Delta Uranium options property in Nfld.

Delta Uranium (DUR-T) has picked up a geologically diverse uranium project in Western Newfoundland that will see the company spend $3 million in exploration over a three year period.

Delta has signed an option agreement with Spruce Ridge Resources (SHL-V) for a 60% interest in its Deer Lake Basin uranium project.

In addition to the required exploration expenditures, Delta must pay Spruce Ridge a total of $600,000 in cash, issue a total of 800,000 Delta shares to Spruce Ridge.

The agreement says that once Delta has earned its 60% interest, it will form a joint venture with Spruce Ridge for the remaining 40% of the project with Delta continuing as the operator. If Spruce Ridge doesn’t want to participate, its interest will be diluted and will revert to a 1% net smelter returns royalty if its interest falls below 10%.

The property spreads over an area of 852 sq. km and covers about half of the Carboniferous-age Deer Lake sedimentary basin. About 90% of the property is underlain by rocks of the Rocky Brook formation, which hosts numerous historic uranium occurrences.

The northern part of the property is outside of the Dear Lake basin and covers a 30 km of a major tectonic zone that transects the island and is part of a continental-scale structural trend that’s known to host uranium occurrences as far away as South Carolina.

Within the basin there are two types of uranium mineralization that have been identified.

In the Rocky Brock formation on the property, there have been 56 recorded occurrences of uranium mineralization, which were all located in the banks of rivers and streams that have cut through the overburden to expose bedrock. The uranium is associated with accumulations of organic material in shaley limestone similar to calcrete. Surface samples have assayed up to 3.73% U3O8 and 1.05% copper and 65.9 grams silver per tonne.

Delta says the basin also has the potential to contain sandstone-hosted uranium as red sandstone boulders containing up to 10% U3O8 have been found on the neighbouring property held by Altius Minerals and JNR Resources.

The other type of uranium showing is in the Incinerator Road group where uranium mineralization is exposed in outliers of conglomerate on a steep hillside at the northwestern edge of the basin. The hillside represents an ‘exhumed unconformity’ where carboniferous sediments lie on much older crystalline limestone and dolomite.

Surface samples have assayed up to 0.095% U308. Spruce Ridge also drilled 14 holes in 2007, half of which encountered anomalous radioactivity. The best assay from drill core was 30 cm grading 0.031% U3O8 and the best intersection was 7.94 metres grading 0.01% U3O8.

Outside of the Deer Lake Basin is the Determination Zone, an area of clay-altered felsic volcanics that have returned assays up to 0.275% U3O8.