Hathor’s grades at Roughrider place it firmly among uranium juniors to watch in 2011

by Richard Badauskas

http://www.proactiveinvestors.com/companies/news/10977/hathors-grades-at-roughrider-place-it-firmly-among-uranium-juniors-to-watch-in-2011-10977.html

Monday, December 20, 2010

Hathor Exploration (TSX-V:HAT) holds a number of strategic uranium properties located within the eastern side of the Athabasca basin in northern Saskatchewan. This corridor accounts for 100% of Canadian uranium production and approximately 20% of worldwide primary uranium supply. Discovered in the late 1960’s, the Athabasca Basin remains the preeminent exploration district in the world for high grade uranium deposits, with mines that operate at grades 200 times the world average; 200 times.

Terra Ventures (TSX-V: TAS) retains a 10% interest, and is free carried to completion of a bankable feasibility study.

Athabasca uranium deposits are single commodity. Pitchblende occurs as massive replacements, veins and breccias. Deposits occur within the Proterozoic Athabasca Group sandstone, at the basal unconformity, or within basement Archean or Early Proterozoic gneisses or granitoids. Deposits in the basement are typically narrow and steeply dipping, with average grades of less than 5 % U308. Deposits at the unconformity are typically flat lying, with spectacular grade, averages 15 – 20% at McCarthur River and Cigar Lake.

Roughrider and Roughrider East occur almost entirely in the basement,. The current resource at Roughrider is defined within an area that is 220 meters long, 100 meters wide and carries a mineralized zone 50 - 60 meters thick.

Hathor Exploration recently released an upgraded resource estimate based on two seasons of drilling, following the initial report completed in December, 2010. The updated Resource Estimate for Roughrider includes a High Grade Zone with an Indicated Resource of 58,200 tonnes at 10.68% for 13.7 million pounds of U3O8 and an Inferred Resource of 36,600 tonnes at 13.07% for 10.5 million pounds of U3O8, for a total of 24.25 million pounds of U3O8 at an average grade of 11.7% U308. The surrounding lower grade material at Roughrider provided an Indicated Resource of 336,000 tonnes at 0.48% for 3.55 million pounds of U3O8, and an Inferred Resource of 7,000 tonnes at 0.31% for 48,000 pounds of U3O8.

Approximately 60% of the ore is in the indicated category, and 99% is amenable to open pit extraction, with the top of the deposit situated at a depth of 215 meters, and nearly all of it located in basement rock.

Leach tests confirm that approximately 98% of the U3O8 can be recovered and assays confirm low arsenic values and the presence of cobalt, copper, molybdenum and nickel, some of which may provide additional credits.

A complete technical report to N43-101 standards is expected to be completed and filed on SEDAR in early January.

The total Resource Estimate currently stands at 27.8 million pounds of U3O8, in a 220 m long deposit that runs more or less east west. Based on magnetic maps and early drilling, there is additional potential along strike to the northeast for at least 100 meters, and will be evaluated for additional resources.

But the most significant upside potential for the overall resource on the project lies at Roughrider East, located just 200 m away. Roughrider East is only partially drilled, with open ended strike line of at least 220 meters.

Drilling at Roughrider East continues to produce truly spectacular grades; drill hole MWNE-10-648 interested 63.5 meters at 7.75% U3O8, including 17.5 meters at 24.28% along with the highest individual assay recorded on the property to this date of 87.2% U3O8. This 63.5 meter intersection is near to the true structural thickness of the mineralized zone, and attests to the overall high grade nature of the resource. A resource model for Roughrider East will be evaluated in January. A formal resource estimate will be completed in the spring if possible, or in the fall if more data are required from the upcoming winter drilling program. .

A very large resistivity anomaly starting at Roughrider East runs off to the southwest, and has been measured at about 700 meters in length. A regional resistivity survey covering the strike line from Roughrider and Roughrider East, clearly shows a signal at Roughrider East that is at least twice the size of the signal that is displayed at the Midwest Deposit, located 5 kilometers to the southwest on the same strike line.

The Midwest Deposit contains an Indicated Resource of 350,000 tonnes at 5.50% for 42.9 million pounds of U3O8. An additional resource at the Mae Zone located on the same strike line, lies 2 kilometers to the southeast of Roughrider, and contains 10.1 million pounds of U3O8 at an average grade of 5.46%. The Midwest and Mae Zone resources are part of a joint venture between Denison Mines (TSX: DML, NYSE AMEX: DNN), AREVA Resources (Euronext Paris: CEI), and OURD Canada.

An open pit mine was proposed at Midwest, but in 2008 capital cost estimates blew out to approximately $652 million, and the project was shelved pending higher uranium prices. The same group owns the McLean Lake Uranium Mill, which can process 12 million pounds of uranium oxide per year. This mill was engineered to process high grade ore and is currently shut down due to lack of feedstock.

Hathor Exploration’s Roughrider carries grades that are at least twice as rich as those found at Midwest, and currently has open ended potential for additional high grade resources. The deposit is also well located for infrastructure, close to local highways, airports, power lines and both the McClean Lake (AREVA) and Rabbit Lake (Cameco) mills. Roughrider is an obvious candidate for a major uranium producer to acquire, given it’s attributes for long term, low cost production.

The company’s other uranium projects include Russell Lake, which is located in the southeast corner of the Athabasca Basin. It is surrounded by McArthur River with 450 million pounds of U3O8, Millennium with 50 million pounds, Key Lake with 190 million pounds, and Phoenix Deposit (Wheeler River) with 39 million pounds near the eastern property boundary of Russell Lake.

HAT started 3,000 meters of diamond drilling at the end of September at Fox Lake, Christie Lake and M Zone Extension prospects within this claim block, drilling to depths of 400 meters to reach unconformity. Results released in early December are encouraging, and an aggressive drill program is planned for the upcoming winter drill season.

A joint venture is also in place with Forum Uranium Corp (TSX-V: FDC) on the Henday Property, which is 8 kilometers to the north of Roughrider. A winter drilling program of 14 holes on 3 targets is planned. The unconformity depth is only 160 meters, and uranium grades of up to 0.178% have already been recovered from earlier drilling at Mallen Lake, in association with strong clay alteration. Areva has also found uranium grades of 5.93% over narrow intervals in the Mallen Lake region.

Hathor’s resource base at Roughrider has tremendous potential to grow via delineation of Roughrider East. Indeed any takeover premium will be influenced by the extraordinary richness of the grades at Roughrider and surrounding deposits, and the excellent exploration potential of it’s early stage properties at Russell Lake and Henday.

In combination with projections for further increases in the price of uranium, 2011 should prove to be an exciting year for Hathor.