UEX Corporation (“UEX” or the “Company”) is pleased to announce that it has signed an Option Agreement with JCU (Canada) Exploration Company Limited (“JCU”) that will allow the Company to earn up to a 70% interest in JCU’s Christie Lake Project (the “Project”), an exceptional advanced uranium property with world class location, known high grade uranium mineralization and significant upside discovery potential. The terms of the Option Agreement are consistent with the terms outlined in the October 26, 2015 Letter of Intent entered into by UEX and JCU (see UEX press release of October 26, 2015).
The Christie Lake Project is located only 9 km northeast and along strike of Cameco’s McArthur River Mine, the world’s largest uranium producer (see Figure 1). The P2 Fault, the controlling structure for all of the McArthur River deposits, continues to the northeast beyond the mine. UEX believes that through a series of en-echelon steps, the northeast strike extension of the P2 Fault not only crosses the Project, but also controls the two known uranium deposits on Christie Lake, the Paul Bay and Ken Pen Deposits (see Figure 2).
The ultimate size of the Paul Bay and Ken Pen Deposits has not been fully defined. The deposits are estimated to host a combined 20.87 million pounds of U3O8 at an average grade of 3.22% U3O8 and were discovered in 1989 and 1993 respectively. (This is a historic resource estimation which does not use resource classifications consistent with NI 43-101. The historical resource estimate was presented in an internal report titled Christie Lake Project, Geological Resource Estimate completed by PNC Tono Geoscience Center, Resource Analysis Group, dated September 12, 1997. The historical resource was calculated using a 3‑D block model using block sizes of 2 m by 2 m by 2 m, and block grades interpolated using the inverse distance squared method over a circular search radius of 25 m and 1 m height. Specific gravities for each deposit were averaged from specific gravity measures of individual samples collected for assay. UEX plans to complete additional infill drilling on the deposits during the option earn-in period to upgrade these historic resources to indicated and inferred. A qualified person has not done sufficient work to classify the historic estimate as current mineral resources or mineral reserves. UEX is not treating the historic estimate as current mineral reserves or mineral resources.)
Both deposits occur at and just below the unconformity with relatively shallow basement roots along the controlling fault structure. Deeper down-dip continuations of these deposits following the new basement-hosted uranium deposit models have not been tested as all exploration activities were suspended 18 years ago, long before these deposit settings were well understood.
“As our technical team continues to uncover the secrets of the Paul Bay and Ken Pen Deposits, it has become abundantly clear that the down-dip extensions of the deposits have yet to be defined by drilling. Some holes believed to have closed off part of the Paul Bay Deposit do not in fact extend deep enough to test the main mineralized structure. We also see evidence of cross-cutting mineralized structures that will be high priority targets for future drill testing. Based on the number of high quality exploration targets we are generating, it is clear that UEX’s first few exploration campaigns will be exclusively focused on growing the existing deposits,” stated UEX’s CEO and President Roger Lemaitre.
UEX will immediately mobilize a drill crew to the field to initiate a $2.5 million drill program focused upon expanding the current deposits with drilling expected to commence in late February. Drill and camp contractors have been selected with all required permits needed to conduct the exploration program in hand.
Beyond the immediate deposit areas, uranium mineralization is also found almost continuously along the unconformity over a 1.5 km long strike length extending northeast and along strike of the Paul Bay and Ken Pen mineralization. UEX believes there is great potential to make additional uranium deposit discoveries through follow-up of these mineralized holes, as drill holes have not yet tested down-dip of the fault structure at the same locations in the basement fault where the Paul Bay and Ken Pen deposits are located. Seven high priority exploration targets have been identified along this 1.5 km long mineralized trend and will be a focus of UEX’s future exploration activities
Terms of the Agreement
The signing of the Option Agreement grants UEX the exclusive right to earn up to a 70% interest in the Christie Lake Project.
UEX and JCU have agreed that UEX shall make staged payments totaling $7,000,000 to JCU (including the $250,000 payment upon signing of the Letter of Intent) between January 28, 2016 and January 1, 2020. UEX has also agreed to fund $15,000,000 in exploration expenditures on the Christie Lake Project over the same period of time (see the table below).
|Date||Cash Payment||Exploration Work Commitment||UEX Cumulative
|Upon signing of the LOI||$ 250,000||$ -||-||%|
|Before January 28, 2016||1,750,000||-||10.00|
|Before January 1, 2017||2,000,000||2,500,000||30.00|
|Before January 1, 2018||1,000,000||2,500,000||45.00|
|Before January 1, 2019||1,000,000||5,000,000||60.00|
|Before January 1, 2020||1,000,000||5,000,000||70.00|
|$ 7,000,000||$ 15,000,000||70.00||%|
UEX will earn an incremental interest in the project for each annual cash payment and exploration work commitment completed. Should UEX continue to meet its cash payments and exploration work commitments under the schedule, UEX will earn a majority interest in the project before the end of 2018. UEX will be the operator of the Project throughout the earn‑in period.
To view Figure 1 (Christie Lake Location Map), Figure 2 (Christie Lake Project – Closeup with P2 Fault & Paul Bay Mineralization), Figure 3 (Paul Bay Deposit Area) please access this news release on UEX’s website at www.uex-corporation.com.
Qualified Persons and Data Acquisition
Technical information in this news release has been reviewed and approved by Roger Lemaitre, P.Eng., P.Geo., UEX’s President and CEO who is a Qualified Person as defined by National Instrument 43-101.
UEX (TSX:UEX, OTC:UEXCF.PK, UXO.F) is a Canadian uranium exploration and development company actively involved in sixteen uranium projects, including four that are 100% owned and operated by UEX, one joint venture with AREVA that is operated by UEX, as well as nine joint ventures with AREVA, one joint venture with AREVA and JCU (Canada) Exploration Company Limited, which are operated by AREVA, and one project to be under option from JCU (Canada) Exploration Company Limited and operated by UEX. The sixteen projects are located in the eastern, western and northern perimeters of the Athabasca Basin, the world's richest uranium belt, which in 2014 accounted for approximately 16% of the global primary uranium production. UEX is currently advancing several uranium deposits in the Athabasca Basin which include the Kianna, Anne, Colette and 58B deposits at its currently 49.1%-owned Shea Creek Project, the Horseshoe, Raven and West Bear deposits located at its 100%-owned Hidden Bay.
UEX’s Hidden Bay and Shea Creek projects, have mineral resource estimates as follows:
UEX Corporation – Indicated Mineral Resources (1) (2) (3)
|Shea Creek (2)||2,067,900||1.484||67,663,000||33,222,533|
|Hidden Bay (3)||10,372,500||0.160||36,623,000||36,623,000|
UEX Corporation – Inferred Mineral Resources (1) (2) (3)
|Shea Creek (2)||1,272,200||1.005||28,192,000||13,842,272|
|Hidden Bay (3)||1,109,200||0.111||2,715,000||2,715,000|
- (1) The mineral resource estimates follow the requirements of National Instrument 43-101 – Standards of Disclosure for Mineral Projects and classifications follow CIM definition standards.
- (2) The Shea Creek mineral resources were estimated at a cut-off of 0.30% U3O8, and are documented in the Shea Creek Technical Report with an effective date of May 31, 2013 which was filed on SEDAR at www.sedar.com on May 31, 2013.
- (3) The Hidden Bay mineral resources were estimated at a cut-off of 0.05% U3O8, and are documented in the Hidden Bay Technical Report with an effective date of February 15, 2011 which was filed on SEDAR at www.sedar.com on February 23, 2011.
JCU is a private company that is actively engaged in the exploration and development of 15 uranium assets in Canada. JCU is owned one-third by ITOCHU Corporation, one-third by Mitsubishi Corporation, and one-third by Overseas Uranium Resources Development Co. Ltd. (“OURD”), which are all Japanese companies. OURD acts as the manager of JCU. JCU has partnerships with UEX, AREVA, Cameco, Denison and others on uranium exploration and development projects in the Athabasca Basin of Northern Saskatchewan including Millennium and Wheeler River and Alberta, and in the Thelon Basin in Nunavut such as Kiggavik.
FOR FURTHER INFORMATION PLEASE CONTACT
President & CEO
This news release may contain statements that constitute "forward-looking information" for the purposes of Canadian securities laws. Such statements are based on UEX's current expectations, estimates, forecasts and projections. Such forward-looking information includes statements regarding UEX's mineral resource and mineral reserve estimates, outlook for our future operations, plans and timing for exploration activities, and other expectations, intentions and plans that are not historical fact. The words "estimates", "projects", "expects", "intends", "believes", "plans", “will”, “may”, or their negatives or other comparable words and phrases are intended to identify forward-looking information. Such forward-looking information is based on certain factors and assumptions and is subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking information. Important factors that could cause actual results to differ materially from UEX's expectations include uncertainties relating to interpretation of drill results and geology, additional drilling results, continuity and grade of deposits, participation in joint ventures, reliance on other companies as operators, public acceptance of uranium as an energy source, fluctuations in uranium prices and currency exchange rates, changes in environmental and other laws affecting uranium exploration and mining, and other risks and uncertainties disclosed in UEX's Annual Information Form and other filings with the applicable Canadian securities commissions on SEDAR. Many of these factors are beyond the control of UEX. Consequently, all forward-looking information contained in this news release is qualified by this cautionary statement and there can be no assurance that actual results or developments anticipated by UEX will be realized. For the reasons set forth above, investors should not place undue reliance on such forward-looking information. Except as required by applicable law, UEX disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise.
Cautionary Note to United States Investors
This news release has been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of U.S. securities laws. Unless otherwise indicated, all resource estimates included in this press release have been prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy, and Petroleum Definition Standards on Mineral Resources and Mineral Reserves. NI 43-101 is a rule developed by the Canadian Securities Administrators which establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Canadian standards, including NI 43-101, differ significantly from the requirements of the United States Securities and Exchange Commission (“SEC”), and resource information contained herein may not be comparable to similar information disclosed by U.S. companies. In particular, and without limiting the generality of the foregoing, the term “resource” does not equate to the term “reserves”. Under U.S. standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. The SEC’s disclosure standards normally do not permit the inclusion of information concerning “measured mineral resources”, “indicated mineral resources” or “inferred mineral resources” or other descriptions of the amount of mineralization in mineral deposits that do not constitute “reserves” by U.S. standards in documents filed with the SEC. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. U.S. investors should also understand that “inferred mineral resources” have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an “inferred mineral resource” will ever be upgraded to a higher category. Under Canadian rules, estimated “inferred mineral resources” may not form the basis of feasibility or pre-feasibility studies except in rare cases. Investors are cautioned not to assume that all or any part of an “inferred mineral resource” exists or is economically or legally mineable. Disclosure of “contained pounds” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC standards as in-place tonnage and grade without reference to unit measures. Accordingly, information concerning mineral deposits set forth herein may not be comparable with information made public by companies that report in accordance with U.S. standards.