Purepoint Uranium Group has signed a definitive option agreement with international mining group Rio Tinto Exploration Canada allowing Rio to earn a controlling interest in Purepoint's Red Willow project by spending up to $22.5m in exploration and development expenses.
Purepoint said that recent increases in nuclear power projections have put significant pressure on major uranium producers to explore for large, high value mineral deposits.
Purepoint president and CEO Chris Frostad said that the company is excited that Rio has confirmed that level of potential in its Red Willow project and chosen it as their entry point to the Athabasca Basin.
Rio is currently finalizing plans for a drilling program on the property during the first quarter of 2011.
The Red Willow property consists of nine claims on the eastern edge of the Athabasca Basin.
The Athabasca sandstone is shallow and the depth to unconformity varies from 0m to 80m.
The basement rocks are composed of intensely deformed and metamorphosed sedimentary, volcanic and plutonic rocks trending NE to SW.
Five major uranium deposits are located along a NE to SW mine trend that extends through the Red Willow project.
To date only five of Red Willow’s 21 delineated target zones have been subject to first pass drilling.