Santoy and Sparton option BC uranium project

Vancouver – Santoy Resources (SAN-V) and Sparton Resources (SRI-V) have delved into the controversial hunt for British Columbia uranium by optioning the Blizzard deposit, located in the southern Okanagan Valley.

The Blizzard uranium deposit was first staked by Lacana Mining in 1976 and optioned to a group including Norcen Energy Resources, Campbell Chibougamau Mines, E & B Explorations and Ontario Hydro. The project had over 21,000 metres of drilling in almost 500 holes, leading to a reserve estimate of 2.2 million tonnes grading 0.214% U₃O₈ (using a 0.025% U₃O₈ cut-off grade) followed by a positive feasibility study in 1979. The reserve calculation pre-dates National Instrument 43-101.

However in 1980, under intense pressure from environmental groups and a royal commission, the provincial government imposed a moratorium on all uranium exploration and development lasting several years. The hunt for the metal never really reemerged after the moratorium lapsed in 1987, primarily due to the collapse in the uranium price to below US$10 per pound U₃O₈.

Blizzard is a secondary-type deposit within a Tertiary-aged paleo-drainage channel. Uranium mineralization is believed to have been concentrated by leaching of nearby intrusive rocks with elevated uranium content, subsequently capped and preserved by younger volcanic rocks.

Santoy and Sparton, on a 50-50 joint venture basis, are earning a 100% interest in the project from an independent prospector who recently registered the core claims, covering the deposit, through the province’s new electronic staking mechanism. The prior owner of the deposit has filed notice with the Gold Commissioner, under the B.C. Mineral Title Act claiming “superior right, title and interest” to the claims.

The earn-in terms for the duo includes cash payments of $450,000 over four years, the issuance of 500,000 shares of Santoy and 2 million shares of Sparton over two years, a $1.5 million work program and advanced royalty payments of $50,000 per year following year five of the agreement. Additionally, a royalty is payable on sales from any future production.

Despite its detractors, uranium exploration in B.C. appears to be gaining momentum and interested participants as the metal approaches the spot price level of US$30 per pound U₃O₈.