Major uranium discovery in Athabasca Basin catalyst for strong partnership
Canada’s Athabasca basin, located in northern Saskatchewan and a small portion of northern Alberta, has become somewhat of a legend for uranium production worldwide.
Vast amounts of uranium have been uncovered over the past few years, especially in the West McArthur and Fox Lake areas. CanAlaska Uranium Ltd.’s recent discoveries, alongside those of Cameco Corporation, have resulted in successful partnerships—their newest could be most rewarding for shareholders.
A leading uranium producer, Cameco has quietly revealed its substantial uranium discovery at Fox Lake earlier this year. The site is located just eight kilometres west of Cameco’s existing McArthur River mine. Fox Lake’s current resources are 68.1 million pounds based on 387,000 tonnes at 7.99 per cent U3O8, a relatively high-grade given that most uranium mines worldwide average less than 0.10 per cent U3O8.
The rich grades of uranium in the Athabasca are why all mines in the basin were cash flow positive in 2015, unlike uranium operations elsewhere in the world, according to a March study by mining consultants CRU.
The project generator, Peter Dasler, president and CEO of CanAlaska, is pleased to share an interest in the junior's West McArthur project with Cameco. With the help of Cameco, CanAlaska will be able to explore its discoveries further. “We’re very pleased to have Cameco doing the drilling on our targets,” he said. “If they find something that is large, there is more than enough room for multiple companies to move in.”
CanAlaska’s West McArthur project is next to Fox Lake and is geologically similar, including comprising conductors (mineralized structures) that commonly host uranium. The McArthur River mine already holds the title of the world’s largest high-grade uranium discovery, so the neighbouring property of Fox Lake promises potential. “The area is not physically the largest, but it is rich with uranium,” Dasler said. “It is 100 times richer than most other uranium deposits in the world.” Given the proximity of Cameco’s Fox Lake to CanAlaska’s West McArthur, Cameco believes the mineralization at Fox Lake continues into the adjoining property.
CanAlaska negotiated with Mitsubishi—more specifically, MC Resources, a subsidiary of Mitsubishi—winning its interest in 2006 and the first investment in West McArthur. After a negotiated buyout of MC Resources' 50 per cent interest in 2016, CanAlaska and Cameco came to an agreement for Cameco to spend $12.5 million on the property to earn a 60 per cent interest. The deal includes a minimum of $1 million of work in the first year and the two have already started the first drilling.
Dasler explained the program: “They’re spending $12.5 million to evaluate the continuation of the Fox Lake zone into an area where we had drill success, but they will also be evaluating a second zone which we also think is very important—Grid 1. So in this first part of the program, Cameco will be testing two separate targets on this property.” The two companies expect to find evidence of large uranium-bearing systems once they start drilling. “We think West McArthur has very substantial targets and are hoping for further success from Cameco’s drill team.”
The West McArthur site has been a target of interest since 2004, so CanAlaska’s president is excited to see how far operations have come. Clocking in at a grand total of 35,829 hectares, the West McArthur site is in the heart of the highly prospective Wollaston rock belt and located near some of the largest and richest uranium deposits in the world. This site is expected to hold a fantastic amount of uranium.
While MC Resources and CanAlaska completed many progressive exploration programs on the site from 2006 to 2013, Fukushima’s nuclear accident put a hold on the project. The new partnership with Cameco will help CanAlaska fund the recently revisited exploration of the site.
“We are fortunate to have a partner like Cameco who is helping us explore,” said Dasler. With their combined efforts, a new discovery is closer than ever.
New high-grade uranium deposits in the Athabasca can fill a void for stability in terms of nuclear power production. “People who build and run nuclear power plants want a secure supply. The existing mines in the area have been very profitable for Cameco and its partners even in times of low prices and have shown their longevity. Add to this the stable and safe political environment, then we have a discovery location of choice,” Dasler said.
The West McArthur site is one of CanAlaska’s 18 projects on the docket right now. The company is currently looking for partners to help fund these promising projects.
“We’ve found the targets; we just need someone to start drilling,” Dasler said.