CanAlaska partners with Mitsubishi on West McArthur uranium

Vancouver – CanAlaska Ventures (CVV-V, CVVLF-O) has landed Mitsubishi Development as an exploration partner on its West McArthur uranium project in the southeastern portion of northern Saskatchewan’s Athabasca Basin.

The letter of intent gives Mitsubishi rights to acquire 50% of the project for cash payments and exploration expenditures totaling $11 million over 3.5 years. The Japanese multinational can acquire a further 10% interest for terms to be negotiated later.

CanAlaska will continue as exploration operator on its West McArthur project, which is located about 10 km west of the McArthur River mine owned 70% by Cameco (CCO-T, CCJ-N) and 30% by Areva (ARVCF-O) subsidiary Areva Resources Canada. The McArthur River mine produced 18.7 million lbs. of U₃O₈ in 2005 and hosts the world’s largest and highest-grade uranium deposit with proven and probable reserves of about 389 million contained lbs. of U₃O₈ at an average grade of 25%.

Airborne geophysics (electromagnetic and gravity gradient) conducted by CanAlaska in 2005 and 2006 identified a number of uranium targets on its project. Drilling of two targets intersected the unconformity at depths of 810-to-830 metres with favourable alteration and some stringer uranium mineralization encountered. Further geophysics is planned to delineate targets for follow-up drilling.

Upon the partnership announcement, shares of CanAlaska rallied 10% to the 45-level on very strong volume. The uranium-junior posts a market capitalization of $35 million based on its 77.3 million shares outstanding.