ResourceClips'  Instablog

If British Columbia's mining and exploration sector needed a massive jolt of reassuring news, they got it May 14. The pollsters were wrong, the pundits were wrong and the winners might be as surprised as the losers are disappointed. Although the popular vote was close, the BC Liberal party won an historic fourth term, handily defeating the New Democratic Party.

Or did the NDP defeat themselves? Adrian Dix, the party's choice for new leader 13 months ago, was widely considered an NDP hardliner. He played a prominent role in B.C.'s last NDP government, which is blamed for the "dismal decade" of 1991 to 2001, when the province's economy tanked despite robust performance in other parts of the country. For possibly the first time in its history, B.C. saw a significant exodus of job-seekers. In addition to low metal prices and Bre-X, exploration and mining were hammered by NDP policies. As the BC Liberals like to say, when the NDP governed "two mines closed for every one that opened."

More recently, Dix tried to soften his image. But he remained vague about his intentions even though-or because-he leads arguably the most extreme left-wing party in mainstream North American politics. In several conversations with ResourceClips prior to the election, exploration and mining company executives spoke with dread of another NDP government.

Now, it turns out, they needn't have worried. But apart from removing a widely perceived threat, what exactly does a BC Liberal victory mean to the sector?

That's not easy to say. Mining didn't play a prominent role in the election, despite the efforts of four industry organizations behind the Vote Mining campaign.

Moreover, under Christy Clark's leadership the once business-friendly party has shown policy confusion and a lack of conviction. Her government never explained its rejection last October of Pacific Booker Minerals' (PBM) proposed Morrison copper-gold-molybdenum mine, which received a favourable environmental assessment report. The company launched a lawsuit in April after spending about $30 million on the project, including over $10 million on the decade-long environmental process.

When news broke that HD Mining plans to staff its proposed Murray River coal mine exclusively with Chinese underground workers, the BC Liberals couldn't say enough good words about the scheme. The government knew that Chinese interests had similar plans for other B.C. coal projects since at least 2007.

Even under Clark's more capable predecessor, policy wonk Gordon Campbell, the BC Liberals could sow uncertainty. A sudden ban on uranium and thorium exploration in 2009 led to a $30-million out-of-court settlement for Boss Power (BPUZF.PK).

By the BC Liberals' first 10 years in office, BC Hydro built up at least $2.2 billion in deferred debt that's expected to reach $5 billion by 2017. The burden calls into question the public utility's ability to build infrastructure and provide inexpensive electricity to homes, businesses and industry.

On the positive side, Clark easily outperformed Dix in her reply to questions posed by Vote Mining. To a large extent she took credit for industry success, reiterated her record and made future projections that might be more sales pitch than policy. But hers was far more specific than Dix's largely platitudinous response.

Mining might have played a role in the re-election of at least one of two BC Liberal MLAs in Kamloops, a small city in central B.C. A controversial issue was the Ajax mine, KGHM International's proposed $795-million copper-gold open pit partly within the town boundaries. One of the two NDP candidates opposed the project.

Not that everyone in mining supports the BC Liberals. Stephen Hunt, western Canada director of the United Steelworkers, says his union represents about 7,000 to 8,000 B.C. mining workers, depending on industry activity. The USW endorsed the NDP. "I think an NDP victory would be beneficial because then we could stop talking about permitting mines and actually do it," Hunt told ResourceClips on May 10. Dix had proposed a 55-day turnaround time for notice of work permits, compared to the 60-day objective set by the BC Liberals in February.

Dix also said he would press the federal government to resolve aboriginal treaties. Hunt sounded less optimistic about such a goal but said, "I think the NDP may have a bit of a lead because of their approach to things. They're a little more respectful to the environment, a little more respectful to first nations…. If you look at the debacle with HD Mining, no one even thought of employing first nations people."

Before the polls closed, Mining Association of B.C. president/CEO Karina Briño told ResourceClips, "Regardless of the election results, our priorities do not change." She said the industry requires "a climate which will allow for continued growth. That means clear process, clear timelines, transparency when it comes to requirements when submitting an application for an approval, a permit or an environmental assessment certificate. It means skilled people in the government running the process, it means clear investment opportunities as well in terms of taxation, infrastructure, access to power, access to water, etc."

She added, "We're looking forward to working with the government to make sure our priorities and our contributions to the economy of the province are well understood."

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Geology has a way of stimulating even the most discouraged investors, as shown by the way North ROK excited an otherwise dismal market. The very first hole from the Colorado Resources project sent company stock soaring from an April 24 close of 16 cents to a May 6 high of $1.25. Along with the excitement comes revived interest in the northern part of British Columbia's Golden Triangle, in the region around the discovery hole and Imperial Metals' (IPML.PK) development-stage Red Chris project, 15 kilometres east.

For anyone coming out of cryogenic slumber, here's the first North ROK hole announced April 25:

• 0.51% copper and 0.67 grams per tonne gold over 333 metres, starting at 2 metres in downhole depth
• (including 0.63% copper and 0.85 g/t gold over 242 metres, starting at 2 metres)
• (which includes 0.76% copper and 1 g/t gold over 180.47 metres, starting at 63.53 metres)
• (and including 0.2% copper and 0.19 g/t gold over 91 metres, starting at 244 metres).

True widths haven't been determined.

Still to come are assays for a second hole 350 metres west. Geophysical data, however, suggests drilling "may have been stopped short of adequately testing the IP chargeability anomaly." Colorado now plans to deepen the second hole and sink a series of 100-metre-spaced step-outs from the 333-metre intercept.

Could North ROK be a one-hole wonder? Maybe, but other companies aren't wasting time getting in on the action. The region "may become the next significant mining district in British Columbia," according to TAD Mineral Exploration [V.TJ]. On May 6 the company reported staking a 876-hectare copper-gold prospect near the village of Iskut, north of North ROK. TAD could be a tad opportunistic, having announced on April 11 it staked 4,000 hectares in the region of Patterson Lake South, the Fission Uranium (FSSIF.PK) / Alpha Minerals (ESOFD.PK) uranium discovery that sparked the southwestern Athabasca Basin acquisition rush.

Also on May 6, Teuton Resources (TEUTF.PK) reported it optioned its Yellow Chris South claims to Redhill Resources (ATWGF.PK). Located "a few kilometres northeast" of Colorado's discovery hole, Yellow Chris South shares a similar geophysical setting, Teuton stated. The company added that its optionee "plans an aggressive program of property-wide soil sampling, geological mapping and IP surveying" beginning immediately. Subject to regulatory approval, the option allows Redhill to earn an initial 50% by paying Teuton $300,000 and 1.4 million shares, as well as spending $4.5 million over four years.

Teuton still has several blocks in the Red Chris and Yellow Chris area totalling 10,256 hectares. "We're currently negotiating with a number of other companies," IR officer Gary Assaly tells ResourceClips. "We have several properties that are optioned in the Stewart region [roughly 190 kilometres south] and there will be a lot of work done by other companies on our properties," he says. But there's been sudden interest in the North ROK area. "The phone started ringing a week ago, on the weekend."

Teuton president Dino Cremonese adds, "We feel that our claims have a lot of potential, especially those which have discrete mag highs, some associated with flanking mag lows, the latter suggesting an area where alteration has been so intense that the magnetite has been replaced. So far, because our attention has been on our many claims further south, we have done only very minor soil geochem. This, however, has also been positive, with a few areas reporting values to 271 parts per million copper."

A company that diversifies its opportunism, Pistol Bay Mining was advancing an Ontario graphite property while a big-name joint venture partner drilled one of its Athabasca Basin uranium projects. Then the Colorado Resources discovery drew Pistol Bay back to its Summit Lake B property contiguous to North ROK.

"When this hit we went back and looked at the results from our 2010 program," Pistol Bay president/director Charles Desjardins tells ResourceClips. "When you look at the showing in North ROK and compare it to our Kitty showing, we have some good numbers."

The 1,394-hectare property saw "a lot of soil sampling and grab samples in 2010 and what we did was quite interesting. There were good numbers like 17.9 grams per tonne gold with 18.5 grams per tonne silver, a 10.9-gram-per-tonne gold sample with 15.9 grams per tonne silver, and a pretty good-sized trend there. We've identified three zones but the most southerly zone is probably three by 700 metres or so. So it's looking pretty interesting."

Pistol Bay also holds the Summit A and D blocks, over 7,000 hectares adjacent to Imperial Metals' Red Chris copper-gold project, a potential open pit which could spend 28 years mining reserves of 301 million tonnes averaging 0.359% copper and 0.274 g/t gold.

Summit A and D have also been revitalized, Desjardins points out. "We're looking at everything right now. We got all the historic government mag data that was done probably in the 1990s. Usually government mag spacing is three, four hundred metres but this stuff was quite tight and quite valuable. So we're looking at all that right now." Work will follow in spring or early summer, he adds.

On Pistol Bay's C5 uranium project in Saskatchewan, meanwhile, assays are pending from six holes totalling 2,760 metres sunk by the JV partner, a Rio Tinto subsidiary. South of C5, Pistol Bay has optioned its C3 property to Actus Minerals. Desjardins says Pistol Bay management and geos like C3 even better than C5. "I wouldn't mind getting it back, but it's nice to use other people's money too," he says.

As for Summit B, Desjardins isn't yet sure whether his company will finance the project itself or JV it. "But it's definitely a project that needs to be worked right now, with the signatures that the Colorado guys have shown us." Like Teuton's Assaly, Desjardins says his phone's been flooded with calls.

The North ROK news diverted Serengeti Resources (SGRNF.PF) from its flagship Kwanika copper-gold deposit in central B.C. long enough to stake Red Chris North. Announced May 1, the 5,675-hectare property sits eight to 10 kilometres north of Colorado's discovery. It features a "strong gold-copper in-stream sediment geochemical anomaly from Geoscience B.C.'s northern B.C. dataset, as well as coincident magnetic anomalies from the Geoscience B.C. Quest NW airborne geophysical survey with geological settings favourable for porphyry-style copper-gold mineralization," according to Serengeti.

That same day the company also reported staking the 2,469-hectare Smoke property contiguous with its Kwanika East property and the 2,078-hectare Rottacker property, contiguous with the southeastern part of Kwanika itself.

Bordering Imperial Metals' Red Chris project to the northwest, the 6,891-hectare ROK Coyote property bounced back to Firesteel Resources last January after an option with Lions Gate Metals (LGMFF.PK) fell through. Historic work at the copper-gold project includes 18 trenches totalling 1,184 metres and 19 shallow holes for 1,792 metres. Lions Gate, however, has since turned to another hot area with a March option on the Whitford Lake uranium project in the Athabasca Basin.

Nevertheless, the Red Chris area competes even with North ROK for Colorado Resources' attention. The company's determined to drill out the rest of a 1,500-metre program at its Eldorado project, which features copper-gold showings about seven kilometres along strike with the Imperial Metals deposit. Colorado picked up a 75% option on the property last October from Sunrise Resources.

Back in November, Colorado president/CEO Adam Travis stated, "I have been working in the Red Chris area now for over 25 years and am confident that this untested geophysical anomaly is one of the better alkalic copper-gold porphyry drill targets I have seen, given its location and geological setting next door to Red Chris."

But now the market's mostly focused about 15 kilometres west, the site of North ROK.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Denison gets Fission Energy, spinco Fission Uranium gets Patterson Lake South

It's a done deal, both companies announced April 26. Denison Mines (DNN) closed its acquisition of Fission Energy (FSSIF.PK). The latter company stops trading at the close of April 29 but a new outfit, Fission Uranium Corp., is expected to begin trading on May 1. Fission Uranium will retain the Fission Energy team and their most celebrated asset, a 50% interest in Patterson Lake South.

For each Fission Energy share, holders get 0.355 of a Denison share, a full Fission Uranium share and, for good measure, one ten-thousandth of a penny. The new company also gets about $17 million from Denison, a handy sum to continue its share of PLS drilling while shopping for other properties.

The acquisition went much as planned except for a late decision to change the new company's stock ticker to FCU.

Patterson Lake South rolls out the results

Patterson Lake South, meanwhile, continues to shock and awe the market with near-surface results showing off-scale scintillometer readings and high-grade assays about every week-at least.

Just a couple of examples: An April 22 announcement reported assays of 6.57% triuranium octoxide (U3O8) over 53 metres, including 29.26% over 10.5 metres. The intercept started at a downhole depth of 95 metres. Only two days later came assays of 6.26% over 49.5 metres, including 35% over 6 metres, starting at 66 metres in downhole depth.

A 50/50 joint venture between Fission Energy and Alpha Minerals (ESOFD.PK), the PLS discovery sparked the current staking rush around the Athabasca Basin's southwestern rim. Alpha filed an NI 43-101 technical report for the property on April 14.

Alpha private placement closes at $12.28 million

While Fission Uranium starts off with about $17 million from Denison, its JV partner-to-be, Alpha Minerals, has just picked up $12.28 million. On April 25 the company announced completion of 1.2 million flow-through shares at $4.40 each and 1.75 million units at $4. Each unit consists of one non-flow-through share and half of a warrant. Each whole warrant will be exercisable at $5 for 24 months.

The private placement was originally offered up to $7.28 million, but was increased by $5 million on April 9.

NexGen now on the TSXV

Its reverse takeover with Clermont Capital complete, NexGen Energy Ltd. made its Venture debut on April 23. NexGen interprets its flagship Radio property to be on the same structural trend as Rio Tinto's Roughrider deposit and Denison's Waterbury Lake J-zone. NexGen holds an option to acquire an initial 70%, then the remaining 30% subject to a 2% NSR.

Another NexGen standout is Rook 1, immediately northeast of Patterson Lake South.

Under a JV within a JV, NexGen and Forum Uranium (FDCFF.PK) have an option to earn 30% each of the Northwest Athabasca project, currently held 87.5% by Cameco Corp (CCJ) and 12.5% by AREVA Resources. On April 10 project operator Forum announced completion of a 3,500-metre program that hit uranium mineralization in eight of 17 holes.

Last November NexGen picked up 10 Canadian uranium properties from Mega Uranium (MGAFF.PK). On April 22 Mega acquired an approximately 25.2% interest in NexGen, which currently has about $6 million on hand.

As for Waterbury and the J-zone …

In the eastside Basin neighbourhood of Radio and Roughrider, Waterbury Lake is now held 60% by Denison, a result of its Fission Energy acquisition. A consortium headed by the Korean power utility Kepco holds the remaining 40%.

Last winter Fission Energy sunk 68 holes totalling over 21,000 metres to define and expand the project's J-zone. Scintillometer results announced April 5 showed mineralization in 35 holes. Assays are pending for this final stage of a three-year, $30-million campaign.

Forum to fly Clearwater

In addition to its NexGen collaboration, Forum plans an airborne magnetic and electromagnetic survey over its 100%-held, 9,910-hectare Clearwater property immediately southwest of Patterson Lake South. Funding comes from a $500,000 private placement that closed April 23.

Denison drills turn Wheeler River

On the Basin's east side, winter drilling at Denison's 60% Wheeler River project completed 14,577 metres in 27 holes. On April 24 the company announced it had extended the new 489 zone along strike by 65 metres. The zone lies 2.1 kilometres from the project's Phoenix deposits, which Denison calls "the most significant new uranium discovery in the Athabasca Basin in many years."

Denison acts as project operator for partners Cameco, which holds a 30% interest, and JCU (Japan-Canada Uranium) Exploration, which holds 10%.

Lakeland stakes more land

Now a "pure play uranium exploration company focused on the Athabasca Basin," Lakeland Resources (LRESF.OB) announced on April 25 it had staked three more properties. The Small Lake, Hawkrock Rapids and Circle Lake properties total 54,745 hectares in the northern and northeastern Basin.

The news followed an April 2 announcement that Lakeland staked two other northern Basin properties, the 9,645-hectare Otherside and 35,429-hectare Riou Lake. All five properties, totalling nearly 100,000 hectares, were chosen on the basis of previous work by former operators. Lakeland intends to study historic data prior to planning a work program.

The company has also signed a non-binding letter of intent for eight other Basin properties totalling about 190,000 hectares.

Ashburton shifts focus to the southwestern Basin

The same day Lakeland reported its three most recent acquisitions, Ashburton Ventures (ASHXF.OB) announced 50% options on two others. The 2,999-hectare Patterson West property borders Patterson Lake South and is eight kilometres northwest of the PLS discovery. The 2,537-hectare Patterson North sits eight kilometres north of the PLS property. CanAlaska Uranium (CVVUF.OB) staked the two properties last January.

Ashburton may earn a 50% interest in both projects by paying CanAlaska $25,000, issuing the company 2.5 million shares and a million warrants exercisable at $0.10 and spending $1.4 million over three years.

The options increase Ashburton's PLS presence. On March 14 the company announced the purchase of a 147-hectare claim bordering a Fission Energy property north of the Patterson Lake South JV and a 1,090-hectare property about 25 kilometres southwest of PLS. That deal cost Ashburton $10,000 and 1.5 million shares.

In order to focus on the PLS region, Ashburton cancelled a 100% option on the eastern Basin's Bernick Lake project that was announced March 21.

More PLS expansion with Skyharbour

A 115,300-hectare acquisition announced April 11 brings Skyharbour Resources' (SYHBF.PK) PLS-proximate package up to six properties totalling 157,000 hectares. Skyharbour is now one of the region's largest landholders.

The most recent deal cost the company $50,000, a million shares, a 2% NSR and a 2% gross revenue royalty.

CIN stakes out a JV, increases PLS holdings

A joint staking operation by Canadian International Minerals and Tyko Resources Inc gives each a 50% interest in eight claims totalling more than 34,700 hectares. The April 2 announcement boosts CIN's presence to nearly 60,000 hectares, all in the vicinity of Patterson Lake South. CIN will act as project operator on the Tyko JV.

Uranium, diamonds, whatever

Another company with a "strategic resource direction," Aldrin Resource (AOUFF.PK) announced an option on the 12,001-hectare Triple M uranium property nine kilometres south and 11 kilometres west of the PLS discovery. Under the agreement announced April 15, Aldrin may earn 70% by paying $1.5 million, issuing 12.5 million shares and spending $4 million over four years. The vendors get a 3% NSR and 3% gross overriding royalty for, um, "any diamonds found on the property."

A tad contrite

Saying it "plans to mobilize crews shortly," TAD Mineral Exploration announced on April 11 it had staked 4,000 hectares in the PLS region. "Management of TAD has let its shareholders down in the past with a lack of focus," stated company director Jason Gigliotti. "We plan on becoming much more active to enhance shareholder value and this is the first step in that direction."

Alberta as well as Athabasca

Zadar Ventures announced on April 22 that the TSXV approved its purchase of the Upper Poulton Lake project for $100,000, 900,000 shares and another $2 million to explore the 2,730-hectare property over four years.

Zadar first announced the agreement on April 9, one week after the company reported completion of its 60% earn-in on the 17,300-hectare Whiskey Gap uranium project in southwestern Alberta.

Nuinsco begins radon survey

Sediment and water sampling has begun on the Diabase Peninsula project in the south-central Basin, Nuinsco Resources (NWIFF.PK) reported on April 19. The company will measure radon gas to map the presence of radium on the Rowan Grid area of the 21,959-hectare property.

Purepoint completes winter work

Purepoint Uranium Group (PUMGF.PK) finished a winter campaign on Hook Lake, a 28,683-hectare property five kilometres northeast of the PLS discovery, the company reported on April 4. Work included a ground electromagnetic survey and 925 metres of drilling. Purepoint holds a 21% interest in the JV with Cameco holding 39.5% and AREVA 39.5%.

Purepoint has 11 uranium projects in the Basin, where the company's been established "well before the initial resurgence in uranium earlier last decade."

Shea Creek proud to be #3

Shea Creek remains the Basin's largest undeveloped resource and third-largest overall, after McArthur River and Cigar Lake. That's according to an April 17 resource update from UEX Corp (UEXCF.PK). Using a 0.3% U3O8 cutoff, totals for the four deposits show:

• an indicated category of 2.07 million tonnes averaging 1.48% for 67.66 million pounds U3O8
• an inferred category of 1.27 million tonnes averaging 1.01% for 28.19 million pounds U3O8.

The indicated category grew 6% since the 2010 resource, while the inferred category rose 15%. Mineralization "is still largely open," UEX stated. The company holds 49% of the project, with operator AREVA holding the balance. Shea Creek's located in the western Basin, just south of the former Cluff Lake mine.

On April 10 UEX announced AREVA granted the company an option to increase its interest to 49.9% by funding another $18 million of exploration. The previous month UEX completed its 25% interest in Beatty River, a 6,688-hectare project about 30 kilometres south of Shea Creek and 25 kilometres north of Patterson Lake South. Project operator AREVA holds 50.7%, while JCU Exploration holds 24.3%.

AREVA also holds part of the Basin's top two resources-a 30% interest in the McArthur River mine (with Cameco holding the rest) and 37% in the Cigar Lake project (Cameco 50%, Idemitsu Canada Resources 8%, TEPCO Resources 5%). Cigar Lake could begin production later this year.