September 13 2007 – Purepoint Uranium Group Inc. (TSX-V:PTU) today entered into an agreement to grant to RYM Capital Corp., a TSX-V listed company, options to acquire up to a 51% interest in Purepoint’s Fire Eye project and up to a 50% interest in Purepoint’s William River project. Both projects are situated in the western area of Saskatchewan’s Athabasca Basin, the world’s richest uranium region.
“Over the past two years Purepoint has devoted significant resources to the advancement of these highly valued projects, and the next stages of advanced exploration and drilling will require techniques and expertise unique to this area of the Basin” said Chris Frostad, Purepoint’s President and CEO. “Through this transaction we will ensure that these properties receive the considerable focus and funding necessary to continue their rapid development, while at the same time accelerating market recognition of the potential value of these properties.”
Purepoint has been recently focused on its 100% owned Turnor Lake and Red Willow projects, along with its newer Smart Lake and Hook Lake projects joint ventured with Cameco and AREVA/Cameco respectively.
- Upon closing, RYM will purchase an immediate 20% interest in Purepoint’s Fire Eye project for $1,600,000 payable in cash and common shares of RYM;
- RYM may earn up to an additional 31% of the Fire Eye project by spending up to $2,500,000 in exploration by the end of 2009;
- Prior to February, 2008, RYM may purchase a 20% interest in Purepoint’s William River project for $3,400,000 payable in cash and common shares of RYM;
- RYM may earn up to an additional 30% of the William River project by spending up to $5,000,000 in exploration by the end of 2009;
- Purepoint’s exploration team will remain as operator of both projects.
Fire Eye Project
The Fire Eye project was selected and staked by Purepoint more than two years ago because of its apparent trend with the historic Beaverlodge uranium deposits near Uranium City. The property also displayed structural complexity as interpreted from historical airborne magnetics and was considered to be an ideal setting for uranium deposition. Purepoint has since acquired geophysical data that confirms the Fire Eye project is structurally associated with the Beaverlodge uranium belt. Based on recent airborne magnetic data, depth to basement on the Fire Eye project ranges between 400 to 1,300 metres with an average depth of 750 metres.
The Fire Eye property is located 50 kilometres southwest of the Gunnar Mine, which historically produced 19 million pounds of U3O8. It lies 80 kilometers southwest of the Beaverlodge district (an area of approximately 30 historical producing deposits that produced in excess of 50 million pounds of U3O8).
The Black Bay fault and splays off this fault are associated with the uranium deposits in the Beaverlodge area and strikes directly toward the Fire Eye project. To confirm that the Fire Eye structures were an extension of the Beaverlodge structures, in particular the Black Bay fault, Purepoint carried out a detailed, high resolution magnetic survey over the waters of Lake Athabasca. The survey results confirm this structural association between the Beaverlodge uranium belt and the Fire Eye project.
Purepoint has previously conducted a 377 line kilometre MEGATEM II airborne electromagnetic and magnetic survey over the Fire Eye property at a line spacing of 400 metres in order to confirm depths and areas of conductivity. In addition, an initial transient magnetotelluric ground survey was conducted on the property in order to identify the most effective methods of locating conductive zones and potential drill targets. A highly conductive layer was found to exist within the Athabasca sandstone, thought to be the Wolverine Point Shale, which effectively masks out or obscures conductors below it.
The magnetic interpretation has highlighted primary structures and lithologic contacts on the Fire Eye block. Areas of structural complexity are considered favourable uranium exploration targets and warrant further definition by geophysical surveys and testing by diamond drilling. The presence of the Black Bay structure under the Fire Eye claim block should allow direct exploration methods, such as reflection seismic, to accurately locate the faults. It is expected that gravity surveys will be useful to better define the fault as well as alteration zones that are associated with uranium deposition. Initial drill holes may be followed by downhole electromagnetic geophysics to locate target areas of conductive graphite for additional drilling.
William River Project
Purepoint acquired the northern portion of this very large property by permit in 2004 following its examination of older assessment and government survey data. This part of the Basin has been the subject of only very limited exploration efforts over the last 50 years. Purepoint’s examination of the assessment and government data led it to believe that the William River area hosted an intriguing structural setting conducive to uranium deposition. The original William River claims are located less than 10 kilometres east of the Carswell Structure, which hosts the Cluff Lake mine.
Following closer interpretation of available data and its early work on the northern portion of this property, in early 2006 Purepoint staked the entire southern portion of the William River region. The project is currently made up of 25 claims covering 137,236 hectares. Purepoint’s William River property is now entirely surrounded by more recently staked claims.
The Clearwater fault is a major fault structure that transects the length of the William River property. The fault is considered to be a long-lived structure that has undergone repeated activation, and is interpreted as terminating near the northern edge of the William River region. Long-term movement along this fault would have created favourable structures for trapping uranium-rich fluids along its length, particularly at its point of termination on the northern portion of the property.
The South-West corner of the William River claim group ties onto the COGEMA/UEX James Creek JV Project, a project which covers significant basement conductors detected by airborne geophysical (MEGATEM) surveys. COGEMA and UEX have encountered significant mineralization west of James Creek at the Shea Creek Project, including a high-grade intersection of 27.4% U3O8 over 8.8 metres in the Kianna Deposit area.
In June 2006, Purepoint completed a 1,700 line kilometre MEGATEM II airborne electromagnetic and magnetic survey. The survey was flown at a line spacing of 1,000 metres on the property in order to confirm depths and specific areas of interest. As follow up to that work, Purepoint then performed a sample helicopter borne VTEM survey over an area of conductivity interest on three of the southern claims.
The MEGATEM survey results, as interpreted by Condor Consulting, found several anomalies at basement depth. These form linear anomalies, striking northwest, and parallel to magnetic dyke structures that come to surface a few kilometres to the north, and are tentatively interpreted as basement graphitic sediments.
An airborne triaxial magnetic gradiometer survey is planned for this fall season to precisely isolate structurally complex zones. A gravity survey and reflection seismic survey designed to locate faults in the basement surface, specifically the Clearwater fault and associated splays, is also planned pending final cost and financing considerations.
Purepoint Uranium Group Inc. is focused on the precision exploration of more than 42 defined target areas on its nine projects in the Canadian Athabasca Basin, including its