Forum Uranium's Rio Tinto JV Highlights Promise in Athabasca Basin

With uranium spot prices bouncing between $34 and $35 per pound of U3O8, it’s easy to become discouraged about the market — especially since analysts and market players have been calling for a sharp uptick in prices for what feels like forever.
But despite the sluggish market, Forum Uranium (TSXV:FDC) has seen some positive news lately. Most recently, the company announced that Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO), its joint venture partner through subsidiary Rio Tinto Canada Uranium, will be spending some time — and money — on the Henday project in Northern Saskatchewan.
Forum acquired the Henday project in 2007. Following some preliminary geophysical work and drilling, the company found a partner in Hathor Exploration, which as investors may recall was ultimately taken over by Rio Tinto. The takeover resulted in Rio Tinto inheriting Hathor’s 60-percent share of the Henday project.

As operator of the project, Rio Tinto has flown an airborne electromagnetic and magnetic survey on the property, and that returned enough data that Rio decided to move forward with the current 9,000-meter winter drill program. It’s focused on two target areas: Elephant and Epitaph. With this drill program as a start, Rio Tinto is looking to earn an additional 10-percent stake in Henday, and Forum is carried for the next $20 million in exploration at the property.
“It’s important for Forum having a company like Rio Tinto investing significant exploration dollars in our property,” CEO Richard Mazur told the Investing News Network in a phone interview, adding, “given the state of the commodity markets and major companies’ reduced exploration budgets worldwide, it’s great for Forum to see that this project ranks very highly in [Rio Tinto’s] worldwide portfolio.”
As a project generator, Mazur explained that companies have “got to add some value to make [their project] an attractive option to other big companies or other juniors.” For its part, Forum likes “to do the preliminary work and maybe get the first drill campaign into it to prove [its] theories and [its] exploration concepts” before looking for a partner.

Other projects on the move

Beyond Henday, Forum has a portfolio of several uranium properties in Northern Saskatchewan. Two of the most notable are the Fir Island project and the Highrock and Highrock South projects.
Acquired in 2014 and drilled in 2015, Forum’s Fir Island project ranks quite high in its portfolio. Mazur noted that the project is on a major structure similar to all the mines in the Eastern Athabasca Basin. After about 2,500 meters of drilling over 10 holes, the company identified a zone, the East Channel, that returned some strong alteration and prompted the company to focus on the area.

Forum will be launching a fairly extensive gravity survey along the 5-kilometer East Channel structure. That, as Mazur noted, will help the company “get a sense as to the potential along that structure for similar targets that could be drilled in the future.”
Forum closed a $876,000 financing last week, the proceeds of which are primarily earmarked to fund the drilling at the Highrock and Highrock South projects. What has piqued the company’s interest in the Highrock and Highrock South projects is their proximity to Cameco’s (TSX:CCO,NYSE:CCJ) Key Lake mine.
“It’s a project we’ve been wanting to get at for a number of years now,“ Mazur stated, adding that part of the allure of the Highrock projects is that “ the targets are quite shallow.” He also likened the targets at Highrock and Highrock South as similar in concept to Patterson Lake or the Triple R discovery, owned by Fission Uranium (TSX:FCU).
“It’s just outside the Athabasca sandstone basin,” he explained, adding that the company ”will be drilling right into the basement looking for basement-hosted deposits. And the targets that we’ve delineated there are along the same horizon that host the 200-million-pound Key Lake uranium mine. The geophysics that we’ve done have identified eight to 10 targets, and we’re hoping one of them might light up for us.”
Forum is planning to start on the Highrock drill program in March, with an estimated 1,500-meter program.

 
Securities Disclosure: I, Vivien Diniz, hold no direct investment interest in any company mentioned in this article.
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Forum Uranium is a client of the Investing News Network. This interview is not paid-for content.