Bayswater Uranium has executed an Option Agreement with CanAlaska Uranium to explore Bayswater’s Collins Bay Extension uranium project in the Athabasca Basin, Canada. The Collins Bay Extension contains a number of exploration targets within the Snowbird and Fife Island areas.

Under the terms of the Option, CanAlaska will act as the exploration operator and may earn a 51% participating interest in the project by undertaking a minimum of Cdn$4m in exploration expenditures within five years and issuing a total of CanAlaska 500,000 shares to Bayswater over this period. CanAlaska may increase its participating interest in the Project to a 70% level by undertaking a further Cdn$2m in exploration expenditures over a period of three years.

The company has reported that the CanAlaska’s prime focus in the current exploration season is to re-visit and drill-test the structurally-controlled uranium mineralization intersected in 1984 Minatco drill holes MWLD8 to MWLD13. The geological trends mapped in the Eagle Point-Collins Bay uranium mines and surrounding areas extend to the north and east onto the Collins Bay Extension property.

The company adds that the target containing the source of the Pow Bay uranium mineralized boulder train, north-east of the Rabbit Lake deposit, is thought to be under the lake-covered portion of the southern part of the Collins Bay extension property. The geology and target figures show the strong structural trends and zones of conductor targets on strike.

Since 2005, CanAlaska has carried out over 4,000 line kms of marine seismic survey mapping within areas of the Athabasca Basin. CanAlaska intends to carry out an initial drill program on the Fife Island, ‘VIC’ zone mineralization, commencing in August, 2009.

Peter Dasler, President of CanAlaska, said: “CanAlaska has been focusing its 2009 summer exploration on drill testing near-surface uranium targets on the Northern Rim of the Athabasca Basin, on its Black Lake, Fond Du Lac and Grease River projects. The Collins Bay Extension Project hosts multiple zones of known uranium mineralization, and on Fife Island, at least one zone of ore-grade values. This latter target has not been investigated since 1984. The publicly available updates on style and geology of the mineral deposits at the current mines in the trend, coupled with the advanced modern geophysical modeling that CanAlaska staff is regularly carrying out, provides us with the knowledge to define very strong exploration targets on the project.”

George Leary, President of Bayswater, said: “This Agreement enables us to continue to advance the Collins Bay Extension Project while we focus on our advanced-stage properties and opportunities.”