Article from on Crosshair from Minesite
Feature Story
Date: November 18, 2004
Crosshair Exploration Acquires An Intriguing Uranium Prospect In Labrador.
By Robert Wallace
We’re keeping up with developments in uranium mining here at minesite.com. The “yellowcake age” article on minesite on 10 September was followed by coverage of Australia’s shooting star Paladin Resources three days later. Across the world, miners and investors are seeking ways to join in what is becoming an increasingly widespread search to find, develop and invest in near-term deposits of uranium oxide.
Current annual global mine production is around 92 million lbs but projected demand is at the 170million lb level. The spot price has now accelerated to over US$20 /lb up from $7.1 in 2002. Utilities wanting to contract for uranium supplies have to pay north of $25/lb as a starting point. Canada’s Cameco, Australia’s ERA and France’s Areva control over 45 per cent of the world’s uranium supplies. Cameco’s stock price has almost doubled in the past year and there are indications that the buoyant market for nuclear power may even lead the French government bring forward plans to privatise the 96 per cent of Areva in State hands.
Because exploration for uranium has been neglected for some 20 years while the market has been severely over-supplied, one of the best ways to find the mineral now is to go back to the deposits identified in the 1970s and 80s but never developed then when prices slumped. The latest junior involved in developing uranium via this route is Vancouver-based Crosshair Exploration and Mining.
Crosshair, named after the target sight on a gun scope or an archery cross, claims to be “an aggressive gold and precious metals exploration and development company”. In two years of operation it has forged a joint venture with Rubicon Minerals which has secured interests in some 2,500 claims grouped into four gold projects in Newfoundland. One of them is adjacent to the Placer Dome/Rubicon Jaclyn gold discovery and surface sampling, trenching and limited drilling has so far given encouraging results for all four projects. It also has nascent operations in China where it has a Canadian geologist and a Chinese banking specialist sourcing properties and prospective joint ventures. All very well, but not quite enough to make it stand out from its peers amongst the 700 or so other thrusting Canadian juniors quoted in Toronto.
On 15 October, however, Crosshair announced the acquisition of the Moran Lake property in central Labrador. The property consists of 67 claims covering 1,675 hectares located 135 kilometres north of Goose Bay and 75 kilometres southwest of tidewater at Postville, covering advanced uranium targets in the highly prospective Central Mineral Belt of Labrador. The well-documented Kitts and Michelin deposits owned by the Altius Minerals/Fronteer joint venture are some 65km away in the same Belt. Crosshair’s property hosts significant uranium deposits as well as having potential for polymetallic IOCG (Olympic Dam-type iron oxide copper gold) mineralization. It was extensively drilled by Shell Canada Resources back in the 1970’s and has effectively lain dormant since then.
The acquisition is from Lewis Murphy, a private prospector vendor who has owned the property for many years. Crosshair can earn a 90 per cent interest by spending C$3,000,000 in exploration and by paying the local vendor a total of C$525,000 in cash and issuing 1.5 million shares over the term of the 5 year earn-in agreement of which 500,000 will be issued upon regulatory approval.
Significant uranium mineralization is known to exist at Moran Lake in at least two zones, "B" and "C", and includes a number of high-grade intersections drilled by Shell including: 0.313% uranium oxide over 12.20 meters including 0.562% over 3.99 meters; 0.239% over 4.40 meters; and 0.202% over 3.34 meters. These high grade intersections are from the Upper "C" Zone where Shell reported a geological resource of 500 tonnes (1.1 million pounds) of contained uranium oxide based on drilling carried out in1977-79. The resource is located within 75 metres of surface and the deposit is open to the west and to depth. The estimates are taken from Shell’s original assessment reports still on file at the Department of Natural Resources in St. John's, Newfoundland.
Shell also reported that the Lower "C" Zone, located several hundred metres north of the Upper "C" Zone, has a possible resource of 2,236 tonnes (4.92 million pounds) of contained uranium oxide based on 17 drill holes with an average grade of 0.027%, a thickness of 60 metres and a strike length of 1,000 metres. A total of 55 shallow drill holes were collared of which 35 were in the Upper "C" Zone and 20 in the Lower "C".
Of course all the historic resource estimates were completed by Shell before the implementation of National Instrument 43-101. Interestingly, numerous radioactive core samples remain un-sampled to this day from several “C” zone drill holes. Crosshair considers that all the 1970s work was carried out under standard industry practices in use at that time but stresses that independent verification of the data has not yet been performed and the estimates should be treated as at best indicated resources at this point.
No resource estimates has been completed for the B Zone mineralization, located 3 kilometres northeast of the "C" Zone. However drill intersections of 0.197% uranium oxide over 3.06 metres were reported from the zone. In addition, significant polymetallic mineralization grading 0.087% uranium oxide, 0.28% copper and 13.23 g/t gold over 11.8 metres have been returned from chip sampling surface mineralization in the "B" Zone. Grab sampling reported from a 2003 property visit by the Moran Lake vendor has returned 0.295% copper, 1.2 g/t silver and 1.03 g/t gold, indicating the "B" zone could contain significant gold values.
No assaying for gold has ever been carried out and there is potential for the property to host significant gold enriched intrusion-related or IOCG -type mineralization. Crosshair is in the process of compiling and digitising the relevant data from the previous exploration programmes and will re-log the Shell drill core currently in storage at the government core library in Happy Valley-Goose Bay.
All in all quite an evaluation handful for Timothy Froude, Crosshair’s General Manager and Chief Geologist for the Newfoundland projects and his team, especially as the majors should soon be jostling to joint venture future development. Shell’s oilfield resources are famously under question today; it will be interesting to see if its abandoned uranium discoveries at Moran Lake turn out to be a legacy of ripe fruit it will miss harvesting.
The writer has a holding in this company