North Shore Uranium Ltd. (NSU:TSX) is preparing for a follow-up drill program at Falcon and, later, a maiden drill campaign at West Bear, both uranium projects in Saskatchewan's Athabasca Basin, President and Chief Executive Officer Brooke Clements said in an interview.
"We think we've just scratched the surface at Falcon," Clements told RCTV. "More work is clearly warranted on the discoveries we made this winter. We have a lot of untested, high-priority targets that we want to evaluate." As for West Bear, "We have some targets we want to test in an area where there has been no drilling."
Both projects, about 90 kilometers (90 km) apart, are at the basin's eastern margin, an area with much less past exploration than the expanse to the west. Both projects have historical exploration data, now in the hands of North Shore, which complemented it with an airborne gravity survey over each property in 2022. Both projects boast established uranium potential and are earn-in opportunities for North Shore.
Clements provided an update on both assets. As for the 55,000-hectare Falcon project owned by Skyharbour Resources Ltd. (SYH:TSX.V; SYHBF:OTCQX; SC1P:FSE), North Shore completed its maiden drill program earlier this year. It selected the drill targets after analyzing various historical data sets and the results of geophysical surveys done in 2006, 2007, and 2013, said Clements.
Red Cloud Securities Analyst David Talbot described the drill results in a March research report. "In our view, the structures and alteration typical of basement-hosted uranium mineralization [were] identified by this initial drill program," he wrote. "We see the results as a positive first step."
Specifically, the new data indicated near-surface mineralization at two targets, PO3 and PO8, 1.3 km apart from one another and each associated with near vertical electromagnetic conductor systems, said Clements.
At PO3, the company encountered a subvertical graphitic brittle fault zone about 10 meters (10m) wide, between 196 and 206m downhole. Five intervals showed 100+ parts per million (100+ ppm) U3O8, and three samples, 300+ ppm U3O8. Also, the structure and mineralization were associated with a chlorite and silica alteration.
At PO8, the company hit near-surface uranium mineralization between 42m and 47m. A 4.7m interval
averaged 316 ppm U308; the highest value was 572 ppm. Between 67 and 71m two intervals had 100+ ppm U308. Between 102 and 105m, the company hit the targeted electromagnetic conductor system. Also encountered was a brittle graphitic fault zone that had elevated, but not anomalous, uranium, bleaching clay alteration, hematite alteration, chloride alteration, and patchy silica alteration.
Before the next drill program, said Clements, North Shore is analyzing a large amount of geophysical and geological data and plans to go into the field to investigate some of the priority targets.
Regarding West Bear, owned by Gem Oil Inc., limited historical drilling has been done on the property, the last four holes drilled by Denison Mines Corp. (DML:TSX; DNN:NYSE.MKT) in 2015. About 1.5 km to the north of West Bear, Uranium Energy Corp. (UEC:NYSE AMERICAN) has the only cobalt-nickel resource in the basin as well as uranium reserves.
North Shore intends to drill the West Bear property in the future.
Stock Has Rerating Potential
Overall, about this British Columbia-based uranium explorer-developer, Clements said, "I think we offer good value for exposure to grassroots uranium exploration. It looks like we're at the beginning of a major bull cycle in uranium, and excitement is building in the exploration sector." The CEO added that it is a good time to invest in it.
Technical Analyst Clive Maund is bullish on North Shore Uranium, too. He recommended it as an immediate Strong Speculative Buy in May when it was CA$0.17 per share. Now the price is even lower.
"The stock looks ready to break out of this base pattern soon to commence the expected new bull market," he wrote.
According to Talbot, "As the company continues to execute on its exploration strategy at Falcon and West Bear, we believe that the stock has the potential to rerate."
The Catalyst: Further Exploration Work
North Shore has catalysts ahead this year related to both Falcon and West Bear, wrote Talbot, as it continues executing its exploration plans at each. Specifically, at Falcon, the team is in the process of desktop and field evaluation, which will be followed by further drilling.
At West Bear, desktop and field evaluation of targets is the next step.
Uranium Bull Market Underway
Interest in uranium is growing as major economies around the globe continue their decarbonization efforts and transition to green energy, Georgina McKay reported for Bloomberg on June 24.
"China is rapidly deploying atomic power, Japan is looking to boost its economy by giving nuclear another chance, and across the U.S. and allied countries, owners of left-for-dead uranium mines are restarting operations," she wrote.
The return to nuclear is evidenced, McKay added, by the upswing in the uranium price. It has gained 233% over the past five years, more than three times the gains in gold and copper. Last year, the price climbed 88.54%, Jacob White with Sprott wrote on June 20.
"This phase indicates a healthy correction within a bullish market cycle," White commented. "We believe that uranium's recent pause may be an attractive entry point in the overall uranium bull market."
Global demand for uranium is robust. As for supply, very little investment has been made in production post Fukushima.
"With no meaningful new supply on the horizon for three to five years, we believe this bull market has further room to run," White added. " Over the long term, increased demand in the face of an uncertain uranium supply may likely continue supporting a sustained bull market."
Mine restarts, and new mines to come online are critical, White purported, given the lack of adequate supply for the world's nuclear reactors, the expected supply deficit over the next 10 years, and the long lead times and capex requirements hampering near-term supply.
Ownership and Share Structure
Among the reasons investors should consider North Shore, Clements said, are its ownership by insiders, tight share structure and low valuation. Clements himself owns 3.43% or 1.26M shares, Director Doris Meyers has 2.11% or 0.78M shares, Director James Arthur holds 1.45% or 0.53M shares and Director James Thom owns 0.16% or 0.06M shares, according to Reuters. Total insider ownership is 7.14%, or 2.63 million (2.63M) shares.
Currently, it does not have any institutional investors. The rest is with retail.
North Shore has 36.81M outstanding shares and 34.18M free float traded shares.
The company has a market cap of CA$2.69 million. It has traded in the past 52 weeks between CA$0.075 and CA$0.30 per share.
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