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Message: Grandich updates Argus
Argus put out a corporate update yesterday; I spoke with Michael Collins, Argus’s president to get some further insight as to what we might expect for this year.
PG: I see off the bat, that you are getting started on the Kaituma uranium project. While it hasn’t really been highlighted before, I guess that from a seasonal point of view, this uranium project in Guyana can fill out the year’s hopeful news flow.
MC: Yes, while this was not by design, due to the shorter nature of the working season in the Yukon and the near year-round ability to work in Guyana, we should be able to provide the market with constant news flow through the year. We had been diligently working in the background for the past 2 years on finalizing title and an exploration license for Kaituma. While we were excited about the project due to its prospective size, geology and the existing infrastructure and logistics, we needed to refrain from over promising timeframes as much of that was out of our hands and in those of the Guyana government’s. But now that all is in place we are ready to go!
PG: Ok, you have spoken in the past of the existing infrastructure – close proximity to deep-sea port, roads, rail grade and active airstrip with scheduled service; as well as potential world-class size. Can you fill us in a little more on the background of the project and what indications do you have on the potential of the property.
MC: Sure, and just want to mention that there is a lot of detail available on the website. As to the potential of the project without getting too technical, quite simply, it is one of the largest un-drilled uranium targets in the world with historic data, radiometric/magnetic surveys, groundwork, sampling and regional geology all pointing to the potential for world-class size, economic uranium mineralization. We just need to drill!
Our approach to the Kaituma project is not unlike that of our project in the Yukon. Argus has looked at both of these opportunities from a highly technical point of view, reviewing as much geological data and evidence as possible. As you probably have mentioned in the past, the Company is lead by two professional geologists who study these projects before claims are staked or the drills start turning in order to improve the odds for success as much as possible. This methodology is a large part of our success last year in the Yukon where we were able to triple the historic gold resource with just a handful of drill holes.
In the case of Kaituma, there has been substantial geological work done over the large licensed area for which we own much of the data. Historic exploration work includes ground uranium surveys by Cogema in 1980 and airborne magnetic/radiometric surveys by BHP in 1996-98 where a large, 70 square kilometer radiometric anomaly was identified. Further work programs in 2007 by Stratagold show a high correlation between BHP’s radiometric surveys and Cogema’s groundwork.
Geologically, similar uranium deposits have been discovered in northeastern Brazil including the Lago Real and Itataia uranium mines and the Rossing Mine and the Husab uranium deposits in Namibia. These types of deposits are typically large, over 100 million pounds containing low to moderate uranium grades and have been mined by open pit in Africa, Eastern Europe and South America.
PG: When are you anticipating to have the drill turning and how soon should we have results from the first phase?
MC: As mentioned in our news release, in the first phase we are going to drill three fences of 5 holes each across the 1 kilometer width of the 1 kilometer X 10 kilometer target area. We expect to have the drill mobilized to Guyana in the next 2 weeks. These initial holes are relatively shallow to test for the uranium mineralization close to surface and in the horizons just beneath the weathered cap rock, approximately 20-30 meters deep. We would anticipate results to start coming back before summer this year.
PG: In regards to the Yukon, I have iterated to my readers that last year did not live up to expectations, could you comment on that, and how it relates to Argus?
MC: Yes, with such a short time window in the Yukon, it was a tough time for everyone up there last year with weather and laboratory related delays. As well perhaps because of the shortened window, some the bigger plays weren’t able to live up to initial expectations. I personally still believe that there is a huge potential yet to be played out up there. For Argus, due in part to our technical background and corporate culture, we entered into last season with the belief that we had the potential to prove up a district-sized gold deposit/series of deposits in and around an existing, yet small historic gold resource – yet we wanted to make sure that we had the best chances for results without “blowing our brains out”. As a result, we were able to increase and upgrade the historic gold resource at the Main Zone by 200%+ and make new discoveries to extend the reaches of what we believe could be a gold mining district.
I guess our prudence paid off, as we got a big foot-in-the-door with very little capital expended last year with results validating and warranting a much larger scale program for this year. We will be announcing the program for this year once it is finalized.
PG: One last question regarding the financing of the company for these activities this year, how’s that coming along?
MC: All things being equal, we are quite confident that we will be able to continue to raise the capital for this year’s program through the current equity raise as well as potential JV or sale of non-core assets. The response has been positive on the recent equity raise despite the quiet capital markets as of late, and we have had several inquiries into some of our other projects. We will continue to keep the market informed as things develop.
PG: Thank you for the insight Mike.
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