telescope to see how high this stock goes.

Warning: Junior mining stocks are extremely risky speculations, and not to be considered investments. These are opinions and NOT investment or professional advice of any kind. All facts to be verified by the reader. Author may trade stocks mentioned in this post. Always do your own due diligence. Thank you.

FCU – Fission drills best hole to date at PLS


NEW PLS Winter 2014 Drill Program Update with Radon-in-Water (Photo: Fission)

Fission Uranium Corp (TSXV:FCU) released the first five holes from its winter drill program at the Patterson Lake South (PLS) uranium project in the Southwestern Athabasca Basin region of Northern Saskatchewan.

Hole PLS14-129 (line 600E), with 36.72 meters of off-scale (>9999 cps) mineralization at shallow depth, was the best hole drilled at PLS to date by over 50%.

All five holes intersected off-scale radioactivity and have further narrowed the gaps between the mineralized zones R390E and R945E by approximately 45m (12%).

A $12 million, 90 hole, 30,000 meter Winter drill program continues at PLS.

Meanwhile, at the adjacent property to the Northeast of PLS, NexGen Energy (TSXV:NXE) has embarked on their winter drill program at the Rook 1 property.

Shares in Fission were up 4.2% to $1.24 in early trading on Monday. With 314,382,259 shares outstanding, Fission a market cap of approx. $389.834 million.


A Random Walk Down Howe Street

Cambridge, England is a university town that hosts a house of higher learning.

Cambridge House is a Howe Street abode, a dwelling where hope, fear and greed each have rooms on the same floor (and share a bathroom).

Highway directional sign for Bull market

When it comes to the search for a bull market, don’t believe all the signs. (Photo: Resource Investing News)

And floors and bottoms, of the TSX Venture variety, were something of a theme at this year’s Vancouver Resource Investment Conference, run by Cambridge House International.

I attended briefly on Monday afternoon, wandered the aisles, kicked a few tires and met a few friends. Even entered a new position partly as a result of research I did at the event.

Some random thoughts:

- More optimism than the last show I attended, where despair was the prevalent theme. A better turnout as well, albeit with a heavy industry presence. Notwithstanding the Venture’s 10% rise since the beginning of December, 2014 could be another choppy year for the juniors, making this walk down Howe Street a kind of two-steps-forward, one-step back shuffle, with potholes along the way. That makes a company’s cash position – something I touched on in this Vancouver Sun article written after the January 2012 show – critical.

- I often wonder why more CEOs don’t attend to stand behind their company (tables), particularly those whose companies are based in Vancouver. One of the exceptions Monday was Pretium CEO Bob Quartermain, who was pressing the flesh and speaking to shareholders at Pretium’s booth. The stock has shown signs of life, more than doubling since November, but the controversy over the amount of high-grade gold in Pretium’s Valley of the Kings zone in northwestern B.C. continues to weigh on shares. With a very large short position, PVG is a stock to watch.

- Spotted a dressed-down John Greenslade, former CEO of Baja Mining, one of the more striking examples of shareholder destruction in junior mining in recent years. Baja used to be a regular at the show, and before it ran out of money and was pummelled in a proxy fight, I remember a Baja “workshop” where the well-paid Greenslade waxed eloquent on the blue sky potential of the company’s Boleo copper project in Mexico. The stock, facing delisting from the TSX (that’s right, Canada’s main board), is at 2.5 cents, down from 10 cents a year ago and much greater heights in 2006, 2007, 2008, 2009, 2010, 2011 and 2012. A cautionary tale for any junior mining speculator.

- Peregrine Diamonds didn’t have a booth, but I spotted president Brooke Clements on the floor, chatting with whomever was manning the Diamcor booth. Didn’t get a chance to speak to Brooke, but I did chat with Peregrine fan John Kaiser after his seminar. Takeaways: he doesn’t rule out De Beers taking another run at Chidliak and also mentioned Dominion Diamond as a possible suitor down the road. Also, he said he doesn’t particularly like coloured diamonds and he downplayed the coloured gems recovered from CH-6, which he described as a “spectacular kimberlite.” Peregrine isawaiting a diamond valuation on its 1,124-carat parcel of CH-6 gems.

Kaiser covered alot of ground during his talk, including (but not limited to):
- how the major banks are trying to drive the junior retail investor out of the market;
- his belief that the juniors are bottoming and we’re at the beginning of a “selective bull market”;
- his searchable database of junior mining stocks and how he could use it to “terrorize” any exhibitor because he knows more about their project than they do;
- his favourite junior mining stocks – he went through alot of picks, machine-gun style, and I didn’t write them down – and area plays (including the Athabasca Basin).

As for the new position, I’ll write about that in a subsequent blog post.

Disclosure: I own shares of Peregrine Diamonds. Please read my disclaimer.

The post A Random Walk Down Howe Street first appeared on

PDN – Paladin to Sell 25% Interest in Langer Heinrich Mine for $190M, Removing Debt Overhang

Langer Heinrich was originally discovered in 1973 and acquired by Paladin in 2002 for AUS$15,000 and AUS$0.12 per pound of yellowcake (Photo: Paladin Energy Ltd.)

Langer Heinrich was originally discovered in 1973 and acquired by Paladin in 2002 for AUS$15,000 and AUS$0.12 per pound of yellowcake (Photo: Paladin Energy Ltd.)

The African-focused uranium producer, Paladin Energy (PDN:TSX) has come under pressure in the past few years due to a decreasing spot price for uranium as well as $600 million in debt on their balance sheet.  The market has been worried about the company’s ability to meet near-term obligations and the stock has been on a steady decline since Fukishima.  Paladin has found a buyer (China National Nuclear Corp. (CNNC)) for 25% of their Langer Heinrich mine in Namibia.  CNNC has agreed to pay $190 million for the stake in the mine as well as a right to purchase a pro-rata share of the uranium production at market prices.  This not only gives Paladin a much need balance sheet boost, but also secures a production off take agreement.

If this successfully closes, Paladin will have add the $190 million to the existing $125 million it currently has in cash.  This should be sufficient for the company to repay $300 million in debt that is maturing in November 2015.  This sale essentially lifts the debt concerns overhanging the stock and should allow for some relief in its share price.

Langer Heinrich deposit hosts ore reserves of approximately 125 million pounds of U308 at an average grade of 0.052%.  This grade seems low relative to the Athabasca Basin, and it is, but >0.05% U308 is above the global average for uranium deposits.  The company gradually increased production quarter-over-quarter in 2013 from 1.23 million pounds in Q1 to 1.43 million pounds in Q4.  They have plans for an expansion to the mine, but have held off for stronger uranium prices.

PDN Chart
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Read: Paladin Energy Ltd: Sale of Minority Interest in Langer Heinrich Mine, Namibia

NXE – NexGen Begins 6,000m Drill Campaign at Rook I

The focus of the 2014 program remains the area immediately northeast of the Patterson Lake South discovery (Image: NexGen Energy)

The focus of the 2014 program remains the area immediately northeast of the Patterson Lake South discovery (Image: NexGen Energy)

This morning, NexGen Energy (NXE:TSXV) announced the uranium explorer has begun their winter drill program at their Rook I project immediately adjacent to and northwest of Fission’s Patterson Lake South deposit.  The company has outlined a 6,000m drill campaign with two drill rigs.  NexGen has identified multiple targets from their 2013 summer drill campaign where they intersected uranium mineralization in three holes covering a 1.6km by 1.2km area, covering the interpreted extension of the Patterson Lake South 3B conductor.

Management expects to test targets identified by detailed geophysical surveys later in the program as well.  The company completed VTEM and magnetic surveys as well as gravity and resistivity surveys.  They also say that the company has identified more targets using aerial radiometric and EM surveys in late 2013.  The company has also identified an area which they intend to complete a gravity survey on that is located to the north east of the Patterson Lake Discovery zone that is interpreted as a large structural zone.

Leigh Curyer, NexGen’s CEO commented, “Rook I has multiple targets based on the results of the 2013 summer drilling program and previous geophysical programs conducted over the past two years . We are fully funded to execute this program, and look forward to another successful drill program over the coming months.”

The stock has been trading sideways in the $0.30 to $0.25 range since October after falling from a high of $0.52 in August.

Here’s the chart:

NXE Chart
NXE data by YCharts

Expectations to make an immediate and major uranium discovery were high when NexGen first began trading in the summer of last year.  In speaking with CEO Leigh Curyer last week, he said what they found in their initial program was better than they expected going into it.  He is very excited about their chances for making a discovery.

Late last week, the company extended their work commitments for the Radio project with its optionors from May 31, 2015 to May 31, 2017.  This allows the company to focus more immediate time and resources on Rook I, although the project remains a high priority for them.  Now NexGen doesn’t have to complete $10 million in work on Radio until the end of May 2017.

The company is sitting on $7.8 million in cash after raising $3 million in flow-through in late December.  In this business there are management teams that spend movey on G&A and have very nice/large offices, and then there are teams that try and make every dollar add value to shareholders.  Leigh and his team are the latter.  They have a modest office and Leigh tells me they are targeting $1 dollar of G&A expense for every $10 of work on their projects by year-end.

They expect to spend $3 million on this winter campaign.

Read: NexGen Commences 6,000-Meter Winter Drilling Program at Rook I Project, Western Athabasca Basin, Saskatchewan

Cameco is Just Getting Started

At the end of last year we highlighted “3 Stocks for 2014″, as it has turned out we have been quite lucky in the new year with these picks: CSIQ +43.5%, CCJ +6.7%, ABX +3.3%. While CSIQ has rocketed into the stratosphere, CCJ and ABX are just getting started.

We are particularly interested in CCJ which has seen thick buying during the past 3 days and has broken out from a long term base:

Click to enlarge


While Cameco (NYSE:CCJ, TSX:CCO) has become moderately overbought on shorter time frames, this is a stock which is displaying all the signs of just getting started on a breakout from a massive long-term base (heavy institutional accumulation, breakout above long-term downtrend line, MACD bull cross, etc.) – $30 is a modest target for 2014.

Recently we identified another attractive chart setup in the uranium space, FCU.V:


FCU was among the hottest of 2013 after it and JV partner Alpha Minerals discovered high grade uranium in size at shallow depths in Northern Saskatchewan, Canada.

Experts in the industry say Fission’s PLS project is the richest uranium deposit in the world in the hands of a junior company, and say that it’s better than it’s last comp, Hathor Exploration, which sold for $650 million in late 2011. Fission’s market cap today is $340 million.

As an exploration stage company in the uranium space Fission is clearly much riskier than Cameco, however, it may have more upside.

SYH – Skyharbour Diversifies Outside of Patterson Lake South Play and Acquires Interest in East Side Project

McArthur River is the largest high-grade uranium mine in the world with grades 100 times greater than the global average (Photo: David Boily/AFP/Getty Images)

McArthur River is the largest high-grade uranium mine in the world with grades 100 times greater than the global average (Photo: David Boily/AFP/Getty Images)

Skyharbour Resources (SYH:TSXV), the Patterson Lake South (PLS) explorer, is diversifying outside of the PLS play by acquiring a 60% interest in the Mann Lake project located on the east side of the Athabasca Basin.  The exploration project is roughly 25km SW of Cameco’s (CCO:TSX) McArthur River mine and 15km along strike from their Millennium deposit.  Skyharbour will pay Canterra Minerals (CTM:TSXV) $15,000 cash and issue them 1 million shares to acquire the 60% interest.

Bordering the Mann Lake project is the Mann Lake joint venture which is operated by Cameco (52.5%) and includes partners International Enexco (IEC:TSXV) (30%) and AREVA (17.5%).  According to International Execo, a 13,000m drill program is expected to start this month.  Basement hosted uranium was intersected on the Mann Lake joint venture during a 2006 drill campaign including 0.25m of 7.12% U308 and 0.4m of 5.53%.

Given the geology of the Basin, as you move West from the east side walls of the sandstone the uranium hosting rocks deepen.  As a result, the potential mineralization at the Mann Lake project is deeper than in the PLS.  However, this project adds depth to Skyharbour’s asset portfolio and enables it to diversify outside of its four-way joint venture on their Patterson Lake South project called the Preston Lake Project.

Skyhabour is acquiring the Mann Lake project for $15,000 cash and 1 million shares (Image: Canterra Minerals Corp.)

Skyhabour is acquiring the Mann Lake project for $15,000 cash and 1 million shares (Image: Canterra Minerals Corp.)

The Mann Lake project has previous work completed on it, including 5,400m of drilling as well as geophysical work.  This drilling intersected a 4.5m zone of anomalous boron in the sandstone.  The geophysical surveys identified basement conductors and structural corridors containing reactivated basement faults. These features appear trend onto the adjacent ground held by Cameco.  Boron enrichment is common at the McArthur River uranium mine and, along with illite and chlorite alteration, is a key pathfinder element for uranium deposits in the basin.

Jordan Trimble, President and CEO of Skyharbour, stated: “The Mann Lake uranium project boasts highly prospective geology and geochemistry and a robust discovery potential as identified by the historic work consisting of over $3-million in exploration expenditures, with additional work recommended on a number of untested targets.”

The company has roughly $700,000 which they expect will get them through the next 6-8 months, including the next phase of work at their Preston Lake project.  This will include a ground gravity survey.

Fission (and previously Alpha) were able to delineate their targets at the PLS project using resistivity surveys.  Skyharbour and their joint venture partners are opting for gravity surveys.  The goal is to pick up relative gravity lows where the leaching and replacement of basement rocks by hydrothermal basinal fluids creates a density contrast.

The company hasn’t announced plans for the Mann Lake project, but Jordan told me by phone that “the company remains focused on Preston Lake but now has the option to diversify to the east side of the basin where exciting work is being done by Cameco.”

Preston Lake should see an initial drill campaign by March (which the company is funded to complete as well).  Skyharbour only has to spend $1 million of the budgeted $6 million in work to be completed on the project over the next couple of years.

Skyharbour was up over 100% for 2013 and was a top performer on the TSX Venture Index.

Here’s the chart:

SYH Chart
SYH data by YCharts

Read: Skyharbour Acquires 60% Interest in Mann Lake Uranium Project in the Athabasca Basin, Saskatchewan

Disclosure note: Skyharbour is a client. This is an opinion an not advice. Do your own due diligence and please read our full disclaimer.