Cameco forms alliance with UNOR

Vancouver — Uranium producer Cameco (CCO-T, CCJ-N) has acquired a 19.5% stake in UNOR (UNI-V, UNOFF-O), a junior exploration company formerly known as Hornby Bay Exploration, through a private placement of 22.9 million shares valued at $9.2 million. The parties also formed a “strategic alliance” that includes terms and conditions related to ongoing exploration and potential future mine development.

Cameco and Toronto-based UNOR will have the right of first refusal on each other’s uranium properties in a specified area of Nunavut and the Northwest Territories. Cameco also has the right to nominate one person for election to UNOR’s board, as long as it holds 10% of the junior’s outstanding shares.

As long as Cameco holds 16% of UNOR, it will also have the right to participate in future equity financings, match equity or debt required for mine development, operate any mines developed on UNOR’s properties, and market any uranium produced. For its part, UNOR has agreed to consult with Cameco on its exploration and development programs.

Cameco president Jerry Grandey said that the agreement strengthens the company’s efforts to identify “new uranium reserves for the future.” He also noted that Cameco gains the right to participate in the exploration of new regions and “the expertise of a solid technical team” to add its knowledge base.

Saskatoon, Sask.-based Cameco is the world’s largest uranium producer, with much of its production derived from high-grade mines in Saskatchewan’s Athabasca basin, which currently produces about 30% of the world’s uranium. The Athabasca basin is the most developed and explored of three Proterozoic basins considered prospective for the discovery of unconformity-related uranium deposits in Canada’s North. The others are the Thelon basin in the eastern part of the Northwest Territories, and the Hornby Bay basin in western Nunavut.

UNOR has focused its exploration effort in the virtually unexplored Hornby Bay basin, which is viewed as having similar geological characteristics as the Athabasca basin.

The company recently launched a $6-million program scheduled to run for the next six months at its 226 uranium mineral claims covering 2,159 sq. km in western Nunavut.

UNOR notes that previous work programs have identified 18 “high-potential, drill-ready uranium targets” that will be further explored this summer. All permits are in place for the program, which will include at least 5,000 metres of drilling, geological fieldwork and ground geophysical surveys.