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Uranium Exploration On-Track in Canada’s Athabasca Basin

Omri Wallach Omri Wallach, Stockhouse
0 Comments| June 26, 2020

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Click to enlargeThe recent increase in spot uranium prices was eye-opening for many mining companies and investors. After languishing for years, spot uranium climbed above US $30/lb, what many described as the resistance threshold.

Now that prices have held onto their gains, excitement about the potential recovery of uranium is in full swing. Despite the COVID-19 pandemic holding many operations back, business has picked up; acquisitions, restarted negotiations, and exploration programs are in full swing.

That’s also the case in Canada’s most well-known uranium district, the Athabasca Basin in Northern Saskatchewan. Home to some of the largest uranium deposits in the world, activity in the area has notably picked up over the last month as the uranium market has started to recover. With most long-term forecasts and experts expecting a heightened need for uranium supply, the race is on to find deposits similar to existing strong resources.

Recently, Canadian-based resource company Azincourt Energy Corp. (TSX-V:AAZ, OTC:AZURF, Forum) set out to explore the East Preston uranium project further, in which the Company is earning up to a 70% interest in a joint venture with Skyharbour Resources (TSX-V:SYH) and Dixie Gold Inc. (TSX-V:DG). On June 8, Azincourt announced results of its recent drilling program at East Preston, and the findings of promising basement lithologies, graphitic structures and anomalous Rare Earth Element (“REE”) mineralization pointed favourably to similar mineralization in other uranium deposits in the area.

(Image via Azincourt Energy)

Stockhouse Editorial recently caught up with the President & CEO of Azincourt Energy, Alex Klenman, to break down the results and ask about the Company’s next steps.

Thank you for taking time to speak with us, Alex. Let’s get right into the recent drilling results at the East Preston uranium project. What were the findings?

Alex Klenman: As in the first few holes we drilled in the winter of 2018-19, we’re seeing the right basement unconformity uranium setting. Right rocks, graphitic content, structure, and alteration. What we found suggests that mineralizing fluid systems were active on the project, at the right time. Basically, we’re seeing even more evidence that the geological environment is correct or appropriate for what we’re hunting, and that’s uranium deposition.

One of the highlights is that the highly enriched rare earth element zone is similar to the Wheeler River Project of Denison Mines, can you elaborate on the significance?

AK: What we found appears very similar to sandstone-hosted REE mineralization associated with uranium deposition at the Wheeler River project in the eastern Athabasca. One area in particular showed as much as 100 times normal background levels of Heavy REE. This could possibly represent a basement-hosted analogue to the sandstone-hosted MAW Zone REE mineralization at Wheeler River. Without getting too technical, and it’s easy to do here, the MAW Zone is surrounded by several mineralized zones and uranium deposits along strike and along sub-parallel graphitic-structural corridors, which is similar to what we see at East Preston. Basically, it’s believed to be a similar setting to what is seen above certain unconformity-type uranium deposits.

(Image via Azincourt Energy)

You’re working in the Athabasca Basin famous for basement-hosted unconformity related uranium deposits. Did the recent drilling results bring you closer to where you need to be?

AK: Yes, and the data certainly suggests we’re on the right path. We have the right setting, the right geochemical pathfinders, the right geophysical signatures, and there is significant uranium mineralization in the area. So, yes, we’re getting closer. We have a lot of targets left to test, and we’re confident we’re going to find what we’re looking for.

There seems to have been some confusion from investors regarding the drilling results. Do you feel that there was a misunderstanding of the purpose of the drilling program?

AK: The purpose, or the goal, is always discovery. Particularly nowadays. But let’s use a football analogy. You get the ball on your own 20, it’s first down, and now you’ve got to march down field to score. Scoring a touchdown on the first one or two plays is possible, but statistically speaking, doesn’t happen all that often. Football fans know it’s a process. It takes time. What you want is to gain ground. We’re gaining ground with each drill program, and we’re only 12 holes in. That’s’ about 3000 meters of drilling on a large project footprint. We’re still on our own side of the field, but we’re certainly getting closer to the goal.

Of course, one of the recommendations from the results is an immediate follow-up program in the summer. What would the scope of the program be?

AK: First, based on the recent drilling results, detailed follow-up drilling will be done. Particularly along the existing A- and B- zones, where the most suggestive results have so far been obtained. We have additional target areas that have yet to be drill tested, so we’d like to get into prioritizing the targets for the next round of drilling. In the near term a summer work program is currently being planned. We’re looking at a number of geophysical surveys to refine, prioritize, and better locate conductive corridors more precisely in several of the currently untested areas. We need to spend about $150,000 or so and then we will have met the 70% earn-in spend requirements of our joint venture with Skyharbour and Dixie. It’s important we tick that box off sooner rather than later.

(Image via Azincourt Energy)

Looking at the uranium market over the last few weeks, we’ve seen strength that hasn’t been there for a while. What is your take on the state of the market?

AK: Supply-demand is at the core of what makes the uranium market so attractive right now. The spot price has been significantly below the cost to mine the material, which has resulted in operations at several large mines being suspended or cut, and with the pandemic, even more supply is now offline. The spot price naturally bumped. There are so many factors at play right now. Diminishing supply, supply chain disruption, long-term utility contracts expiring, record number of reactors in planning and construction, it’s like a rubber band that’s been stretched, waiting to snap. Take a look at what happened in 2006-7 and 2011 for recent examples of what a uranium bull is like. Something similar is in the cards, it’s just a matter of when that rubber band is going to snap.

Looking forward, has the strategy for Azincourt Energy in 2020 and beyond changed in any way? Where would you like to take the Company?

AK: We’re here to make a discovery. East Preston has all the pre-requisites. It ticks all the boxes for a top tier uranium exploration project. All of them. So, we just have to stick to the plan and drill are way through the target zones. Hopefully we get the game changing hole sooner rather than later. But we’re confident it’s there. A discovery will provide ample return for investors, and it will change the game for Azincourt.

You also have some uranium prospective ground in Peru, can you tell us your plans for your projects there?

AK: The Escalera Group is a 5,500 hectares grassroots project with some excellent historical numbers. Our work there has identified two new prospective uranium areas measuring an estimated combined 6.5 kilometers. In 2018 we conducted a prospecting program there and samples yielded results of up to 8,061 ppm uranium (0.95% U3O8). That’s significant. Others returned 6,812 ppm, 6,126 ppm, 3,560 ppm and 3,438 ppm uranium, with 11 coming in over 1,000 ppm uranium. The proposed uranium mineralization model is similar to the Plateau Energy Metals’ Macusani Uranium deposit, which sits about 100 kilometers to the northwest. We’re going to keep the option and continue to see what Escalera has, it’s shown the early results one needs to see.

Thank you taking the time to speak with us. Is there anything you’d like to add before we end?

AK: Just that I’d like to reiterate that we’re intent on discovery and we are going to do whatever it takes to get there. Grassroots exploration in the uranium space is a critical component in the supply side equation, and Azincourt is committed to the process. We have the right personnel, the right project, in the right place, at the right time.

FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.

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