Vancouver- There is critical mass building around the Patterson Lake uranium camp in the western reaches of Saskatchewan’s Athabasca Basin, and Vancouver-based junior Azincourt Uranium (TSXV:AAZ) hopes to be the next outfit to bring a significant discovery to market.

In late April the company signed a joint-venture agreement with Fission Uranium (TSXV:FCU) on a 274-sq.km piece of land called the Patterson Lake North (PLN) project, and Azincourt is wasting little time kicking-starting its earn-in and exploration requirements.

According to Azincourt president and CEO Ted O’Connor, Fission originally staked the PLN concessions in 2004, and invested roughly US$4.7 million in exploration on the project through 2008. Fission’s attention was then diverted by the discovery of its J-Zone deposit at it’s Waterbury property, which Denison Mines (TSE:DMC, NYSE: DNN) essentially purchased a 60% stake in for $70 million earlier this year.

During the acquisition Fission spun-out its Patterson Lake holdings, and would eventually make a significant discovery at its Patterson Lake South (PLS) joint-venture with Alpha Minerals (TSXV:AMW).

“They did a quite a bit of work on [PLN] over those four years,” O’Connor comments during an interview. “During that time they completed airborne and ground-targeting geophysics, as well as about six drill holes that mode it to the unconformity. Obviously their focus shifted when the J-Zone discovery near Rio Tinto’s (TSE: RIO, NYSE: RIO) Roughrider deposit, and then following the Denison deal it was PLS that moved to the forefront, so they were looking for someone to help fund exploration at PLN.

Fission would initially approach Azincourt chairman Ian Stalker about the opportunity, but due to other obligations Stalker would bring in O’Connor to helm the company. O’Connor spent the last 19 years with major Cameco (TSE: CCO, NYSE: CCJ) serving as director of corporate development, where he was responsible for evaluating, directing and exploring for uranium deposits throughout the Americas, Australia, and Africa. O’Connor has plenty of experience in the Athabasca Basin, having worked on Cameco’s McArthur River deposit and Hook Lake joint venture with Areva.

The eventual terms of the arrangement will see Azincourt earn a 50% interest in PLN conditional on US$12 million in exploration expenditures and cash payments of US$4.5 million over the next four years. O’Connor says that Fission has taken its first $500,000 cash consideration in shares, and will likely continue to opt of equity-based payments. Fission will act as operator – and maintain a 2% net smelter royalty return – though O’Connor will be actively working with the PLN team during exploration efforts.

“Before I got into any of the technical data on PLN, I had known the area around the project. I’ve worked up there with Cameco, and when I started looking at some of the material I really liked what I saw,” O’Connor continues. “I told the Azincourt gang that all the decisions I’ve ever made in regards to getting involved in a deal is based on geology. That’s where I come from. I have an eight-to-ten year history doing deals and managing partnerships. I do have to believe in this project, it has a lot of good things going for it.”

As with many areas in the western portions of the Athabasca Basin, PLN is pretty much fully covered with overburden that runs from around 30 metres to 500 metres in thickness. That can make exploration a bit tricky, but the Azincourt-Fission team already has several targets identified for a US$1-million winter drill programs thae companies intend to run when the ground freeze makes moving drills more economic. In the meantime the partners will spend $530,000 on a geophysics program consisting of airborne and ground surveys in a bid to shore up an exploration grid.

O’Connor explains that PLN can basically be divided into three separate geological areas. The southern portion of the project hosts a parallel trend to PLS that has the similar geological flexure. Uranium mineralization at PLS is relatively shallow, which makes targeting more straightforward compared to drilling for unconformity under thicker layers of overburden. To the north it becomes necessary to punch below between 350 metres and 500 metres of overburden when drilling. PLN’s northern areas will be the prime targets for depth penetration surveys via airborne geophysics aimed at picking up conductors.

At the centre of PLN lies the third area, and, according to O’Connor, the most interesting at this stage.

“We have perhaps two-hundred metres of unconformity elevation change on that centre area,” he explains. “That is coupled with a distinct demagnetization in the basement, so it could be a metasedimentary belt. I’ve seen a drill hole that has clear metasediments, which are the great host rocks up there. We haven’t seen much in the way of graphite in those holes and we haven’t quite determined the orientation of the unconformity offset yet, but it’ll be our target.

Azincourt is obligated to spend US$1.5 million in exploration this year, which will be covered by the geophysics and drill programs. By April 2016 the company will be obligated to kick-in another US$6 million, while the final US$4.5 million in exploration is due by April 2017. Azincourt receives 20% in PLN over its first two years of investment, and 30% over the final two years.

The company raised US$1.5 million in late June to meet its 2013 work requirements at PLN. Azincourt issues 10 million shares at a price of 15(cents????) per share during its raise, and has been on the upswing ever since its agreement with Fission was announced. The company’s shares have jumped 200%, or 18 (CENTS) since early April en route to a 27 (CENT) close at the time of writing. Considering Azincourt has just 14.2 million shares outstanding its daily trade volumes are relatively high at 106,000 shares.

O’Connor explains that another uranium acquisition is a priority moving forward, and says the company is not constrained by “geography or models” when searching for potential projects. He explains that Azincourt does not necessarily need to be solely exploring the Athabasca Basin, and that there may be opportunities to pick-up in-situ uranium resources from other companies that are struggling with financing in a tough junior market.

“In spite of what the spot price has done in the past two or three weeks there is a lot of bubbling in the market [in regards to uranium],” he concludes. “Everyone anticipated that shortfall in supply, while demand is going up. I can’t see that down-blending and dumping continuing. In light of the contracting that utilities and sovereign nations do with producers, which tends to be mid-longterm, I think the spot price is not as relevant as people looking at the spot market think it is.”


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