Denison, CanAlaska to drill as uranium price surges

CanAlaska Uranium Ltd. [CVV-TSXV, CVVUF-OTCQB, DH7N-Frankfurt] said Thursday its joint venture partner Denison Mines Corp. [DML-TSX] is set to start a 2,400-metre summer drilling program at the Moon Lake South uranium project in Saskatchewan.

The moves comes as the price of uranium has been propelled to its highest level since 2015 amid reports of a surge in buying by the Sprott Physical Uranium Trust [U.UN-TSX, U.U-TSX]. Sprott has amassed over 24 million pounds of uranium, sometimes buying more than 500,000 pounds in a single day, according to its website.

The spot price for U308 has moved to US$39 a pound from a low of US$18.50 in late 2016, recently sparked active trading in the uranium stocks.

On Thursday, CanAlaska eased 1.65 or $0.01 to 60 cents. The shares are trading in a 52-week range of 84 cents and 18.5 cents.

Denison eased 3% or $0.055 to $1.78 on volume of 2.4 million Denison shares trade in a 52-week range of $2.29 and 40.5 cents.

Under an option agreement with CanAlaska, Denison can earn a 75% stake in the Moon Lake South project. The project contains a 5.0-kilometre-long conductor corridor known as the Cr-3 conductor, which is located approximately 2.0 kilometres west of the K-trend, host to the Gryphon Deposit on Denison’s adjacent Wheeler River property.

Denison drilled one diamond drill hole near the southern boundary of the Moon Lake South project and confirmed the location of a new uranium target. The hole intersected an interval of fractured and friable sandstone with uranium mineralization immediately at the unconformity (0.1% U308 over 0.5 metres)

CanAlaska holds a 25% stake in the project and will fund the company’s share of the 2021 exploration program. Drilling is expected to begin on September 10, 2021. The program will evaluate four of the highest priority targets identified during surveys that were conducted in 2017 and 2020.

CanAlaska Uranium holds interests in approximately 24,000 hectares in Saskatchewan’s Athabasca Basin. The company is a project generator that is positioning itself for discovery success in the region.

Denison’s Wheeler River project is the largest undeveloped high-grade uranium project in the eastern portion of Saskatchewan’s Athabasca Basin. Proven and probable reserves at the site stand at 109.4 million pounds of U3O8. That includes 141,000 tonnes at 19.1% U3O8 or 59.7 million pounds in the Pheonix zone, and 1.26 million tonnes at 1.8% U3O8 or 49.7 million pounds in the Gryphon zone.

“The Moon Lake South project offers an intriguing set of targets that have been developed over the last number of years by our new joint venture partner, Denison,” said CanAlaska CEO Cory Belyk.