CanAlaska Uranium Announces Exploration Programs at Two Highly Prospective Energy Metals Projects
It has been a busy start to 2019 for CanAlaska Uranium Ltd. (CA: CVV – $0.31, US: CVVUF – $0.24, GER: DH7N – €0.20), as the strategically held, 33 million share , Company has issued a trio of news releases this week and is gearing up to commence drilling programs at two separate projects. In the first of these, CanAlaska announced it has engaged the contractor to start a drilling program at the Manibridge Nickel project in Manitoba. In addition, the Company reported plans for a highly anticipated 7,000 metres drill program at its West McArthur uranium property.
Drilling Work Scheduled for Breakthrough Uranium Discovery in Athabasca Basin
CanAlaska is about to embark on a significant drilling program focused on the West McArthur uranium project in Saskatchewan. This large property is ideally situated near existing mines in the Athabasca Basin, considered the top uranium production district in the world. The Athabasca Basin has even been referred to as ‘The Saudi Arabia of Uranium’ since so much uranium (“energy”) production is concentrated within this geographic area. This week the Company reported that it has finalized plans with JV partner Cameco Corp, for drilling work to be carried out in summer 2019.
In the main target, identified as Grid 5, a breakthrough discovery was achieved in August 2017 along a structural corridor where multiple intercepts of uranium were encountered in the first three drill holes. These included an exciting interval of 5.5 meters with an average grade of 1.51% uranium oxide. The current round of exploration will follow up on this initial success with a program of ten drill holes totaling 7000 metres of drilling work. Drilling is expected to be underway in June, and continue for perhaps 100 days to complete the program.
As part of its commitment to earn a 30% interest in the property, Cameco funded the recent $5M of exploration activity. The property is now run as a joint Venture with CanAlaska as 70% owner and the operator of the program. Of note, Cameco operates the McArthur uranium mine, located roughly six kilometers to the east of the West McArthur property. McArthur is the richest uranium mine in the world, and it is practically on the doorstep of the West McArthur property. In 2016 Cameco found a further high grade uranium deposit at Fox Lake, very close to the West McArthur property boundary so this was the attraction for Cameco to partner with CanAlaska at this early stage of resource discovery.
At least 10 high profile targets have been defined on the West McArthur property so far, within an established trend of uranium-bearing alteration that is on strike with the high grade Fox Lake deposit, and near the McArthur mine. Similarities in rock units, plus the earlier success achieved to encounter attractive uranium grades in preliminary drilling last year, illustrates the potential upside for the ongoing exploration effort. The JV arrangement to identify new resource zones may therefore evolve into a much more significant development opportunity if further attractive uranium mineralization is established on the property.
Drilling Work Set to Commence at Manitoba Nickel Project
Located within the Thompson Nickel Belt, which is considered to be the 5th largest sulphide belt in the entire world, Manibridge is an advanced project with a number of high priority drill targets already defined through extensive geophysical surveys and the results of previous drilling activity on the property.
The primary target of this current round of drilling work is a high grade nickel structure extending approximately 400 metres, within a larger trend 1,200 metres in strike encountered in prior drilling work on the property. CanAlaska plans to complete a series of drill holes for a total of 1,000 metres of diamond drilling in the area.
CanAlaska controls three properties comprising a total of 16,000 hectares within this promising district. Manitoba is highly regarded as a jurisdiction for mineral exploration and there are a number of significant nickel mines in the area, including currently active and formerly producing operations. The boundary of the Manibridge project is adjacent to the formerly producing Manibridge Nickel mine.
The base metals leverage from the properties controlled in this area provides an added measure of internal diversification for CanAlaska. Nickel has been trending higher as demand increases for batteries for Electric Vehicles (EV’S) and new industrial applications are projected to increase demand. A successful round of drilling work at Manibridge is bound to help the Company to serve the role as a project generator and attract new partners to its three properties in the region. A LOI for Manibridge is in place with Canada Metals, and discussions are underway to arrange a JV agreement that would also include future funding for the project.
Highly Talented Geoscientist Appointed to Serve as Chief Operating Officer
In another positive news item this week, CanAlaska confirmed the appointment of Cory Belyk to serve as Chief Operating Officer. A professional geoscientist with a background spanning 30 years of experience on behalf of mining companies, Belyk has been directly involved with exploration and development of uranium resources in the Athabasca Basin and other high priority districts worldwide. This includes the high profile position with Cameco Corp, serving as Director of Exploration for the international division in Mongolia and Australia.
Of greater relevance, Belyk was part of the management team with Cameco participating in the Fox Lake uranium discovery within the Athabasca basin. Thereafter he worked with CanAlaska to advance exploration at the West McArthur project that ultimately achieved another significant uranium discovery last year, just four kilometres further along strike in this prolific district.
Considering the extensive base of exploration knowledge demonstrated by Belyk, along with his superb track record of successful uranium discovery in the Athabasca basin, CanAlaska is fortunate to have recruited the services of an individual of his stature to lead the exploration effort of this focused junior. In addition, the decision for Belyk to accept this role validates the attractiveness of the exploration prospects controlled by the Company and the potential for additional resource discovery that lies in the future.
The portfolio of property assets held by CanAlaska provides investors with a wide range of resource leverage including uranium, base metals, and diamonds. In order to build value from these high quality prospects the Company must continue effective exploration to establish deposits, and also seek partnerships with other companies that may contribute to the advancement of these projects. With the news releases issued this week, CanAlaska is addressing both of these objectives.
The next round of drilling to get underway in Saskatchewan at the West McArthur project may expand on the initial uranium discovery and advance the status of this exploration partnership towards gaining potential economic clout.
Similarly, the drilling work set to immediately commence in Manitoba at the Manibridge property represents a focused drilling program that may elevate the stature of the project if the target zone yields at least one high grade discovery interval. A successful result will assist towards developing new partnerships. It would also contribute speculative interest in the potential for a new nickel deposit to emerge as further work is completed at this project.
Exploration activity builds speculative appeal and contributes to news flow. High grade discovery success at either drilling program would likely make the shares of the Company much more attractive for investors and it is not unusual for a very good drill core interval to trigger a large boost to its share price.
The recruitment of a new COO is another positive development that should support greater confidence in the ongoing exploration activity going forward. Effective leadership from a strong management team is one of the most important criteria for a junior explorer to achieve success. With the high quality property portfolio controlled by CanAlaska it is a necessity to achieve successful exploration results in order to build long term shareholder value from these projects.
Given the formidable challenge associated with drilling deep targets in the Athabasca Basin and the positive work history that Belyk enjoyed in his previous work within the district, he is the ideal person to guide the Company through the next critical phase of exploration about to get underway.
CanAlaska is making a bold statement to announce two separate drilling programs early this year, each with the potential to deliver significant results. The low number of shares issued (33M), and anticipation of pending good news from this work, with the potential for subsequent exploration work to follow later in the year, should support the share value as the work gets underway. Smallcaps Recommendation: BUY.
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