Terra Clean Energy Corp. (TCEC:CSE; TCEFF:OTC; T1KC:FSE) is about to start an extensive winter drill campaign at the South Falcon East uranium project in Saskatchewan's Athabasca Basin, now that it has mobilized the required crew and equipment to the site, reported HoldCo Markets in a Feb. 18 research note.
"Turnaround should be relatively quick with assay results likely to be returned in Q2/25," HoldCo wrote.
Terra Clean Energy has an earn-in agreement with Skyharbour Resources Ltd. (SYH:TSX.V; SYHBF:OTCQX; SC1P:FSE), amended in December 2024, to earn up to a 75% interest in South Falon East by 2029, in stages, in exchange for spending certain amounts on exploration and cash/stock payments.
"A large part of the amended agreement amounts to dates which have shifted one year forward, providing the company with additional flexibility," explained HoldCo.
Overhangs Now Resolved
The current share price of Terra Clean Energy is CA$0.285.
"We continue to believe that at the current microcap valuation, the risk remains on the upside, provided future drilling success," HoldCo wrote.
HoldCo's target on the uranium explorer is CA$0.33 per share, reflecting a potential return for investors of 16%. It also reflects the removal of certain corporate overhangs on Terra Clean Energy, HoldCo noted. Along with the amended agreement with Skyharbour, in recent months Terra raised CA$3.3 million (CA$3.3M) in gross proceeds, received drill permits for South Falcon East, made a debt settlement agreement with Terralogic Exploration Inc. and had a new chief executive officer, Greg Cameron, take over (on Jan. 2).
Terra Clean Energy's market cap is CA$10.4M.
Details of Upcoming Drilling
The plan for the impending campaign is 2,500 meters (2,500m) of drilling, infill to confirm the presence and continuity of existing mineralization and stepout to possibly expand the existing resource of the Fraser Lakes B deposit. The Inferred resource is an estimated 10,350,000 tons of 0.03% U3O8 for 6,960,000 pounds plus thorium mineralization.
The upcoming work will build on last year's inaugural, phase one, 442m program and test nearby targets that showed prospective alteration and structure identified with historical drilling. Mineralization remains open both downdip and along strike.
"Seeing that the deposit remains open in most directions, additional work spend may lead to an increase in both grade and resource size," HoldCo commented.
Catalysts on Horizon
Once drilling starts, results are expected in Q2/25, HoldCo wrote.
After, the resource estimate for Fraser Lakes B will be updated to include results of the recent infill and stepout drilling and other results not included in the historical calculations.
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