North Shore Uranium Ltd. (NSU:TSX) completed a maiden drill program at the Falcon uranium project in Saskatchewan's Athabasca basin, and the results so far are encouraging, according to a news release.
"The initial results from the program also reinforce our belief that Falcon is a highly prospective uranium property and affirm the prospectivity of other compelling untested electromagnetic conductors (EMs) that have been identified," President and Chief Executive Officer Brooke Clements said in the release.
At Falcon, three targets associated with EM conductors were drilled: P03, P08 and P12.
Drilling in P03 and P08 intersected the targeted subvertical EM conductors and encountered favorable structures. The intersections wound up being very close to the depths predicted by the previously created three-dimensional plate models, and this "validates our team's exploration approach and techniques," Clements added.
In terms of radioactivity, total count gamma probe readings were elevated at P08 and P03, the maximum total count at the latter being 2,695 counts per second.
Overall, drilling confirmed the presence at P03 and P08 of subvertical basement structures with radioactivity, graphite, and alteration, noted the release. Fault zones and alteration like what were encountered at these two targets can be associated with basement-hosted uranium mineralization.
As for target P12, no results from it are available because drilling had to be terminated before the EM conductor could be reached due to unstable ground conditions. As such, P12, in a prominent interpreted structural zone near several other priority targets in the South Walker area, should be drilled again.
Why This Company?
North Shore Uranium, headquartered in British Columbia, is an "early-stage explorer with significant upside potential in the Athabasca basin," David Talbot, head of equity research at Red Cloud Securities, described in a February 12 report. The company is focused on the basin's eastern margin, where it is exploring for economic uranium deposits. It is also evaluating opportunities to add more properties in the region to its portfolio.
Accordingly, North Shore currently has exploration programs underway at two projects in the basin's eastern margin: Falcon and 90 kilometers to the northeast, West Bear.
The Athabasca basin, a Tier 1 jurisdiction, is "home to the world's highest-grade uranium deposits that provide over 20% of the world's uranium supply," noted Technical Analyst Clive Maund in a February report on North Shore Uranium. "New exploration methods and technical developments have yielded multiple significant discoveries on and near the perimeter of the basin, where there is the advantage of much less overburden than exists towards the center of the basin."
Also, there are Cameco Corp.'s (CCO:TSX; CCJ:NYSE) Key Lake uranium mill and former mine and its Cigar Lake and MacArthur River projects along with Denison Mines Corp. (DML:TSX; DNN:NYSE.MKT) and Orano Canada's McClean Lake projects. Two other big names active in the region are NexGen Energy Ltd. (NXE:TSX; NXE:NYSE.MKT) and Rio Tinto Plc (RIO:NYSE; RIO:ASX; RIO:LSE; RTPPF:OTCPK).
"Since they are in the same belt along the east side of the Athabasca basin, the prospects for significant discoveries on North Shore's claims are clearly very good," added Maund.
As for Falcon, it comprises 15 mineral claims. South Shore owns four, covering 12,791 hectares (12,791 ha), and Skyharbour Resources Ltd. (SYH:TSX.V; SYHBF:OTCQX; SC1P:FSE) owns the rest, spanning 42,908 ha. However, North Share has the option to purchase the remaining 20% interest after earning its initial 80% stake, which it is working toward now.
Limited exploration has been done at Falcon; however, 28 holes drilled historically returned up to 0.235% U308. Most recently, North Shore Uranium analyzed EM data together with geophysical data procured in 2022 and identified high-priority targets in areas of limited previous drilling.
"The new uranium discovery potential at Falcon is significant, including shallow basement-hosted unconformity-style mineralization and pegmatite-hosted mineralization similar to that discovered at the Fraser Lakes zone B uranium resource located just 3 km south of the property," the company said.
As for West Bear, North Shore Uranium is working to earn a 75% interest in it from Gem Oil Inc. by April 11, 2025. The project consists of five claims totaling 4,500 ha.
Last year, North Shore conducted a 600 line-km airborne, high-resolution gravity-magnetic-radiometric survey over most of the southern block of four claims. Based on the results and data from 16 holes drilled historically, the company identified three major target areas and plans to follow up on those this year.
Uranium Demand and Price Rising
According to Red Cloud Securities, the outlook for nuclear power and small modular reactors in the short and long term is positive, reported Talbot last month. This is evidenced by "proactive government policies, public acceptance, better economics, climate change impacts and security of supply," he wrote.
This improved attitude, continued Talbot, has led to increased uranium demand and higher uranium prices. Looking ahead, this bodes well for the uranium market and uranium companies that need incentives to make discoveries and develop new mines.
Since the start of 2023, the U308 price jumped 110% to US$101 per pound (US101/lb), thereby surpassing Red Cloud's long-term price assumption of US$85/lb. Red Cloud revised its uranium spot price estimates, and they steadily increase over the next four years. They are US$120/lb for 2024, US$135/lb for 2025, US$150/lb for 2026 and US$175/lb for 2027.
"Fortunately, we are starting to see the much-needed uranium price incentive, leading to exploration and mining projects being taken off the shelf, new exploration companies are emerging, and equity investment into uranium stocks continues at a torrid pace," Talbot wrote.
Technical Analyst Maund wrote in a February report the nuclear power industry is in "growth mode and is deemed to be of critical importance in meeting carbon dioxide emission reduction goals with the recent COP28 declaration to triple nuclear power by 2050." He also highlighted that the uranium price is trending upward.
"This is reflected in the powerful bull markets that we are seeing in big uranium stocks like Cameco Corp., and we are now seeing increased "trickledown" into the midcap and smaller stocks," he wrote.
One of these smaller stocks is North Shore Uranium, which Maund recommended as an immediate Strong Speculative Buy last month when it was CA$0.17 per share. Now, it is trading even lower.
Maund wrote the stock then was at a good entry point. The trading pattern had formed the second low of a double bottom and the price had not moved up much subsequently.
"The stock looks ready to break out of this base pattern soon to commence the expected new bull market," he wrote.
The Catalysts: Exploration Results
Regarding Falcon, an upcoming catalyst is the analytical results of the recently submitted drill core samples, said the company. It is expected to receive them in four to six weeks. These data will inform North Shore's future work related to the P03 and P08 targets.
Meanwhile, the company will continue to prospect, map, and sample other high-priority targets at Falcon.
At West Bear, North Shore Uranium is evaluating select targets identified from the airborne survey and prioritizing follow-up work to be done on those in the field.
Ownership and Share Structure
According to the North Shore, there are 36,830,960 shares outstanding, and 45% of the shares are held by management, directors, and founding investors.
CEO Brooke Clements owns 3.30%, with 1.22 million shares.
The company told Streetwise, "Directors and founding investors took down 1.10 million of the 7.7 million shares in the initial financing, which closed on October 31, 2023, 14.3% of the offering. This is a sign of our commitment to building a strong company."
According to Market Watch, the company has 27.46 million shares outstanding and trades in the 52-week range between CA$0.12 and CA$0.30.
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