PUREPOINT URANIUM GROUP INC. MONTHLY ATHABASCA BASIN EXPLORATION UPDATE
June 2021
Saskatchewan's Undiscovered Uranium Super-Deposit
Source:SightlineU3O8
In 1981, the Cigar Lake uranium deposit was discovered in Saskatchewan's Athabasca Basin. A monster in its day, eventually sizing up at 290MM lbs. of U3O8 at a mine grade of 15%! Seven years later and 45 km (28 miles) away the McArthur River deposit was found, dwarfing Cigar with its 500MM lbs. of U3O8 at a mine grade of 22%. Certainly, the lion's share of the Athabasca Basin's rich uranium endowment had been secured.
But wait …… 30 years and over $2B in exploration spending later, the Basin serves up two more world
class deposits 250 km (155 miles) away on the other side of the region; Triple R and Arrow coming in at 140MM and 300MM lbs. of U3O8 respectively. Over the course of time, 39 deposits have been identified across the Athabasca Basin totaling over 2B lbs. of uranium - 10 of which came in at over 50MM lbs of U3O8 each.
Known deposits are scattered across the Athabasca Basin, which covers approximately 100,000 square kilometres (39,000 square miles) of the Province of Saskatchewan Canada. Given the size of the Basin and the time, cost and difficulty in identifying a single deposit, how can there not be more out there.
More to the point, is it possible to calculate what is waiting to be discovered? Let's give it a shot!
Calculating Potential Endowment
UxC Consulting Spot Price
(US$)
April 30, 2021 | $29.05/lb U3O8 |
May 31, 2021 | $31.40/lb U3O8 |
Change of +$2.35/lb U3O8
UxC Consulting Long-Term Price
(US$)
April 30, 2021 | $32.50/lb U3O8 |
May 31, 2021 | $32.00/lb U3O8 |
Change of -$0.50/lb U3O8
Key Basin Announcements
05-04-2021: Denison Delivers Offer to Acquire 100% Ownership of JCU (Canada) Exploration Company, Limited
05-04-2021: Standard Uranium Provides Drilling Update at its Flagship Davidson River Project
05-05-2021: UEX responds to Denison's offer to acquire JCU (Canada) Exploration Company, Limited
05-10-2021: Skyharbour Completes Geophysical Program and Mobilizes for Upcoming Drill Program at its High Grade Moore Uranium Project
Extensive exploration drilling over many decades has shown that the Athabasca Basin is clearly a reservoir of uranium. The "background" amount of uranium contained in drill samples can approach what is typically considered "minable" in other parts of the world. As a matter of fact, if we were to mine the entire Basin to an assumed depth of 5 km. (a ridiculously uneconomic endeavour), it has been estimated that we would produce about 125B lbs. of uranium.
If we limited our mining to a more reasonable depth of 200 metres and only on those trends and regions around the Basin, known to have discovery potential, a similar calculation demonstrates a total potential of approximately five billion pounds of uranium. With 2B already discovered, there would appear to be about 3B more to find.
A more refined calculation as to "what's left" may be possible thanks to Harvard linguist, George Kings- ley Zipf who in 1949 formulated Zipf's Law, which describes the relationship between the size and rank of discrete phenomena. It is, in fact, a variant of the 80/20 rule that observes most things in life are not distributed evenly (i.e. 80% of a result is created by 20% of the input population).
Originally established to describe the frequency of words in natural language, Zipf's Law was later applied to other phenomena such as income distribution among individuals, city populations, market share and, ultimately, sizes of oil, gas and mineral deposits.
... Continue on Page 3
05-11-2021: Purepoint Uranium: Hook Lake JV Project Update
05-13-2021: Red Cloud Securies initiates coverage on Purepoint Uranium ahead of its 2021 Uranium Conference
05-13-2021: Purepoint Uranium provides overview of Red Willow Project targets for upcoming diamond drill program
05-17-2021: Forum Energy announces elevated uranium and boron from Fir Island Project
06-01-2021: Purepoint Uranium provides first update at Red Willow Drill Program
Monthly Athabasca Basin Exploration Update
Month over Month Uranium Stock Performance
(as of May 31, 2021)
Producing, Development & Advanced Exploration Companies
Peninsula Energy
Nexgen Energy
Denison Mines
Cameco
Average | 13.06% | ||
Laramide Resources
Uranium Participation
UEX
Fission Uranium
-30 .0 0% | -20 .0 0% | -10 .0 0% | 0.00 % | 10 .0 0% | 20 .0 0% | 30 .0 0% | 40 .0 0% | 50 .0 0% | 60 .0 0% |
Athabasca Basin Exploration Companies
PUREPOINT URANIUM
Skyharbour Resources
Forum Energy
Fission 3.0
Standard Uranium
Average | 2.5% |
IsoEnergy
ALX Resources
CanAlaska Uranium
Azincourt Energy
-30 .0 % | -20 .0 % | -10 .0 % | 0.0% | 10 .0 % | 20 .0 % | 30 .0 % | 40 .0 % | 50 .0 % | 60 .0 % |
June 2021
Monthly Athabasca Basin
Exploration Update
Presented by Purepoint Uranium Group Inc. (TSXV: PTU), the Monthly Athabasca Basin Exploration Update is a monthly newsletter that gathers information on what's happening with uranium exploration companies in the Athabasca Basin, including its monthly exploration news, stock performances as well as the spot- and long-term uranium prices.
Purepoint Uranium Group Inc.
TSXV: PTU
Purepoint Uranium Group Inc. is a uranium exploration company focused on precision exploration of its projects in the Athabasca Basin.
Its flagship project is the Hook Lake, a joint venture with two of the largest producers in the world, Cameco Corporation and Orano Canada.
Together with its flagship project, the Company operates 12 projects across approximately 175,000 hectares of claims throughout the Athabasca Basin.
For more information, please visit: www.purepoint.ca.
Be in the Know
Click here to receive the Monthly Athabasca Basin Update via email
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Disclaimer information:
All information provided in this newsletter is based upon sources that Purepoint Uranium Group Inc. (Purepoint Uranium) believes to be reliable. Purepoint Uranium does not guarantee their accuracy or completeness. Any and all statements as of the date of this newsletter are subject to change without notice. All information provided on this newsletter must be understood as information presented for discussion only and not investment advice. Purepoint Uranium advises all readers and subscribers to seek advice from a registered professional securities representative before deciding to trade in stocks featured on this newsletter or any stocks for that matter. All statements and expressions of the companies featured are not meant to be a solicitation or recommendation to buy, sell, or hold securities. Purepoint expressly disclaims any obligation to update or revise any such forward-looking statements.
Copyright ©2021 Purepoint Uranium Group Inc. All rights reserved. | Page 2 |
Monthly Athabasca Basin Exploration Update
Saskatchewan's Undiscovered Uranium Super-Deposit(cont'd)
Zipf's Law and Resource Endowment
There have been numerous technical publications issued on the mathematical formulation, calculation and application of Zipf's Law but in its simplest form it boils down to the following:
- In geology, Zipf's Law predicts how many entities (deposits) may be left in a sequence of decreasing size assuming we know the size of the largest deposit.
- When all deposits are ranked in order of size, the second largest deposit will be one-half the size of the largest deposit. The third largest deposit will be one-third the size of the largest deposit. The fourth largest deposit will equal one quarter the size of the largest deposit, etc.
- Starting with the largest deposit, the remaining theoretical deposits can all be calculated and a Zipf Curve is determined.
- Generally, the largest deposit identified to date is assumed to be the largest deposit existing in the region. This is based on the fact that the largest known deposit would typically have the largest footprint and would have been an early discovery in the history of the area.
- All known deposits are then matched to a correspondingly sized predicted deposit.
- By eliminating the known deposits from the list, we are left with those yet to be found.
Once completed the resulting Zipf Curve will take this shape:
The stacked bars represent the actual deposits known to exist. The first stacked bar matches the first point on the Zipf graph. The gaps represent deposits not yet identified.
Zipf's Curve in the Athabasca Basin
As noted, there are currently 39 known deposits in the Athabasca Basin; a valid sample size for this sort of analysis. If we assume that McArthur River is, in fact, the largest deposit in the Basin and line up the known deposits by size, we start to see a problem.
Deposit Name | Resource Size (lbs. U3O8) | Zipf Predicted Deposits (lbs. U3O8) | |
McArthur River | 500,000,000 | 500,000,000 | (assumed largest) |
Arrow | 300,000,000 | 250,000,000 | (1/2 x largest) |
Cigar Lake | 290,000,000 | 166,666,666 | (1/3 x largest) |
Key Lake | 155,000,000 | 125,000,000 | (1/4 x largest) |
Triple R | 140,000,000 | 100,000,000 | (1/5 x largest) |
Eagle Point | 113,000,000 | 83,000,000 | (1/6 x largest) |
All of our deposits are, on average, nearly 40% larger than the Zipf Curve would predict. As a matter of fact, it appears that we have too many larger depos- its. Further, if you add up all of the projected deposits set out on the entire Zipf Curve it totals only 3.5B lbs. of U3O8.
... Continue on Page 4
Copyright ©2021 Purepoint Uranium Group Inc. All rights reserved. | Page 3 |
Monthly Athabasca Basin Exploration Update
Saskatchewan's Undiscovered Uranium Super-Deposit(cont'd)
As we try to line up the known deposits with predictions, what becomes evident is that McArthur River, in fact, may not be the largest deposit in the Basin. By assuming an unknown larger deposit, our known deposits more appropriately align with the Zipf predictions.
Deposit Name | Resource Size (lbs. U3O8) | Zipf Predicted Deposits (lbs. U3O8) |
Undiscovered Deposit | - | 1,000,000,000 |
McArthur River | 500,000,000 | 500,000,000 |
Arrow | 300,000,000 | 333,000,000 |
Cigar Lake | 290,000,000 | 250,000,000 |
Undiscovered Deposit | - | 200,000,000 |
Key Lake | 155,000,000 | 167,000,000 |
Triple R | 140,000,000 | 143,000,000 |
Undiscovered Deposit | - | 124,000,000 |
Eagle Point | 113,000,000 | 111,000,000 |
Undiscovered Deposit | - | 100,000,000 |
Moreover, the sum of the predictions from this set of numbers totals in the range of 5 billion pounds - more in line with our macro estimate - and results in the following curve:
So?….What's Left
It should be pointed out that Zipf's Law is based on observation, not theory and, as with any law, there are restrictions and assumptions that cannot always be met.
If one is to lend credence to the predictions provided by Zipf's Law, we can draw the following conclusions:
- Somewhere, lurking in the Athabasca Basin, there is a super-deposit in the range of 1 billion pounds of U3O8 - approximately the same size as the McArthur River, Arrow and Cigar Lake deposits combined;
- There are three more Tier 1 deposits of between 100-200,000,000 pounds U3O8 yet to be discovered;
- There are six more deposits out there ranging between 50-90 million pounds of U3O8;
- One could re-compile the analysis looking at the Eastern Basin as a separate region from the Western Basin. Such an analysis, however, results in the same conclusion - there is an unfound monster waiting to be found in the East. Further, the Western deposits are still being explored and continuing to grow. The "largest" deposit is not yet defined.
One thing is for sure. You cannot find a deposit if you are not drilling. As uranium exploration in the Basin heats up once more, we may soon see more deposits to add to our analysis. •
Written by Chris Frostad, President & CEO of Purepoint Uranium for Sightline U3O8.
Copyright ©2021 Purepoint Uranium Group Inc. All rights reserved. | Page 4 |
Monthly Athabasca Basin Exploration Update
Red Cloud Securities Initiates Coverage of Purepoint Uranium Group Inc.
TSXV: PTU
05-13-2021
Ahead of its Uranium Conference on May 13, 2021, Red Cloud
Securities initiated Research Coverage on Purepoint
Uranium, wih a BUY (Speculative) rating and a C$0.25 target price.
We do not distribute research on Purepoint prepared by financial analysts as not to appear to be endosing the report's facts, assumptions and reccomendations.
Please note that any opinions, estimates, or forecasts regarding Pure- point's performance made by the research analyst(s) are theirs alone and do not represent opinions, forecasts, or predictions of Purepoint or its management. Purepoint does not, by its reference or distribu- tion, imply its endorsement of, or concurrence with, such informa- tion, conclusions, or recommendations, and will not be liable for any claims of any nature arising from or in connection with the report.
To access a copy of the report, please contact
Red Cloud Securities here.
Purepoint Uranium featured at the Red Cloud 2021 Uranium Conference: Uranium: Fuelling the Path Towards Electrification
TSXV: PTU
05-13-2021
On May 13, 2021, Red Cloud Financial Services hosted a full day
Uranium Conference.
The Keynote speaker was Grant Isaac, Chief Financial Officer at Cameco and David Talbot, Managing Director, Equity Research at Red CLoud Securities also hosted a firechat with Adam Rodman (Segra Capital Management), Arthur Hyde (Segra Capital Manage- ment) and Michael Alkin (Sachem Cove Partners.
To view all video replays, click here.
To view Purepoint's replay, click here.
Copyright ©2021 Purepoint Uranium Group Inc. All rights reserved. | Page 5 |
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