RE:RAYMOND JAMES COMMENTS TODAY
First Holes at Christie Lake Confirm Historic High-Grade Deposit
UEX released the first set of results – three holes – from the on-going C$2.75 mln drill program at its Christie Lake project in northern Saskatchewan. One hole cut a significant interval of high-grade uranium, confirming the location and tenor of mineralization at Paul Bay, one of two deposits on the property. As one of the more exciting exploration campaigns in the Athabasca Basin this year, we eagerly anticipate further results from the program this summer and encourage investors to add to positions in advance of this potential stock-moving catalyst.
Solid Confirmatory Result. Hole 92 intersected 10.2 m of 4.3% eU3O8 starting at 495 m core depth, including 1.7 m of 21.7%, just below the unconformity in basement rocks at the Paul Bay deposit. The hole confirms historic drilling from two decades ago and the high-grade nature of the deposit. While by the strictest definition 92 is within the footprint of Paul Bay and thus an ‘in-fill’ hole (see Exhibit 3), the closest known mineralized holes are 35 m away – a fairly significant distance in the world of high-grade Athabasca Basin deposits – further proving-up the zone.
Other Holes. The two other holes, 90A and 91B, deviated from their intended targets. Despite the holes wandering off design, they still intersected minor levels of uranium (including 9.1 m of 0.38% in 90A), providing additional support for the mineralized extent of the area. While deviation to such a degree is unusual in Athabasca sandstones (the basement rocks are typically more problematic), these three holes are the first ‘true’ angled holes at Christie Lake and we understand the deviation issues are now understood and under control, as evidenced by hole 92 hitting its target.
Plans Going-Forward. Chemical assays confirming the above preliminary results (eU308 grades were generated from down-hole gamma probe) are due over the next several weeks. Drilling has been temporarily paused for spring break-up but should resume in about a month. The current budget considers 13-18 holes for 10,000 m total, so we expect 10-15 holes for ~8,000 m over the balance of the year starting in May. Primary targets will be to expand the mineralized footprint of the deposits, particularly the potential down-dip extension of now-confirmed mineralization within basement rocks that were largely untested by historic drilling. Beyond having significant contained metal potential (historic exploration dogma was to view basement material as ‘shut down rock’), the crystalline basement is a preferred host for mineralization given generally easier mining than unconformity/sandstone deposits and typically superior metallurgical characteristics.
Christie Lake Refresher. UEX owns 10% of the Christie Lake project today and can earn up to 70% by paying vendor JCU a further C$5 mln and spending C$15 mln on the project by the end of 2019. Christie hosts a significant portion of the ground straddling the northern extension of the P2 Fault, the primary host structure of the ~700 Mlbs (past production and current resources) McArthur River mine. Christie hosts two deposits, Paul Bay and Ken Pen, which both sit along this P2 fault and together host 20.9 Mlbs grading 3.22% U3O8 in historic resources (1997). Defined pounds sit at or just below the sandstone-basement unconformity, ~420 m vertically below surface and there is a further 1.5 km of confirmed, mineralized strike length beyond the two