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Issue 2 Vol. 14 January 17, 2007 Customer Service 1-800-528-0559
Uracan Resources (URC-TSXV) 2006 Exploration finds Large Anomaly
www.uracanresources.com
Uracan shares surged to a new high today after the company released the long awaited results from their 2006 surface sampling program on their Quebec property – and we got what we were hoping for. Results show there is a very large anomaly that is quite consistently mineralized.
Large, in this context, means an anomaly that is many kilometers long and kilometers wide, giving us the prospect of a big uranium deposit.
And even better news, management says they will begin drilling this Quebec prospect – the North Shore Property – within weeks, keeping corporate momentum strong.
We jumped into Uracan Resources in May 2006 as a strong geological team (Bema Gold) combined with a strong financial team (Endeavour Financial) to start a new uranium exploration company focused on shallow, bulk tonnage prospects. Considering what Endeavour has done with their other uranium company, UrAsia (UUU-TSXV), Uracan was worth watching.
In the 1960’s and 1970’s the Quebec property received about 100 drill holes over two separate staking rushes compiling a historical resource of some 50 million pounds of uranium. This is lower grade uranium – about half a pound per ton.
With the uranium spot price at a record breaking $72, these shallow bulk tonnage deposits are potentially very profitable. It’s these type of low cost, large low grade deposits which will help close the supply/demand gap – currently running at about 71 million pounds a year (the world uses about 173 million pounds and produces about 102 million). And from an investor’s point of view, these targets are great because they are cheap to explore and cheap to drill. Drill holes will likely be no more than 150 metres deep which gets away from potential water and flooding problems like Cameco is experiencing at Cigar Lake.
One of Uracan’s anomalies is 15 km square, with grab and channel samples up to 2.4 pounds per ton. Another is 1 km x 1 km, with grab samples up to 19 pounds per ton. So the size potential is great, and at this early stage – these are just surface numbers – we have enough grade to get us very hopeful about this upcoming drill campaign.
Two pounds per ton (0.1% U308) is US$144 rock. Even half that could be enough to sustain an open pit uranium mine with enough size. Quebec is a great mining jurisdiction. Aurora Energy, (AXU-TSXV) has an almost $1 billion market cap on a deposit with two pounds per ton, starting at 50 m depth, in a remote area of Labrador in eastern Canada. Uracan now has similar grades (though at surface) over a large area with road and port access. Logistics are excellent.
Surface results from their Saskatchewan property are due soon as well which could further lift the stock if results are positive. However I expect that once the drills start to turn in Quebec, we will see a significant speculative premium attached to the stock.
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