Explorer seeks uranium, gold deposits

The quest for uranium that led to the creation of Uranium North Resources Corp. to explore Nunavut five years ago continues today, despite plummeting demand for the mineral after the partial meltdown of Japan's Fukushima Dai-Ichi power plant in March.

But the nimble junior, having noted soaring demand for gold in recent years, had already seized the initiative to also hunt for the precious metal on many of the very same Nunavut properties where it sought uranium. As a result, Uranium North is one of a few exploration-stage companies working in northern Canada with a dual focus on uranium and gold opportunities.

Describing itself as positioned in uranium and leveraging gold, the junior currently has four active uranium projects, including the 19.3-million-pound U3O8 Amer Lake deposit, and five gold projects, including the highly prospective Mallery Lake Gold Project where it recently discovered gold while looking for uranium.

Uranium North mounted 2011 exploration programs with a total budget of C$3.1 million this summer aimed at doubling the uranium resource at Amer Lake, advancing its Kam and Hawk uranium properties to resource estimates and targeting gold, silver and copper mineralization on five drill-ready properties.

Focus on uranium

Uranium North President and CEO Mark Kolebaba described his company recently as being undaunted by recent events in the uranium sector.

"We're really excited about uranium. We think uranium will start to move again in the next six to 12 months, maybe 18 months," he said.

Cameco Corp., the world's largest uranium producer, apparently agrees that the future is bright for yellowcake. In late August, it took its US$530 million bid for Hathor Exploration Ltd. to that company's shareholders after negotiations failed to lead to a purchase agreement. The offer represented a 40 percent premium even as uranium prices fell below levels reached in the aftermath of the Japan disaster. Hathor has said it is talking with other potential buyers.

Purchasing the junior would be Cameco's biggest-ever acquisition, giving it control of Hathor's promising Roughrider uranium deposit in the Athabascan Basin at a time when others are questioning the future of nuclear energy.

For Uranium North, the future could be bright on two fronts.

"Though Nunavut is remote, it is very much underexplored," Kolebaba said. "A lot of stuff is on the surface and easy to find. We're trying to discover new uranium districts, and there aren't that many places on the planet where you can still do this," he added.

An independent NI 43-101-compliant resource estimated for the Amer Lake deposit in 2009 not only delineated the significant inferred resource, it also outlined immediate expansion potential to 38 million pounds U3O8.

Using a cut-off of 0.01 percent U3O8, the report said an inferred resource of 19.3 million pounds at a grade of 0.04 percent U3O8, or 9.7 million pounds U3O8 at a grade of 0.09 percent, using a 0.05 percent U3O8 cut-off was defined for Amer Lake.

The report concludes that the deposit remains open to the south and east and that it potentially could be greatly increased with continued drilling in those directions. Further, it suggests that the current Main Zone resource may be understated and that more infill drilling may increase the mineral resources as it appears to be under sampled by the historical drilling. The report provided a target of 38 million pounds U308 at a 0.01 percent U308 cut-off to 20 million pounds U308 at a 0.05 percent U308 cut-off.

With only 20 percent of the Main Zone explored on the Amer Lake property, Uranium North said earlier this year the deposit's resource could easily hit 80 million pounds of U3O8 at a target grade of 0.08 percent (1.76 pounds per metric ton).

Amer Lake is a sandstone-hosted uranium deposit with possible localized higher grade, structurally controlled uranium mineralization. It is believed to be similar to the Mkuju River deposit in Tanzania, which has a resource of 101.4 million pounds averaging 0.04 percent U3O8.

Uranium North Sept. 1 reported completion of its 2011 exploration program at Amer Lake, with 15 reverse circulation holes drilled to a maximum depth of 201 meters southeast of the deposit's inferred resource. The company hoped to double the deposit's inferred resource to 40 million lbs U3O8 this year.

Twelve of the drill holes reported elevated and anomalous scintillometer readings, while three holes did not reach their target depth due to drilling difficulties.

"The anomalous and elevated counts-per-second readings suggest the 2011 Amer Lake program successfully expanded mineralization at the Main Zone to the southeast," Kolebaba said. "The lab will allow us to determine to what extent we are able to increase the current resource."

Wealth of expertise

Uranium North's management certainly has the chops to succeed in its quest, if any exploration team does.

Kolebaba participated in the discovery of the first 120 kimberlites at the Ekati Diamond Mine in Northwest Territories and was responsible for the initial discovery of the Hope Bay Gold deposit in Nunavut. He also currently serves as president and CEO of Diamonds North Resources Ltd. which has acquired one of Canada's largest land positions. This work resulted in the discovery of the Amaruk project and nearly 4 million acres of uranium prospective ground, which serves as the foundation for Uranium North's portfolio.

In addition, Daniel Faure, the company's technical advisor, has been actively exploring uranium for over 40 years, and is credited with leading the team that discovered the Cigar Lake deposit during his tenure as president of Cogema's Canadian subsidiary, S.E.R.U Nucleaire Canada Ltd. Cigar Lake in the Athabasca Basin is the world's largest undeveloped high-grade uranium deposit.

In 2002 as consultant to UEX Corp. on the Raven-Horseshoe deposit, Faure was responsible for re-interpreting the GULF drilling data that led to the development of a potential economic deposit.

While employed by TOTAL Mining and Nuclears' in Australia, he also identified the Georgetown Inlier in Queensland as having high uranium potential.

This ultimately led to the discovery of the Ben Lomond deposit.

Later he moved to Columbia, South America as president of a subsidiary created to assess uranium potential of that country.

New focus on gold

Uranium North initiated a low-cost strategy recently to generate gold and base metal opportunities from its large proprietary geochemical and geophysical databases. The identification of gold at Mallery Lake, Kam and Aura are the first of several gold projects being developed.

Earlier this year, the company said it moved to rapidly advance the Mallery Lake, F13, An, Nowyak and Robin gold prospects from grassroots ideas to drill-ready projects. All of the prospects are located within highly prospective underexplored regions of Nunavut.

At Mallery Lake, the company commenced drilling a 1,000-meter program in July designed to test the width and strike characteristics of some five mineralized zones where rock samples returned assays up to 54.2 grams per metric ton gold and 272 g/t silver. The company had identified high-grade gold and silver-bearing veins in a 125-meter-wide by 450-meter-long quartz stockwork on the property, and hoped to evaluate the nature and distribution of gold in the veins and host rock and to test the distribution and frequency of the mineralized veins.

A 1,000-meter drill program was planned for 2011 on the Nowyak gold and silver property. The company July 19 reported phase 1 exploration at Nowyak was under way. The phase 1 program comprised prospecting, geophysical surveying and geological mapping to assist in target selection for a phase 2 drill program, which was scheduled to begin in August.

"Our data review at Nowyak has resulted in the identification of several high priority target areas and exploration concepts. This program will test these ideas and confirm targets for drilling later in the season," Kolebaba said.

Uranium North also planned prospecting, mapping, sampling and geophysics work on the F13, An, and Robin properties in preparation for drilling the gold targets it identifies.