Purepoint Uranium defers 2009 winter drilling program
Purepoint Uranium Group Inc(C:PTU)
Shares Issued 73,308,035
Last Close12/2/2008 $0.055
Wednesday December 03 2008 - News Release
Mr. Scott Frostad reports
PUREPOINT URANIUM GROUP INC.: PROVIDES 2008 UPDATE
PurepointUranium Group Inc. is providing the following overview of its currentfinancial position, its exploration progress and its focusedexploration plans for the coming year.
"Continuing market turmoil has forced all investors to examinetheir individual portfolios" said Chris Frostad, Purepoint's Presidentand Chief Executive Officer. "Now, more than ever, companies such asPurepoint must work harder to report regularly to shareholders andprovide increasing transparency into their finances, their propertiesand their prospects. Prudent exploration juniors must make everypossible effort to carefully protect and budget their capital resourcesin a market where the ability to raise additional financing may belimited for an indefinite period".
Financial position
Purepoint was fortunate to raisemore than $20,000,000 of equity in the more liquid markets of 2006 and2007. As at September 30, 2008 Purepoint had working capital of morethan $4,600,000. In anticipation of the continued declining markets,Purepoint actively took steps through much of 2008 to conserve itstreasury and reduce overheads and operating costs. Purepoint managementis confident that the company has the financial resources, withoutadditional equity, to continue to explore on a more focused basis atleast three of its highest priority targets through 2009 and beyond.
In recognition of these unprecedented market conditions,Purepoint's board of directors recently resolved to defer Purepoint'sbudgeted 2009 winter drilling program. Given the extensive amount ofgeophysics and drilling undertaken by Purepoint over the past 18months, Purepoint management believes that the coming winter monthswould be most profitably spent analyzing and interpreting the massiveamounts of data generated by its earlier programs, and supplementingthat data with additional geophysics if warranted, in order to furtheradvance its geological theories and design even more precise drillingprograms.
The material savings in anticipated field operation costs,together with management's agreement to salary reductions, leavePurepoint in a much stronger position to weather the present marketstorm and eventually resume drilling activities.
Exploration Progress
Purepoint completed the last of its planned 2008 explorationprograms with the announcement of encouraging results from its SmartLake property. In the last five years, Purepoint has incurred more than$20,000,000 of exploration in the identification of more than 50defined target areas on its eight 100% owned projects in the AthabascaBasin, and has undertaken more than 23,000 metres of first passdrilling on the first few of those prospects.
Purepoint also completed in 2008 the program expendituresnecessary to earn its initial 20% joint venture interests in the twoadditional Basin projects Purepoint operates in joint venture withCameco Corporation and UEM Inc. Purepoint may eventually earn up to 50%in these projects, however it has no further funding commitments in2009 or 2010.
Focused Exploration
Until the return of more reasonable market conditions, Purepointhas determined that it would be in the best interest of itsshareholders to defer certain budgeted drilling and other programs in2009 across its diverse project portfolio and limit ongoing explorationexpenses to focused infill geophysics programs on its top threepriority targets:
1. Red Willow's Osprey Zone, where diamond drilling returnedassay grades as high as 3.03% U3O8 at shallow depths of less than 100metres;
2. Turnor Lake, where most of the diamond drill holes completedto date have returned significantly elevated radioactivity andfavourable alteration; and
3. Smart Lake, where Purepoint intersected a radioactivestructure over 54 meters reflecting intense clay alteration,silicification and hematization.
Exploration Efficiencies
Since inception Purepoint has worked hard to deliver "precisionexploration" by ensuring that every exploration dollar is spent ascost-efficiently as possible. To deliver efficiency Purepoint, unlikemost of its peers, established an internal operational infrastructuredesigned to deliver exploration services at a cost significantly lessthan those available from third party suppliers. In 2008 Purepointachieved a per unit reduction of 30% for its camp and field supportcosts and as much as 50% reduction in its drilling costs per metre.Management expects this savings to be maintained and improved upon incoming years. By way of example, Purepoint:
- owns, rather than rents, its exploration camps;
- owns or finances, rather than contracts, its drilling equipment;
- utilizes, where possible, permanent year round exploration camps; and
- establishes temporary or year-round ground access to itscamps, rather than relying on expensive air freight and helicoptertransport.
Where possible Purepoint takes the longer term view and incursupfront expenditures where significant longer term efficiencies can berealized.
Purepoint's commitment to cost efficiency is reflected in thenature and results of its exploration programs. The company investsheavily in the upfront geophysical work necessary to pinpoint existingconductors, structural faults and other geologic anomalies, prior tothe more expensive first pass or follow-up drilling.
Although there are no industry specific statistics readilyavailable, Purepoint has compiled and maintains its own database of theexploration and drill programs publicly released by more than 25 of thegrassroots junior exploration companies operating predominantly in theBasin. Based on that database, Purepoint management believes that overthe current exploration cycle (2005 through 2008) Purepoint canquantifiably demonstrate that:
- Purepoint has drilled and disclosed more diamond drill holesthan any other peer in the Basin (96 of the 665 drill hole resultsdisclosed)
- Of the peer drill results published, less than 10% reported0.005% or more U3O8 (generally the threshold level Purepoint believesto be worthy of follow-up)
- In contrast, more than 50% of Purepoint's drill resultsreflected 0.005% or more U3O8, with nearly 10% producing resultsgreater than ten times that threshold over at least one meter
Purepoint has made available on its web site a summary chartfor each of its properties detailing, on a target by target basis, theresults of all of its drilling to date. The company intends to maintainand update these charts as results become available in order to provideinvestors with a clear and complete picture of Purepoint's explorationprogress.
© 2008 Canjex Publishing Ltd.