Baselode Energy Corp (TSX-V:FIND, OTCQB:BSENF) is taking uranium exploration in the Athabasca back to its roots.
The company has staked nearly 265,000 hectares of ground to the south and east of the famous Key Lake uranium mill, jointly-owned by Cameco (85%) and Orano (15%), and not too far from the even more prolific MacArthur River and Cigar Lake mines either.
This is big game country as far as uranium is concerned – arguably the biggest.
But exactly what ‘big’ means in the uranium world hasn’t always been constant.
“There is an idea in the Athabasca that you have to have high-grade,” says James Sykes, Baselode’s CEO.
“But high-grade did not create the mills here. What got things going were the lower grade zones, the near-surface projects. It was only when MacArthur River came along that people started to say you need high-grade.”
And even with high grade, uranium mining in the Athabasca hasn’t always been easy, as mining at depth has historically been beset with water issues, due to the nature of the surrounding sandstone rock.
“Our idea when launching the company was to step back and look for near-surface open-pit discoveries,” says Sykes, “and accordingly all of our projects are outside of the sandstone.”
Any discoveries the company does make, ought to be relatively easy to mine, whatever the grade. And that makes the potential economics of any project far more likely to generate real margin. With Baselode, economics are the driving force, not grade.
Not that grade isn’t still a factor.
“We’re looking for 20% material,” says Sykes.
“We’re always looking for that. But I consider high-grade to be anything over 0.5%.”
Given that the global average is around 0.1%, that makes 0.5% already five times better. The historically stellar grades encountered in the sandstone to the north are not necessarily required for a project to be economic, provided it’s near-surface.
“We’re comfortable with lower grade deposits,” continues Sykes.
“When you start looking at things from a mining economic standpoint, economics trump grade, even with a lower grade.”
And in the case of Baselode’s Hook and Catharsis projects, it’s not just the potential to keep the mining to shallow depths that counts. It’s also the proximity to the great and mighty uranium infrastructure that already exists in the Athabasca.
Accordingly, the project is close to roads, reasonably close – but not on top of – major towns, and within trucking distance of the licensed mill at Key Lake, which Baselode is cautiously optimistic about gaining access to.
Hook, which lies around 70 kilometres northeast of Key Lake, is the most advanced of Baselode’s projects. It already boasts a near-surface, high-grade uranium discovery (aptly named ACKIO), which was delineated following a 79-hole drill programme last year. A follow-up drill campaign is currently underway, with 7,500 metres focused on ACKIO, and a further 2,500 metres allocated for local and regional exploration. Baselode is optimistic it will be ableto produce an NI 43-101 report by the end of this year.
So far, the signs that ACKIO conforms to the Baselode exploration model are good. The mineralization sits at a depth of approximately 25 to 30 metres below the surface, with the overburden above easily moveable.
“The capex to get down to that depth is presumably minimal,” says Sykes.
“The average grade is 0.3%. We have had positive success enriching mineralization with potential ore sorting techniques. The whole deposit simply looks good from an economics standpoint. We think this has the ability to get mined in the future.”
The company had around C$12 million in the bank at the last count, so there’s plenty of room for manoeuvre, and a low likelihood of dilution, at least in the near term.
And that means that shareholders will able to participate in the upside from any further discoveries at Hook or at Catharsis, as well as uplift from the NI 43-101 report, without worrying about any imminent dilutive fundraisings.
What’s more, with drilling ongoing, newsflow ought to be fairly frequent in the coming months, and that in turn will keep the story at the forefront of investors’ minds.
And, with the uranium price performing the best in has a decade as the world’s green lobbies wonder where else they can go but nuclear energy, the outlook for Baselode looks very favorable indeed.
Sykes cites a Cameco statement to the effect that the uranium spot price has never before been this high at this early stage of a uranium cycle.
Could this be the start of the best uranium cycle in history?
Actually, it just might.
And Baselode isn’t waiting around.
“We do believe this can be a mine, and we want to get in on this current cycle,” says Sykes.