Titan partners with Japanese group for uranium exploration

Titan Uranium (TUE-V) will receive $9 million in exploration funding over the next three years from Japan Oil, Gas and Metals National Corporation (JOGMEC), which will lead to a 50-50 partnership for a project in Saskatchewan’s Athabasca Basin.

The cash will fund the company’s Virgin Trend project, which includes the 1,500-sq.-km Virgin Trend property and the 116-sq.-m Knight property.

Both cover the trace of the Virgin River shear zone the Dufferin Lake and Black Lake Fault an extensive regional fault system with repeated movement during the period of uranium mineralization in the Athabasca.

Titan and JOGMEC first signed a letter of intent in February and have now signed the final agreement.

After three years, JOGMEC and Titan will form a joint venture for the project. JOGMEC will have the option to pay another $6 million to have the exclusive marketing rights of the mineral production of the partnership over the first 10 years of commercial production.

Funded by national and municipal governments as well as private sector corporations, JOGMEC’s mandate is to find a stable supply of natural resources for Japan.

Most of the Virgin property land has at least 800 metres of sandstone overlying the metasediments that are known to be favourable hosts for uranium mineralization.

Exploration has been minimal on the property, but Titan reports that a previous explorer found identified a large boron and clay anomaly in 2005.

In April, Titan signed an agreement with Vale Exploration Canada, a wholly-owned subsidiary of the Brazilian giant, Vale (RIO-N). Vale Exploration will fund $2 million in exploration for the first year and can choose to fund a further $10 million over the four years following that to obtain a 60% interest in Titan’s Sand Hill/Rook II projects, which total 1,000 sq. km in the south-central portion of the Athabasca.

In 2007, Titan spent $5.5 million in exploration but between 2008 and 2012, partners of Titan will have the option to spend up to $22.5 million in exploration on 3,600 sq. km of land in the Athabasca and Thelon basins to earn a portion in Titan’s interests.

Titan shares were off 2 in Toronto today, closing at 60 each on a trading volume of 384,000 shares.