UEX is pleased to announce the Company and JCU (Canada) Exploration Company Limited (JCU) have signed a Joint Venture Agreement (JVA) for the Christie Lake Project.
The Project is currently owned 10% by UEX and 90% by JCU. (the "Participants") UEX holds an option to earn up to a 70% interest in the Project.
While the JVA has been signed by both UEX and JCU, it will not take effect until the Christie Lake Option Agreement (see the UEX News Release, January 19, 2016) has been concluded as the result of:
UEX fully vesting a 70% interest in the Project;
UEX electing to terminate its option prior to vesting its maximum possible 70% interest as allowed under the Option Agreement; or
UEX not meeting an annual cash payment or exploration commitment requirement as outlined in the Option Agreement.
"We are pleased to work together with UEX as a partner on the Christie Lake Project and look forward to future successes."
– Tomio Hamai, Vice President, Exploration and Development, JCU (Canada) Exploration Company Limited
"I would like to thank JCU for their commitment in finalizing the Joint Venture Agreement so quickly. I am very honoured that JCU has shown confidence in UEX and our team to continue to explore and develop one of the premier uranium projects in the Athabasca Basin."
– Roger Lemaitre, President & CEO, UEX Corporation
The JVA contains industry standard terms that provide the Company with clear operating processes for the Christie Lake Project and pave the way for future development.
The Joint Venture will be overseen by a Management Committee comprised of a representative from each of the Participants. The Committee has the authority to approve annual budgets and all development decisions. Each representative will have a vote equal to the equity stake of the Participant they represent.
During the Option Agreement, UEX will remain the Operator of the Christie Lake Project and will have the right, at a minimum, to set the annual exploration program and budget to meet its commitments under the Option Agreement.
Once the Option Agreement has been concluded and the JVA comes into effect, the initial Operator of the Joint Venture will be selected by a majority vote of the Management Committee.
UEX currently holds a 10% interest in the Christie Lake Joint Venture and is working under an option agreement to earn up to a 70% interest. The Project is located approximately 9 km northeast and along strike of Cameco's McArthur River Mine, the world's largest uranium producer.
The P2 Fault, the controlling structure for all of the McArthur River deposits, continues to the northeast beyond the mine. UEX believes that through a series of en-echelon steps the northeast strike extension of the P2 Fault not only crosses the Project but also controls the two known uranium deposits on Christie Lake, the Paul Bay and Ken Pen Deposits.
The Paul Bay and Ken Pen Deposits are estimated to host a combined 20.87 million pounds of U3O8 at an average grade of 3.22% U3O8 and were discovered in 1989 and 1993 respectively. This is a historic resource estimation which does not use resource classifications consistent with NI 43-101.
The historical resource estimate was presented in an internal report titled Christie Lake Project, Geological Resource Estimate completed by PNC Tono Geoscience Center, Resource Analysis Group, dated September 12, 1997.
The historical resource was calculated using a 3 D block model using block sizes of 2 m by 2 m by 2 m, and block grades interpolated using the inverse distance squared method over a circular search radius of 25 m and 1 m height. Specific gravities for each deposit were averaged from specific gravity measures of individual samples collected for assay.
UEX plans to complete additional infill drilling on the deposits during the option earn-in period to upgrade these historic resources to indicated and inferred. A qualified person has not done sufficient work to classify the historic estimate as current mineral resources or mineral reserves. UEX is not treating the historic estimate as current mineral reserves or mineral resources.