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Athabasca Uranium (TSX-V: UAX / OTCQX: ATURF) has acquired multiple properties in the uranium-rich Athabasca Basin, all of which are near or adjacent to some of the world's largest uranium deposits and mines, and its first-ever exploration program is underway.
The company recently completed a Z-TEM airborne survey. This is the same type of advanced geological survey used to target some of the most recent major discoveries in Athabasca including Denison's Wheeler River Project, Fission's Waterbury Lake Project, Hathor's Roughrider Zone and JNR/Denison's Moore Lake Project.
After correlating existing data, it has now moved on to ground-based Magnetoteulleric (MT) surveys to further refine and interpret the highest potential drill targets.
At this rate of progress, Athabasca Uranium plans to have the diamond drills turning before spring is over and complete an aggressive program expected to include 30 to 36 total drill holes by the end of summer.
Perhaps best of all, Athabasca Uranium recently completed a $2.8 million financing deal at 35 cents per unit (38 cents per flow-through unit) to fully fund its program - all while the Japanese earthquake sent uranium stocks temporarily tumbling.
Now with a post-Japan bottom in of 20 cents per share, uranium shares rebounding, and an aggressive exploration program underway, Athabasca Uranium is perfectly positioned to show the markets what it has really put together over the past year.
A New "String" of World Class Uranium Deposits
The key to Athabasca Uranium's massive potential is its sizeable stake in the heart of the most prolific uranium-producing region in the world, Saskatchewan's Athabasca Basin.
In the Athabasca Basin it only takes one discovery to make it big in uranium because the deposits tend to be enormous.
And Athabasca Uranium has acquired multiple claims near the world's largest uranium deposits.
The map of Athabasca Uranium's property shows how the major discoveries in the Basin tend to appear like "beads on a string" and how it has acquired multiple properties on a proven "string" of deposits:
(View full presentation here)
The image shows how Athabasca Uranium's exploration properties are right along a major trend line in the Basin which has produced many of the largest deposits in the region.
Some of the largest uranium mines and deposits in the world were discovered on the Inner and Outer Trends.
On the southern end of the Inner Trend is McArthur River, the world's largest uranium deposit which contained 335.5 million pounds of uranium and is operated by major producer Cameco. The Key Lake Mine, which historically produced more than 200 million pounds of uranium, is also right on the same trend.
The northern end of the Inner Trend is just as impressive. This area hosts both the Cigar Lake Mine and the Midwest Mine. They both contain sizeable and economical high-grade uranium resources estimated at 209.3 million pounds and 41.7 million pounds, respectively.
The Outer Trend, which hasn't been explored as intensively as the inner trend, shows similar potential. For example, the Outer Trend hosts the Moore Lake discovery, which is being developed by Denison Mines and JNR Resources into the largest open pit uranium project in the Athabasca Basin.
The Outer Trend is also where a lot of the most recent uranium discoveries have been made and is where Athabasca Uranium has numerous properties right in line with the other discoveries.
Athabasca Uranium's key properties are as follows:
McCarthy Lake – covers 4,082 hectares immediately adjacent to the Denison Mines/JNR Resources' South Cigar Project. It's just 10 km away from UEX Corp's large low-grade West Bear Deposit, 40 km from the McArthur River Mine and 29 km from the Cigar Lake Mine.
East Key Lake - covers 749 hectares of prime uranium exploration territory which couldn't be located any better. The property is just over 15 km east of the historic Key Lake Mine and is adjacent to Hathor's Russell Lake and Triex's Highrock projects.
McGregor Lake – covers 18,699 hectares and is three miles east of the Moore Lake deposit. The electromagnetic anomaly from Moore Lake also runs onto the McGregor Lake project.
Webb River – covers 5,386 hectares and is near the MacArthur River Mine and the Outer Trend's Harrigan Zone.
All of Athabasca Uranium's properties are near or adjacent to significant discoveries and early exploration surveys show very similar results to the other big discoveries along the Outer Trend.
These properties also have a few additional features which make them even more attractive.
Reducing Risk in a Risky Business
Athabasca Uranium is concentrating on exploring its high-potential targets with a focus on minimizing risk and maximizing reward.
There's not a better place to be doing it than on the properties it has acquired in the Athabasca Basin either because of the geological reconnaissance technologies that are effective in the region.
For example, the latest and greatest in geological exploration technology for this region is the Z-TEM (Z Axis Tipper Electromagnetic) survey - expensive maybe, but highly effective.
Geotech Ltd. describes Z-TEM as "an innovative airborne electromagnetic system which uses the natural or passive fields of the Earth as the source of transmitted energy… excellent resistivity discrimination and detection of weak anomalies due to the nature of the natural electromagnetic fields."
Almost all of the most recent significant uranium discoveries in the Athabasca Basin have come shortly after Z-TEM surveys were completed. As mentioned above, Denison's Wheeler River Project, Fission's Waterbury Lake Project, Hathor's Roughrider Zone and JNR/Denison's Moore Lake Deposit, were all discovered in part by using Z-TEM surveying.
Athabasca Uranium spent more than $600,000 to take the Z-TEM survey across all of its properties, but the results of the survey could easily pay for itself as the company moves onto the next stage of pre-drilling exploration - Phase Two Magnetoteulleric (MT) and resistivity ground surveys to further identify and refine targets - which is currently underway.
Big Year Planned for 2011
Athabasca Uranium's extensive efforts are coming together with exceptional timing as the company should be able to realize its true potential in the next few months.
The company has planned an aggressive exploration program for 2011. It currently plans to drill between 30 and 36 holes, starting (weather permitting) sometime in June 2011.
The exploration program is fully funded. Athabasca Uranium has $4.8 million cash in the bank and almost $4 million of that must be invested in further exploration this year in order to meet its flow-through financing obligations.
That $4 million is going to go a long way too. The preliminary targets are in sandstone which hosts the Basin's other major uranium deposits and through which drills tend to travel quickly and cost-effectively.
Also, the survey results and past exploration confirm that most of the uranium is likely to be discovered at depths of between 60 meters and 220 meters on these properties.
As a result of all this, Athabasca Uranium (and the markets) will learn a lot very quickly as it progresses through the program.
Still though, despite its numerous properties in the right spots, high cash position, and aggressive plans, the entire company is valued at less than $10 million.
Share Structure:
Common Shares Outstanding: 41,806,366
Warrants Outstanding: 28,133,616
Options Outstanding: 2,575,000
Fully Diluted Shares Outstanding: 72,514,981
Market Value (@23 cents per share): $9.6 million
Management
Gil Schneider - President & CEO, Director – has more than 32 years of management experience. He is the founder and former CEO of Kinetex Resource Corporation and a director of AgriMarine Holdings inc. and AXEA Capital Corp.
Peter Born, PhD, P.Geo - VP Exploration – has more than 30 years of technical experience in Canadian and U.S.-based junior and senior resource companies. Born has extensive experience in uranium exploration with a focus on the Athabasca and Thelon (NWT) Basins.
D. Barry Lee, BA - Chairman & CFO – brings more than 20 years of senior management and Merger and Acquisition experience. Lee was the founder and former co-chairman of Canadian Phoenix Resources Corp. and also the co-founder and former COO of Choice Resources Corp.
Ken Maddison, FCA – Director – a former partner at KPMG (retired 1997)with more than 30 years audit and business advisory experience. Maddison was elected a Fellow of the Institute of Chartered Accountants of British Columbia in 1975. He was formerly a director and officer of Northern Continental Resources, a uranium exploration company.
Steven Bruk, BA – Director – has extensive management expertise in the resource sector. Bruk has significant experience in corporate finance for natural resource and technology industries. He was co-founder and formerly president and CEO of Choice Resources Corp.
The Bottom Line
Athabasca Uranium (TSX-V: UAX / OTCQX: ATURF) is well-positioned to have a big year in 2011.
It has multiple projects along a confirmed uranium deposit-bearing trend, all of which are within a few kilometers or immediately adjacent to some of the world's largest uranium deposits and mines.
It has completed a Z-TEM survey and is in the process of completing an electromagnetic ground survey to compliment the Z-TEM survey and produce the highly-defined, high-probability drill targets used by most other successful uranium exploration companies in the region.
It has sufficient cash to execute its aggressive exploration program, including drilling that will start in late spring 2011.
It's a well-kept secret, having yet to have a bump in its share price since getting its start in the Basin.
Finally, at a less than $10 million market cap, it is valued at a fraction of its peers which have already made discoveries in the area.
You can follow Athabasca Uranium's (TSX-V: UAX / OTCQX: ATURF) development at www.athabascauranium.com.
Sources:
Athabasca Uranium Web Site
Athabasca Uranium Presentation
McArthur River, Key Lake, and Cigar Lake Resource/Production
Midwest Mine Resource
Moore Lake Deposit
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