Taking a Closer Look: Azincourt’s Encouraging Winter Program

Seated in the prolific Athabasca Basin, the Patterson Lake North project covers roughly 27,000 hectares of highly prospective, underexplored land just 30 kilometers shy of UEX (TSX:UEX) and AREVA’s (EPA:AREVA) Anne and Collette deposits near Shea Creek. The project is also immediately adjacent to Patterson Lake South, which, as uranium investors know, has routinely turned out high-grade intersects and anomalous findings since the project was first discovered.

This winter, Fission 3.0 and Azincourt embarked upon a $1-million drill program that wound up on April 2, 2014. The program, designed to test three electromagnetic conductors, encountered a lithological setting with structural complexity similar to that in of Patterson Lake South. Four holes were completed to target depth while one hole was partially completed before being lost due to technical difficulties and two attempts were abandoned due to thick overburden. The company was unable to drill the shallow southern lake targets as a result of unsuitable winter ice conditions. However, the company is encouraged the anomalous radon in water survey results confirmed the high prospectivity of the targets.

Overall, the company drilled roughly 2,000 meters over seven holes and returned encouraging results, particularly for a first-time drill program. The company is currently awaiting the results of further assays to complete the pathfinder element review and determine the clay alteration geochemistry.

“The results from the winter program at PLN have increased our knowledge and understanding of the geology at PLN. All three conductors tested remain highly prospective,” Ted O’Connor, president and CEO of Azincourt, said in a company statement. “The 2014 radon and geophysical survey results and all exploration work to date, have set the project up with an excellent and large target inventory over the entire project area. Azincourt is extremely encouraged with the project prospectivity and will be continuing to fund on-going exploration work at PLN. The immediate plans are to use the drill, radon and geophysical survey data to prioritize new drill targets for testing during the next drill program.”

Dundee Capital Markets analyst David Talbot called the drill program a “technical success” in a note to investors, explaining that “geophysical targets were hit and could be explained.” Though the program did have some hiccups, with other structures unable to be tested, Talbot nonetheless is “expecting an upsized 2014/2015 winter drill program,” particularly as the company has a $3-million earn-in expenditure over the next 12 months.

Per the terms of the joint venture agreement with Fission 3.0, Azincourt can earn up to a 50-percent interest in Patterson Lake North by incurring $12 million in staged exploration spending and paying $4.75 million in cash and shares.

Dundee sees the Patterson Lake North property as a “unique and prospective opportunity” within the Athabasca Basin. Beyond being located in a mining-friendly jurisdiction with good infrastructure, the firm sees the inherent potential in Patterson Lake North given its proximity and potential strike extension to both Patterson Lake South and Shea Creek.

Dundee currently has a buy rating on Azincourt with no specified target price. Azincourt is currently trading at $0.22.

Securities Disclosure: I, Vivien Diniz, hold no direct investment interest in any company mentioned in this article.