Transcript: UEX Corp (UEX) - Technical Analysis & Due Diligence

By
Morgan Leighton
·
December 14, 2021

UEX Corporation has made significant advancements in the discovery and development of existing and new uranium and cobalt deposits in the Athabasca Basin. The company has four flagship projects.

The West Bear Cobalt-Nickel project is a shallow, open-pit amenable and very high-grade cobalt-nickel deposit in the eastern Athabasca Basin that remains open in all directions for expansion.  It ranges from 15 – 55 m in vertical depth and is hosted in clay-altered rocks that extend into the basement below the unconformity.

The Christie Lake property in the eastern Athabasca Basin is located only 9 km northeast and along strike of the McArthur River Mine, the world's largest uranium mine. The property is host to significant historical uranium resources within three known deposits, including the newly discovered Ōrora Zone, located along the under-explored mineralized 1.5 km long Yalowega Trend. UEX currently holds a 65.55% interest in the project in a joint venture with JCU (Canada) Exploration Company Limited.

The Horseshoe and Raven Deposits located in the eastern Athabasca Basin are in close proximity to existing mining infrastructure, roads, and power. UEX is currently evaluating the use of heap leach recovery to improve the economics of these very shallow conventional open pit and underground amenable deposits.The Shea Creek property is host to one of the largest undeveloped uranium resources in the Athabasca Basin.

The Shea Creek Deposits remain open for expansion and were the first of the new wave of discoveries in the newly emerging Western Athabasca Uranium Camp.

We Discuss:

00:00 – Company Overview

01:15 – Exploration Efforts: Geological Brains, Drilling Rigs, Internal Price Reference

08:25 – Grades, Mineralization, Fault, Localization, Efficiency, Sub-Vertical Structures

19:41 – Economic Potential: Starter, Planning for 2022, Discovery

24:10 – Christie Lake project, Expansion, Difficulty, Unconformity of Structure

29:31 – Mapping, Stress Orientations, Active Status, Announcements

31:35 – Expenditures, Operators, Project Sites, Growth Potential

36:01 – Overall Summary, Budget Figures, Estimates, Exploration Results

39:09 – Outro

Roger Lemaitre: Hi my name is Roger Lemaitre, I'm the President and CEO of UEX Corporation.  Today with me also is our Vice President of Exploration, Chris Hamel.  Wave Chris, UEX is a uranium explorer and developer focused primarily in the Athabasca Basin and I think what we bring to the table's a little bit different for our investors than say the usual uranium company that you do see out there.  We're a portfolio of opportunities, while we have several development ready projects or projects in development that we partner up with with other companies, we also span a portfolio of projects right from grassroots through up to those development ready projects and what we do is we give our investors the opportunity to be leveraged to the price of uranium because we have a large uranium and resource holding.  We're not the operator of the more shorter-term projects we're able to focus on growth through exploration, discovery on what we believe is one of the top portfolios in the top of junior explorers in the uranium sector to be working. 

Merlin Marr-Johnson: Roger, thank you that's a great introduction; Chris, nice to be on here with you.

Chris Hamel: Good morning Merlin, nice to meet you.

Merlin Marr-Johnson: Hi.  Now I've got a little bit of track record in the uranium space in that I worked in West Africa with Stephen Roman and George Flack on Global Atomic and I never really knew much about the Athabasca Basin and when I came to your presentation in the research for this meeting, I went through your videos, I spent a good bit of time on YouTube last night going through some of your presentations and I, you know it's an extraordinary portfolio and I'm so interested in what you're doing.  Before we get into the nitty-gritty perhaps of my questions, could you tell me what the thrust of your exploration efforts are going to be over the next, you know in 2022?  You know, where are you going to be putting your… where are you going to be focusing your geological brains and your drill rigs in the course of next year?

Roger Lemaitre: Very easily for us to focus in on 2 projects, our Christie Lake Project and our Hidden Bay Project and we're going to do very much our best efforts to get our partner Orano to help us work a little more at Shea Creek where things have been idle for a couple of years but we don't control that necessarily so we'll focus on with Hidden Bay which we think is one of the best basement hosted deposit trains in the basin and Christie Lake which is a relatively unexplored trend of the McArthur river deposit and that continues onto our property and it's still relatively underexplored. 

Merlin Marr-Johnson: And will the budgets for both of them be roughly equal or are you going to split it some other way between the 2, on Hidden Bay and Christie Lake?

Roger Lemaitre: Definitely more money into the Christie Lake angle of things, one of the… but not necessarily, that doesn't necessarily mean that we test less targets, in fact it's quite the opposite.  Hidden Bay is very, very shallow our deep holes there are 200m deep and that goes way into the basement terrain so we actually get a lot more mileage in terms of targets tested at Hidden Bay for a lot less money. 

Merlin Marr-Johnson: Okay, great and how deep are the holes that you're going to have to be drilling at Christie Lake, I mean what's just… I mean let's say your average hole depth is down to 200m in Hidden Bay, what are you looking at in Christie Lake?  Obviously there's water around as well so maybe barge drilling or winter drilling so…?

Chris Hamel: Christie Lake has between 400 and 420m of sandstone.  Not too much glacial overburden, somewhere between 30-50m if you end up on top. The beauty of that property is that there's very little obstacles in the way of lakes or ice drilling so you know, while we might have a few holes on the ice in 2022, the large component of the programmes going to be for land. 

Merlin Marr-Johnson: Okay, great thank you.  Now Roger perhaps, could you give me a kind of a bird's eye view of what's happening in the Athabasca Basin, in terms of there's a lot of activity on the east, there's a lot of activity on the west and how many mines are actually still operating in the Athabasca Basin?  Is it just McArthur River? 

Roger Lemaitre: Right now the only actual mine that's physically operating is the Cigar Lake mine which is the Cameco operation with Orano.  McArthur River mine is on care and maintenance because of the… you know until recently the price of uranium was so low and modern contracts were challenging.  Also the Lake mine, also Cameco, 100% owned project is idle, it's been idle for about 4 years now so it's in care and maintenance as well.  So those are the 3 operable mines in the basin right now.  We have the significant other opportunities that are… that the juniors are trying to develop.

Merlin Marr-Johnson: And they're all on the eastern margin, that's right? 

Roger Lemaitre: The mines are all on the eastern side, there has been one operation historically on the west side, that was… when I was the processor of Orano, it was called back in the early 2000s, in the late 90s was the Cluff Lake operation that they ran there for about 20, 25 years if I recall correctly and that's the only operation that's been on the west side.  Everything else has been on the east side.

Merlin Marr-Johnson: And is it going to be?  What sustainable uranium price do you expect is required before you see the MacArthur Rivers and Rabbit Lake coming back on?

Roger Lemaitre: I think realistically you're looking at a$50-$60 price but in a long-term sustainable contracting price to be incentivised to bring things back into production.   For Rabbit Lake it'll probably be a little bit higher, just because of the volume that goes through there versus the volume that goes through McArthur River.  But, and then you look at most of the operating opportunities out there, they're kind of the incentivised price you need to get there.

Merlin Marr-Johnson: So do you mentally explore the kind of $60/lb threshold as your… we're at 50, I mean what do you, when you start a kind of exploration discussion, what do you use as kind of your internal guide or internal reference? 

Roger Lemaitre: For the company or strategically wise?  We're very conscious about being positioned the lowest cost half of the cost group.  And I think in the uranium space if you're not the lowest cost half it can be painful and McArthur River is a very good example of that.  I mean its lowest cost quartile and it struggled 2 or 3 years ago with the uranium price when you don't have long-term contracts to support it and so if you wanted to not be more than just a swing producer, you want to be in an area that historically has been low cost half.  And I think it's pretty fair to say that almost every operations that's come to fruition in the Athabasca Basin since its inception back in the late 1960s has been in that low cost half.  There are obviously projects around the rest of the world on a one-off basis that would say, yeah this will fit low cost half as well.  But historically, usually discovery that's economic in the Athabasca Basin will fit that low cost half.  So that's part of our search strategy, of why we're focusing on the Athabasca Basin and then to, yes without a doubt looking at opportunities that are in the low cost half are very, very important to us.  Because it's just too hard, it's a very expensive proposition to build a mine, never mind a uranium mine, it's a long-term process as well with… just it takes a, probably a couple more years would take because of the regulatory angle of uranium, so you have to know that you're going to be able to be profitable and you come out the back end of that. 

Merlin Marr-Johnson: When you say the low-cost half, do you mean profitable below 50 or profitable below 60? 

Roger Lemaitre: I would say profitable below 50 to be fair.  You need to leave something on the table as well, most people who invest in mines, they would sure love to get their capital recovery as well so…

Merlin Marr-Johnson: Yeah, I mean it's hard to find, it's hard to find a uranium deposit that's profitable below 50.  I mean that's why there are so few development projects and that work at basically currently prices.

Roger Lemaitre: You're absolutely right and then the risk, you know, you have to be able to handle the risk of the flow of the markets and if you don't have that low cost half you're struggling and we've seen producers that emerged in the last cycle struggle and they couldn't leverage off that price.

Merlin Marr-Johnson: One of the features of the Athabasca are these extremely high grades.  You know, anywhere else in the world you talk about PPM, your ore content isn't… PPM/oz you know, in Namibia it's 200, maybe 400 PPM which is 0.04%, similarly in many parts of Australia.  In Niger it's slightly different, you know the grades are higher, you know 0.1% maybe up to 0.5% on average.  Maybe some portions are up to 1% which is 10,000 PPM but most of the Athabasca stuff that you see is much higher.  I know you've got Horseshoe and Raven which is 0.2, 0.1% but that's right at surface.  What are the challenges of those super high grades or anything… sorry let's ask another way.  At what grade are you going up?  0.3, 0.5, 0.7% your 308, at what grade does it become a challenge to conventional mining that you have to do things very differently?

Roger Lemaitre: There's 2 angles, one is the grade and one is the geological setting and the geological setting is a huge component of that, so deposits that form at the unconformity itself and they happen to be strongly altered and a lot of brittle fracturing through the fault zone have water challenges so it's not even as much the grade it could be the water challenges.  We've seen that happen at both Cigar and McArthur River, so that's one angle.  The grade angle, where things get more difficult probably starts to happen around the 2½-4% range depending on structure where you have to be a little more cautious of the radioactive issues, particularly radon  in exposure.  So that brings, you know slightly more remote mining techniques etc, moving slurries instead.  So the operating costs per tonne definitely go way up, of course there's a lot more pounds in there so it sort of works out.  But you know, historically and I would argue that Chris and I are both fans of the Eagle Point mine that Cameco run.  When that mine's run it really about what you can make on a per pound basis and your balance still seems off.  MacArthur River and Cigar and Rabbit Lake wouldn’t be that far apart on a cost per pound basis. 

Merlin Marr-Johnson: Because the high-grade offsets the greater cost of doing the high-grade material and the extra safety work that you need to do it.  And you mentioned kind of faulting and fracturing and that unconformity, is that a… you know when you get the mineralisation on the unconformity above the basement, at the bottom of the basin, is that a typically, are those typically strata form bodies that are laterally extensive?  How much, how poddy are they?  How much structural control is on them?  Once you're in it do you know that you can just… you've got a good run of delineating resources?

Roger Lemaitre: Chris, I'll let you answer that one.

Chris Hamel: Yeah.  Those, yeah the unconformity pods are really the classic, you know the classic Athabasca prototype or type deposits you know, and you'll get those at the of the fault and they can be laterally, you know across-strike you can see those for, you know it's typically 30-50m in an economic deposit.  Probably the outliner there would be Cigar Lake which is closer to 50m, whereas a typical unconformity deposit would be about 30m across-strike and you see that at Phoenix and then you can start really, you know for those unconformity deposits, for them to be economic you really want to trace them depending on grade of course; every answer that starts with an, it depends.  But you really want to start seeing those unconformity deposits above 500m sometimes more.  You know if they're high enough grade they can be somewhat less and that really helps us, you know with UEX we do have a lot of experience looking in the basement and we are excited about basement mineralisation and particularly when you get to deposits like at MacArthur River and Zone 2 at MacArthur River which was mined for about a decade.  You know the strike length of that deposit, being in the basement was only about 60m so you can build a lot of pounds in a very small place in those basement settings which starts to make them very attractive targets. 

Roger Lemaitre: Yeah I think just to go back to the Athabasca Basin, it's basically an old claw foot type bathtub filled with sand and that, then saturated sand so anything you want to do above the bottom of the bathtub from a mining point of view is subject to all that water that comes through the sand.  And so the cost to mine those tend to be higher.  You take that same amount of uranium and put it into something that more resembles a lode gold vein type deposit in the basement, in the cracks that were in that bathtub you have less exposure to potential water issues and so we're finding that those tend to be easily as economic, particularly when you have thicker sandstone cover.

Merlin Marr-Johnson: Okay, thank you that's a really good analogy.  Chris coming back to your… you said, you know depending on the fault.  Are you essentially saying that, let's say my hand is the bottom of the basin and you're saying there's always a single feeder fault or a dominant feeder fault through the basement which in-places the mineralisation proximal to that fault?

Chris Hamel: Yeah, yeah generally every deposit begins with a fault and yeah, much like you suggested you know if you have the bottom of the basin and the fault typically comes up to it, you know you're going to see it at MacArthur River, Cigar Lake, Christie Lake.  You know that's the, the fault's always the key and it's typically the, you know you see a lot of people talk about conductors.  When you hear about the Athabasca Basin and exploration companies you always hear about conductors and what the conductor represents is graphitic rocks that when you subject them to an EM survey, it forms a conductor and you know being that they're graphitic it's a plane of weakness so you end up with those nice long regional type features that can, you know when you apply the regional strain, those rocks will break preferentially and bring the reducing basement fluids, or basically the basement fluids into connect with the oxidised overlying sandstone fluids which are hopefully uranium bearing and you know that's when you start to see deposits.  Those are the areas where you see the deposits start to precipitate. 

Roger Lemaitre: We believe that the earth graphite forms a very efficient reductant that allows that uranium to be more efficiently removed from the hydrothermal solutions and probably the reason why you get the higher grades in the Athabasca is.

Merlin Marr-Johnson: Okay, so we've got the, kind of the physical and the chemical mechanisms for precipitating uranium in a specific point.  Let's bring it to your 2 projects that we're going to talk about, Christie Lake and Hidden Bay and do you use seismic to pick up the structure underneath?  Can you use mag to pick up the structure underneath?  What's your localising, how do you kind of centre in on a trend or a structure underneath whatever it is, 200m of cover?

Chris Hamel: Magnetics and airborne EM are very efficient methods are very efficient methods for inferring local geography or the, or the metasedimentary corridor if you will.  The corridor of metasediments that in the Athabasca Basin, typically the base of the metasedimentary units on top of the archean domes is typically where you see a nice unit of pelite that is graphitic and so those'll preferentially break.  And then also the competency contrast between the overlying pelites and the underlying archean dome also forms a very efficient competency contrast in terms of helping that structure for permeability going down into the basement as well.  So I hope that answers your question a little bit and was there another part that I'm missing?

Roger Lemaitre: There's a little bit of… some people have been using seismic in certain areas.  It's probably not the most efficient process, it's doable, it's probably not the most efficient, there's been a lot of money and effort put into it and I think we're seeing seismic in the Athabasca Basin usually in a really advanced stage and often helpful with my planning as well.  We're seeing some of that as well, where you do seismic work to see where the unconformity tops or highs are so you can say if you have to sink a shaft, it's a shorter distance through the sandstone but as an exploration tool, some people will swear by it but it's a very, very small minority.  For us on our Hidden Bay and Christie Lake projects, you know Hidden Bay is a pretty mature project in some ways and a very immature project in others.  So it's one of the oldest projects in the Athabasca Basin from an exploratory point of view and it was looked at exclusively in the past for classic, unconformity cigar like deposits like Chris was talking about straddling that boundary.  So we know where the corridors are already from mag and the actual drill holes, so for us it's about saying, oh no we know that everyone one of these basement deposits that form below the unconformity has at the unconformity so at Hidden Bay we're focused about chasing the smoke down into the basement.  And we have an extensive data base of drill holes that allow us to do that very efficiently without having to do lots of geophysics.  At Christie Lake we probably know where one trend is extremely well, we're still trying to figure out the other, so there's more EM and mag work down there in those projects.

Merlin Marr-Johnson: Can I just for my simple brain, can I just focus on Hidden Bay for the moment, otherwise I'll get more confused than I might otherwise be.  So you've got a lot of drill hole data, are you targeting a number of sub-vertical structures in the basement?  Is that kind of the main exploration target, so it's high-grade potentially… you know, we all hope for big tonnes but kind of most likely in the first pass it's going to be a relatively constrained tonnage if it's structurally controlled.

Chris Hamel: That's a really good synopsis yeah absolutely.  It's the basement structures and you know, Roger and I both have experience at Eagle Point and I think that, and you know also from our time at Cameco, you know we've seen deposits like Millennium as well, also a basement deposit and really, you know I think really that the discovery of Arrow, the Arrow Deposit in 2014 really, really helped kick a lot more people over into the idea that the basement deposits can host a lot of tonnage and be really significant and I'm not going to say that we're going go find an Arrow at Hidden Bay, but man that'd sure be nice.  In fact we do believe that there is the potential for that type of deposit there so.

Merlin Marr-Johnson: And what do you see as, I don't know kind of in a tonnage or a grade?  When do you say, okay we've got an economic potential here.  What are the metrics that you have in your head as this is turning out to be, even before PEAs, just to kind of thumbsuck, what do you think is a kind of an economic starter?  Does it have to 50Mlb at 2%?    

Roger Lemaitre: Maybe not necessarily 2%, 50Mlb is a pretty good start, especially in the east Athabasca Basin, particularly on our Hidden Bay Project where we have infrastructure, we literally bound up on 2 world-class mills so the bar is a little bit lower in terms of the economic threshold.  Could it be, I would argue that 1-2% is a pretty good average grade for a deposit in the basin but I think it depends on its geom… it does really depend a lot of its geometry and it's how close to surface it is and when I look at Horseshoe and Raven Project, only 0.2%, it's right at surface, no water issues, very simple mining technique so it starts to, I think your guideline is about right but then you have to look at each thing one off, against each other. 

Merlin Marr-Johnson: Okay and can you kind of summarise what you're planning for 2022 at Hidden Bay and where you'd like to get to.  You know, what would constitute success in your mind if you're kind of 6 or 9 month through next year?

Chris Hamel: Absolutely, you know the Hidden Bay Project for 2022, we want to go follow up some holes we drilled in 2021 on our fixing grid and that's an exciting target where there's actually a glacial train of uranium bearing boulders down of that area and when we started putting drill holes into that area in 2021 we very quickly started to see hydrothermal alteration and structural characteristics that are very similar to Horseshoe and Raven so that starts to get us really excited about the potential of that area in building resources in that area.  The other area where we want to work at Hidden Bay, we call that the Grid and it's a little bit farther to the south and UEX did some work there in 2015 and we'd like to go and follow up on some of that work as well as follow up on some of our target generation and evaluation of the old drill core has determined there's exploration potential in that area that we believe hasn't been followed up by the first pass drilling done in the '70s and '80s.

Roger Lemaitre: Success would like the first mineralised intersection on a new discovery on those 2 next year, on one of those 2 next year.

Merlin Marr-Johnson: I suffer, in my day job from being asked, when are you going to define a resource, you know a resource can take a while to come together, but you talk, Roger you've just mentioned the word discovery drill hole.  What looks like a discovery?  I mean because if I get Chris alone I bet he would say it would be as long as we get the hydrothermal stuff and we got some sniffs of mineralisation and we get some good grades coming through.  He would say, look this is enough to motivate the next campaign of exploration.  What would you classify as a discovery hole?

Roger Lemaitre: I'm going to let Chris answer that question because I think we'd have some Honestly, Chris can answer faster.

Chris Hamel: Yeah, you know last year we did, particularly at Vixen we did a first pass series of drill holes and we did have that out, that hydrothermal alteration and we did have that system and so you know that it satisfied that first pass prospectivity evaluation and so this year you know, we want to target some more re… we want to use more resources to evaluate that and so that's what success looks like for that fixing grid in that uranium, nickel sense target area.  And really success is a mineralised hole and we have our template very close to that area, is Raven and Horseshoe.  You know at our Raven and Horseshoe we can see mineralised intersections that are 10-20m wide in some cases and like you said, you know that are 0.1-0.2 grades.  So that's sort of what the lens with which we view what success looks like in that area and why we're excited about it, because it is less than 2km away from an area where we do have those defined resources.    

Merlin Marr-Johnson: Okay, okay great, thank you that really helps me put things in context.  Moving over to Christie Lake, you've got 3 kind of pods, or pearls on a string I think was the phrase you used in one of your videos Roger.  What's next?  Are you trying to expand one of those pearls or are you looking for the next pearl?    

Roger Lemaitre: I think I'll let Chris expand upon it a little bit more, I think just putting, sort of to set the table for Chris was more of a… it's really weird we've had the project for about 5½ years now and we did build a 5 year plan before we drilled our first drill hole there and our thoughts were very much along the lines of what we're thinking, along… there's 3, there's one big corridor and there's 3 perspective trends in that corridor and then there's another corridor to the south that hasn't seen a drill hole historically.  And our plan in year 1 was to grow the deposit at Paul Bay which was the known deposit there at the time and we did do that.  But we learned something and we thought there was no unconformity potential along that trend for classic Cigar Lake, unconformity deposit and we very quickly learned in year 1 that that was not true and that even with our due diligence review, what the core told us when we drilled holes, which we couldn't access because they'd [to the ground back in the past said, oh no there's a lot of unconfirmed potential here and we've focused the last few years on exploring that potential.  So now we're actually going to go back to year 2 of our original plan, which is looking along that trend for basement hosted deposits and then start to focus our efforts on the other 2 sub-trends that are within the corridor going back towards the MacArthur River mine.  But Chris, you may want to talk a little more of the detail over what we're trying to focus on. 

Merlin Marr-Johnson: Sorry, Chris before you jump in and Roger is that because the unconformity exploration was difficult?

Roger Lemaitre: No, no just because it was untested; it's always the easiest thing to explore for.  I mean while we're big advocates of basement deposits I don't think even the most ardent basement advocate like Chris and I will be would ever say, give up on the unconformity potential first.  You'd always test that first and so that's why we deviated the programme in year 2 to test that and it was successful, we did find a smaller deposit than Ororo on the unconformity trend and we continue to focus on that through to next year.  We would have done it faster in more robust uranium times, we did it very calculated and slow  because we were very conscious about size of exploration budgets over the last 4 years.

Merlin Marr-Johnson: Great, thank you.  And Chris yeah onto the basement, sorry for the interruption. 

Chris Hamel: Yeah no problem and you know that work over the, from 2016 through to 2021 has layered on a lot of additional data regarding the geology and particularly the structure and alteration.  Not only of the deposits at Paul Bay, Ken Pen and Ororo but also given us a lot of insights into the structural controls along the trend and you know, I think rather than going in and testing systematically along the basement, the information that we gather is going to allow us to be very precise with our targets and what we want to drill.  You know, the technical team here and I have been working on a plan for Christie Lake for quite some time and we're really excited to put this into action because we, you know one of the first things we did when we picked up Christie Lake and started drilling holes is we didn't get a geology map from the previous operators so we put together a geology map and we continue to refine that geology map along with the structure and the structural controls of these deposits.  We find that with every drill hole we put into it we're starting to see a lot of similarities between the deposits and some of the areas where there's sporadic basement mineralisation that hasn't been followed up and that really helps us with where we want to factor work in 2022. 

Roger Lemaitre: It's not like we're blinding testing, Chris and the team's got a model saying here's the structural controls, here's a spot of mineralisation in the basement, we test the unconformity, now we've got to go down plunge, I think it's down dip or down plunge of intersecting features.

Merlin Marr-Johnson: Down plunge of intersecting structure or intersecting structure with the unconformity?

Chris Hamel: Yeah so the way that I tend to see that if you take your fault again and really it's the idea of a structure coming across that controlling structure and forming that lineation that plunges down into the basement.  And not only do you, so in those instances obviously that lineation line is your primary target but quite often we see mineralisation in both, it's possible to see mineralisation in both planes, both up and down that crossing structure and also along the main graphitic fault as well so you know, those are both targets in that scenario for us. 

Roger Lemaitre: I think that every high-grade deposit in the Athabasca Basin, be it at the unconformity or be it in the basement occurs where the main trend is offset, is intersected, I want to say offset by subsidiary structures in a classic pattern. Our Shea Creek Project is a very good example of that.

Merlin Marr-Johnson: Yeah, okay, good.  And you've mentioned building a kind of geological map of the sub-surface and using the drill holes, presumably you're overlaying the mag on that as well.  And you've mapped out the main kind of stress orientations in that part of the basin, so you've got a handle on where those, the subordinate shears and the patterns come so you're using that combined dataset to target new resources there?

Chris Hamel: Yeah absolutely, I mean we've also got a very good data set for that project as well too, so you know if we, with every piece of information we have to help us with that interpretation so that the money is spent as best as possible really is how we think of it.

Merlin Marr-Johnson: Okay, and what are the… can you just describe to me the timings on that, you know when are you going to get started, are you able to work through the winter or is it a spring/summer programme?

Chris Hamel: We can work in the winter at Christie Lake and because of the majority of the drill targets, particularly along that Paul or Ororo Trend in the base… are reachable from land as well too so we can work in both this, the winter and summer, early fall seasons.  So  we have about a, in the winter there's about 100 day window, give or take and then you have about 120 days window in the summer in order to get out to those areas.

Merlin Marr-Johnson: So are you going to be active in this 100 day window? 

Chris Hamel: We hope to be yes.

Roger Lemaitre: Hope to be?  No we will be.

Chris Hamel: Okay, there you go.  I didn't want to be the point of disclosure there so thanks Roger. 

Merlin Marr-Johnson: And have you announced how much drilling you're going to do, I mean is that public information or…

Roger Lemaitre: Not yet, it's imminent news for us to put our here.  I was hoping we'd have that out earlier than we have but we haven't done that, we've just been through our budgeting process with our Board so… 

Merlin Marr-Johnson: Okay, well I won’t go into… that'll all come out in the wash.  Can you give me kind of rough guidelines of the spend that you're going to be doing next year, how much of it is kind of going into these kinds of field programmes?  Hidden Bay, Christie Lake is it 50% of your kind of field budget or 70%.   

Roger Lemaitre: I'll put 100, almost 100.

Merlin Marr-Johnson: Okay so this is where it's at, it's Hidden Bay and it's Christie Lake?

Roger Lemaitre: Unless our friends at Orano rapidly come around to our point of view that we're in dire need of working at Shea Creek and even while we, whereby we've pressed upon them that multiple times a week it's really, they're the operator and they have control of the project right now.  And so we're influencing them the best we can because we think that's, as much as we like Christie and we like Hidden Bay that's for us the number one target in the Athabasca Basin, whether it's our own project or anybody else's actually.

Merlin Marr-Johnson: Yeah I mean I was just looking at the numbers, I mean it's stunning.  You would have got 67, 68Mlbs in indicated and 28Mlbs inferred and grades about 1%, well 1% in inferred and 1.4 in the indicated, it's smashing.  And according to you it's got growth potential?   

Roger Lemaitre: Yeah, once again talking about Chris and his intersecting faults structures, Chris's team spent a lot of time going through every scrap of information we had, reviewing drill core and the strangest part for us and the part that's really hard to understand our partner's reluctance would be 50% of the pounds that we see at Shea Creek are hosted in the Kianna deposit and 90% of the Kianna deposits at the basement, below the unconformity.  Along, actually dried out along that cross cutting fault structure so Chris's team have identified that those same fault structures, I’ll be conservative and say only 10 times but 10 higher priority targets and multiple others were that structured.  Other structures like that are known to exist and hit the main trend and at the unconformity it's mineralised and they've been trying to historically hit it with vertical drill holes into a sub-vertical body.  And you can imagine how hard that is to hit and of the drill with a north-south component at an angle but every once in a while when they do hit it, Chris and his team have found mineralisation or alteration in the structure.  And so it's not a question of whether or not, is there a mineralised structure there, the question is, if there is enough in that mineralised structure to be economic?  And we disbelief that we can grow that deposit by getting a very focused and fairly cost effective programme.  We're not talking 100s or millions of dollars to do this, you're talking, you know each target doesn't cost a lot to test.

Merlin Marr-Johnson: How deep are they?  I mean if you dig an angled hole, what kind of length hole are you talking about? 

Chris Hamel: The depth to the unconformity at Shea Creek is give or take about 700m so if you want to start testing those targets under the basement you could be looking at drill holes up to 900m at the bottom of the Kianna deposit in order to test those crosscutting structures but you know the thing is that, you know if the mineralisation's there and it's in the basement.  It's you know, that's not that technically challenging in order to get to.  The operator has used directional drilling there for a number of years in order to test accurately the targets you know, so it wouldn't be a new technology or a stretch to believe that, you know for a programme on the scale of about $10M we could test 10 or so of those high-priority targets that we've developed at Shea Creek.

Merlin Marr-Johnson: Yeah, the geologist in me gets excited about lots of untested targets and high potential.  The realist in me says that we have to wait to see what Orono says. 

Roger, Chris thank you so much you've taken me on a huge education learning curve about the Athabasca Basin; apologies for asking dumb questions and apologies to any viewers who have had to repeat their education because of my ignorance.  Any parting thoughts, what of… I know we haven't spoken about the rest of the portfolio but do you want to put some of that into context Roger?  You know just kind of give a bit of polish to my rude questions?

Roger Lemaitre: No, no fair enough the beautiful part about our portfolio and our advanced development projects is that for the ones that we don't control, which is you know right now Horseshoe Raven's the only one we control 100% of and it's probably not ready to go tomorrow towards development.  But the one's like River and following that would probably be Millenium, we don't have to operate those projects so we can focus on the growth part of our business and the growth part of the business for investors new discovery is where the value is generated regardless of the time of the uranium cycle, up down or otherwise and the type of targets that we talked to you about today, and this isn’t us earning a hunk of moose pasture and saying, hey we think there could be something here.  We just staked this ground and we hope there's foodstuff here.  We're down to sort of what you'd down in a brownfields mine site exploration programme.  Even at Hidden Bay we're going, we really like, we know there's something in this area, the question's how much?  And it's about prosecuting lower risk exploration because we're basically doing brownfield type exploration work across all of our projects.

Merlin Marr-Johnson: Great, thank you that's a useful summary.  I've got 2 more questions I'm afraid.  One is at what price do you kind of kick-start the PEA on Horseshoe and Raven?  Are you waiting for the exploration on Hidden Bay or are you going to go ahead with kind of pushing the button on a PEA for Horseshoe Raven?

Roger Lemaitre: I think we'd like to see it go up a couple more bucks first but we're really… our PEA that we had and that we've had to retire last month in November because of its age, it was 10 years old had a… I've got to be careful how I refer to it… that retired historical document now; told us the current price is really close to where the breakeven would be and so it doesn’t take a lot more oomph to get there.  I think we need to see that we're going to be in a spot where there's a comfortable turn-on investment before we really jump and it's not far away. 

Merlin Marr-Johnson: Good, and then the other question was, can you give us a figure on kind of budget in terms of what you're going to be spending or is that going to come out in the News Release?

Roger Lemaitre: That's going to come out in the News Release.  I think what we've been signalling to the market is that we expect our exploration tempo to be up substantially from where we are this year.  Last year was probably the quietest year ever in the Athabasca Basin in the last 20 and this could be one of the busier years for the industry in general.  That's how quickly things have turned and I think we're… our investors are telling us they want to see us do more work and I can understand why, because we had a pretty quiet year last year in terms of exploration results, because of the volume of work that was done.  So significantly higher, that's all I'll tell you right now. 

Merlin Marr-Johnson: Okay good, well thank you very much.  I look forward to having another update perhaps once Chris you've put some drill holes in and found some cracking mineralisation for us to talk about.

Chris Hamel: I sure hope to have that conversation.

Merlin Marr-Johnson: Roger, Chris, thank you very much.

Roger Lemaitre: Thank you very much.

Chris Hamel: Thank you Merlin.    

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