In one of the few exploration projects it is funding next year, Cameco Corporation (TSX: CCO; NYSE: CCJ) and its joint-venture partners Orano Canada and Purepoint Uranium (TSXV: PTU) are planning a 36 km ground electro-magnetic survey and 6,000 metres of diamond drilling at their Hook Lake uranium project in Saskatchewan.

Cameco owns 39.5% of the project in the province’s Patterson uranium district, with Orano Canada holding an equal 39.5% stake and Purepoint, the operator, 21%.

The 2019 winter drill program will follow up on a new mineralized shear zone that extends along the Patterson Corridor. The shear runs through the project’s Dragon zone and is on trend with its Spitfire discovery.

The Patterson uranium district is a structural corridor situated on the southwestern edge of Saskatchewan’s Athabasca Basin, which has been interpreted to extend at least 50 km, and hosts Fission Uranium Corp.’s (TSX: FCU) Triple R deposit, NexGen Energy’s (TSX: NXE) Arrow deposit, and Spitfire.

The Arrow and Triple R deposits are 7 km and 14 km to the southwest of Spitfire, respectively, and are in the same geological structural that continues another 8 km through Spitfire to the northeast and then into Denison Mines Corp.’s (TSX: TSX: DML) ALX claims at its Hook-Carter project.

The $3 million exploration project planned for 2019 “speaks to Cameco’s feelings about the project,” Chris Frostad, Purepoint’s president and CEO. “Majors don’t invest in exploration projects that don’t have the potential to be Tier 1 deposits, or more than 100 million pounds of U308.”

The joint-venture partners are focusing exploration on an area between their high-grade Spitfire discovery of 2015 (53.3% U308 over 1.3 metres within a 10 metre interval assaying 10.3% U308 starting from 220 metres below surface), and the Dragon zone, about 6 km to the northeast. Dragon was found at the end of 2016.

Spitfire sits on the southernmost claim line adjacent to NexGen’s project. The Dragon area has an identical geological setting as that presented at Spitfire, Frostad says, only significantly larger. “Not only that,” he adds, “but we could see that the structure running up from Triple R, through Arrow and into Spitfire appeared to connect directly through to Dragon. That area requires additional geophysical data to refine the targets, which is job one this season.”

Uranium doesn’t trade on an open market like other commodities, so buyers and sellers negotiate contracts privately. Utilities typically purchase their fuel under four to ten year contracts in order to lock in the price.

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