Uranium shows new signs of life

Five months after the devastating blow dealt to uranium markets by the earthquake and tsunami that damaged Tokyo Electric Power Co.'s Fukushima Dai-Ichi power station in March, global markets are showing signs of life as miners in Nunavut report encouraging drill results and exploration activity.

Uranium spot prices remain depressed by Japan's ongoing nuclear crisis - down 24 percent since the week before the March 11 event - and leading uranium producers are predicting significant declines in world consumption of the mineral over the next 20 years due to the curtailing of nuclear energy development programs around the globe.

However, demand for uranium is still projected to outstrip supply. China and India the world's fastest-growing economies, also gave the commodity and the prospects of uranium miners worldwide a boost in May.

Soaring energy demand from the two economic powerhouses is projected to lead a 46 percent increase in uranium consumption by the world's five biggest atomic-power developers by 2020, according to data compiled by Bloomberg.

China's Nuclear Energy Association said May 12 it will boost atomic capacity as much as eight times by 2020. A day later, India's Atomic Energy Commission said it will increase production 13-fold by 2030.

With prices stabilizing and prospects looking up for consumption, Canada is well-positioned for uranium mining. While it is no longer the world's largest producer of uranium since being overtaken by Kazakhstan in 2009, Canada is still No. 2 and continues to be a major exporter of the mineral to the United States, which imports more than 90 percent of its uranium consumption. Second only to Russia's 23 percent share as a U.S. supplier, Canada provided 22 percent of the 46.6 million pounds of yellowcake brought into the United States in 2010.

Saskatchewan is the primary uranium-producing region of Canada, but Nunavut is emerging as a highly prospective frontier for new uranium deposits.

High-grade ore at Angilak

Kivalliq Energy Corp. is one of Nunavut's most active uranium explorers. The Vancouver, B.C.-based junior provided an update Aug. 11 on its exploratory diamond drilling program at the 225,000-acre (91,054 hectares) Angilak Property in the Kivalliq Region of central Nunavut.

Angilak, Kivalliq's flagship project, hosts the Lac Cinquante Deposit and nine other high-priority target areas. With an NI 43-101-compliant inferred mineral resource of 810,000 metric tons grading 0.7963 percent U3O8, totaling 14.15 million lbs U3O8 (17.5 lbs U3O8/metric ton) at a 0.263 percent U3O8 cut-off grade, Lac Cinquante is Canada's highest grade uranium deposit outside of the Athabasca Basin in Saskatchewan.

By comparison, the Kiggavik deposit in Nunavut's Thelon Basin to the northeast of Angilak, has a resource of 127 million pounds U3O8 in ore grading 0.55 percent. That's enough uranium to meet 100 percent of Canada's electricity needs for five years.

From 2008 through 2010, Kivalliq invested C$12 million at the Angilak Property, C$9 million of which was spent on exploration, new camp construction, and related studies. The explorer planned a more aggressive two-phased, C$17 million exploration program for 2011, including 20,000 meters of diamond drill core in up to 100 holes focused on expanding and potentially upgrading the Lac Cinquante resource and 15,000 meters of reverse circulation drilling to test more than 30 target areas.

The continuing 2011 drill program at Angilak now totals 14,795 meters in 99 diamond drill holes and an additional 4,422 meters of reverse circulation drilling in 62 exploratory holes.

Diamond drilling to date has largely focused on the Blaze Zone located about 2 kilometers (1.24 miles) west of the high-grade Lac Cinquante uranium deposit and resource expansion along strike to the east and west of Lac Cinquante.

Among the latest drill results, assays from holes 11- BZ-011 through 019 returned significant uranium-copper-silver-molybdenum mineralization. Holes 11-BZ-016, 017 and 019 intersected 0.63 percent U3O8 over 5.6 meters, 0.4563 percent U3O8 over 8.4 meters, and 0.6063 percent U3O8 over 6.3 meters, respectively.

The Blaze Zone was drilled over 100 meters strike length with mineralization intersected down to 126 meters, and it remains open along strike and to depth. A total of 2,694 meters of NQ drill core from 19 drill holes have investigated mineralization at Blaze, with assays from all of the 19 holes drilled to-date now reported.

Holes 11-BZ-001 through to 11-BZ-015 were drilled at azimuth 035 degrees from five locations at 25-meter drill section intervals across the 100-meter strike length targeted. Core logging suggests initial setups may have drilled sub-parallel to some of the mineralized trends. Therefore, two additional setups drilling azimuth 180 degrees for holes 11-BZ-016 and 11-BZ-017, and at azimuth 130 degrees for holes 11-BZ-018 and 11-BZ-019, respectively, were drilled oblique and perpendicular to earlier holes in order to determine structural controls and estimate true widths of mineralization.

Mineralization occurs as pitchblende with occasional disseminated and patches of sulphide in quartz-carbonate veins and breccia, often with moderate hematite alteration, primarily around fractures. There appear to be two separate zones (upper and lower), occurring as clusters of semi-stockworked quartz-carbonate stringers and veins in brecciated carbonate-hematite altered host rock, crosscutting the southwest dipping sequence of metabasalt, metagabbro and metatuff.

In holes 11-BZ-011 through 019, these upper and lower zones of varying mineralized widths are separated by 27 to 40 meters of unaltered metavolcanics. Most notable is hole 11-BZ-016, which intersected 0.63 percent U3O8, 1.31 percent copper, 74.3 grams per metric ton silver and 0.35 percent molybdenum over 5.6 meters. This hole crosscuts hole 11-BZ-010 assaying 1.01 percent U3O8 over 25.4 meters (reported June 20), and suggests the true width of this intercept to be roughly 4 meters.

In addition, hole 11-BZ-017 intersected 0.45 percent U3O8, 0.30 percent copper, 73.3 g/t silver and 0.31 percent moly over 8.4 meters; and hole 11-BZ-019 returned 0.60 percent U3O8 over 6.3 meters. The relationship of these holes to other high-grade intercepts is unknown at this time.

"The Blaze zone discovery clearly demonstrates the exploration potential at the Angilak Property, especially within close proximity of the high-grade Lac Cinquante deposit," said Kivalliq Energy CEO Jim Paterson. "Continued drilling at Blaze will be needed to better delineate this occurrence, and for possible inclusion in future resource calculations."

The latest assay results are from holes 11-BZ-011 through 019 of 19 diamond drill holes that have tested the Blaze Zone in 2011. These intervals build on the success of hole 10-NE-001 drilled at the Blaze Zone at the end of the 2010 season.

Additional assays are pending from the results of this diamond drilling, including from the recently discovered Western Extension zone announced by Kivalliq July 21.

Airborne and ground geophysical crews, as well as a prospecting crew, have been mobilized to the project to advance target areas defined by the 2010 program with a combination of airborne (5,400 line kilometers) and ground geophysical surveys (1,250 line kilometers) to generate new targets across the Angilak Property.

The junior also plans to revise and update its current inferred NI 43-101 resource by the second quarter of 2012.

Keeping good company

Forum Uranium Corp. Aug. 10 reported the start of its 2011 exploration program at its North Thelon Project, a strategically located land package covering more than 400,000 acres (161,878 hectares), including the Tarzan and Nutaaq claims. Vancouver, B.C.-based Forum owns 100 percent interests in the mineral claims, subject to a 2 percent net smelter returns royalty on the Tarzan and Nutaaq claims.

Forum said it plans to drill 2,000 meters during the field season, initially focusing on the Tarzan property located just to the south and on strike from Areva's deposits.

The North Thelon Project virtually surrounds the world-class Kiggavik mine development project where French uranium miner Areva and partners Japan Canada Uranium and Daewoo hops to produce as much as 8 million pounds of U3O8 annually beginning as early as 2017.

North Thelon is also located immediately south of Tatiggaq, a uranium discovery reported by leading uranium producer Cameco in April.

Cameco has been actively exploring its property to the west of Areva since 2005, and both Cameco and Areva are currently proceeding with aggressive drill campaigns this summer in this newly emerging mining camp, Forum said.

Tatiggaq is located 5 kilometers (3 miles) west of Areva's Andrew and End deposits and only 2 kilometers (1.24 miles) north of Forum's Tarzan property boundary.

Reported grades from Cameco's Tatiggaq range from 12.4 meters at 0.21 percent U3O8 to 10.0 meters at 3.52 percent U3O8 at depths ranging from 114-182 meters and the deposit remains open in all directions.

Forum said the Tattiggaq discovery, along with Areva's Andrew and End deposits, are strongly influenced by the regional-scale N070 trending Andrew Lake fault.

The junior recently acquired Inuit-owned land parcel BL-32 from Nunavut Tunngavik Inc., which is on the westerly strike extension of the Andrew Lake fault. Forum has the right to earn a 100 percent interest in the IOL parcels in addition to rights to earn a 55 percent interest in claims held by Agnico-Eagle Mines Ltd.

Another Cameco discovery along this trend is Qavvik, located about 7 kilometers (4.4 miles) to the east of Forum's Inuit-owned land parcel BL-32. Grades at Qavvik range from 1.4 meters at 1.5 percent U3O8 to 19.9 meters at 0.52 percent U3O8 at depths ranging from 145-356 meters, and the deposit remains open in all directions.

The Andrew, End and Cameco discoveries all have very similar geophysical characteristics: They lie within a magnetic low, a resistivity low and a gravity low along a major structure or one of its offshoots.

Forum said it will complete a gravity survey on BL-32 in 2011 in preparation for a future drill program. Gravity surveys are designed to identify zones of lower density hydrothermal alteration, which are typically in spatial association with uranium deposits.

The Tarzan property has at least eight similar targets; five of them remain untested after the junior's limited drill program in 2008. Of three targets tested by shallow drilling, Forum said all of them showed moderate to extreme alteration and structure, similar to the Areva deposits and Cameco discoveries. Drill hole TZ-04 on the Tarzan property returned 22 parts-per-million U3O8 and anomalous pathfinder elements over 79.5 meters and was terminated prematurely due to difficult drilling conditions.