Okapi targets white-hot USA Uranium Market

Perth-based Okapi Resources has entered into an agreement with Canada’s ALX Resources to acquire a portfolio of six advanced exploration projects in the Athabasca Basin - the world’s premier uranium district. The projects include 75 granted mineral claims covering an impressive 55,000 hectares. Okapi will initially focus on the Cluff Lake and Newnham Lake projects where it will target high-grade unconformity-related uranium deposits.

The Athabasca Basin is home to the largest and highest-grade uranium mines on the planet, including Cameco’s McArthur River and Cigar Lake mines. A number of other world-class discoveries have been made in the area in recent years, including the Triple R, Arrow and Hurricane discoveries. NexGen Energy’s Arrow Deposit boasts a mineral resource of circa 337.4 million pounds of U3O8 at 1.9 per cent U3O8. Fission Uranium Corp’s Triple R Deposit has a current mineral resource of 135.1mlb U3O8 at 1.8 per cent U3O8. IsoEnergy’s Hurricane deposit was discovered in July 2018 with the best intersection to date being 7.5 metres averaging 38.8 per cent U3O8, including 3.5 metres averaging 74.0 U3O8.

Interestingly, all of Okapi’s projects are located along the margin of the Athabasca Basin where depth to the unconformity is relatively shallow - typically close to 100 metres. This makes them ideal for targeting high-grade unconformity-related uranium deposits according to the company.

Okapi’s Cluff Lake project lies at the site of a meteor impact. The force from the impact has altered the stratigraphy of the area and has brought any potential mineralisation closer to the surface. In 6 sandstone boulders, Okapi has unearthed grades of up to 16.9 per cent U3O8.

A number of walk-up drill targets have been identified at the Cluff Lake Exploration Project. The Donna zone which has only seen 12 holes drilled, and all between 2014-15, requires further work due to zones of anomalous radioactivity the company says.

Okapi’s Newnham Lake Project consists of 14 claims totalling 16,940 hectares. It is underlain by a series of graphitic metapelites where several fault zones have been identified. Multiple intercepts with grades between 1,000 parts per million U3O8 and 2,000ppm U3O8 have been intersected in relatively shallow historical drilling within a 25 kilometre folded and faulted conductive trend. Details of the historical drilling are currently being compiled by Okapi.

Approximately 50 per cent of the property at Newnham Lake has not been tested yet and there is potential for basement-hosted deposits akin to Triple R and Arrow according to the company.  

Okapi’s Lazy Edward Bay Project boasts 42 mining claims, spanning an impressive 11,263 hectares. Lazy Edward is approximately 55km west of the Cameco’s Key Lake Mill and 55km east of Orano-Cameco’s Centennial Uranium Deposit. Historical drilling has returned grades of up to 908ppm U3O8. Lazy Edward is a highly-prospective package containing multiple conductive trends that until now have only been poorly tested. Many of them have not been tested at all.

The Kelic Lake Project contains 12 mining claims covering a whopping 13,620 hectares. The project is located approximately 65km east of NextGen’s Arrow Deposit and Fission Uranium Corp’s Triple R Deposit. Kelic Lake has strong structural zones with known uranium enrichment and clay alteration within drill holes and represents an exciting exploration target.

Okapi’s Argo Project consists of three contiguous mining claims totalling 6,975 hectares, which sit close to Cameco’s Centennial Uranium Deposit and the Dufferin Uranium Zone. Argo straddles the southern uranium margin where the sandstone thickness is less than 250 metres. A high-sensitivity airborne radiometric survey was flown in 2018 and identified several areas of anomalous radioactivity, including certain spot anomalies that could represent the presence of radioactive boulders according to the company.

Okapi’s Perch Project consists of one mining claim, totalling 1,682 hectares where the depth to the basement contact is less than 100m. Historical exploration has highlighted a prospective 4km long conductive trend and two holes have been drilled into the trend. One of those holes returned 498ppm U3O8 and anomalous copper-nickel-zinc and the other returned grades of up to 504ppm U3O8.

Okapi Resources Executive Director David Nour, commented: "A number of world-class uranium discoveries have been made in the Athabasca Basin in recent years following new advancements in the understanding and exploration of high-grade unconformity style uranium deposits. The Cluff Lake Exploration Project and the Newnham Lake Project have the hallmarks for potential tier-1 uranium discoveries."

Okapi’s acquisition is fully funded from the company’s existing cash reserves. At last report Okapi had A$5.76 million in cash and cash equivalents in addition to 17.9 million listed options on issue, set to expire on 31 March 2023. If all options are exercised, Okapi’s cash balance will be supplemented by a further A$5.37 million.

Okapi’s acquisition comes as the Biden administration continues to drive down carbon emissions and drive up uranium demand. Biden is betting on uranium to power a nuclear future in North America and he intends to purchase US$150 million worth of uranium oxide every year for a decade to establish this critical clean resource.

Morgan Stanley recently ranked uranium as its most attractive asset class.

Investors have also begun to flock to the Sprott Physical Uranium Trust - a new fund that has just amassed an enormous stockpile of uranium - equal to about 16% of annual global demand. It was a game-changing bet by the billion-dollar hedge fund on nuclear energy’s prominence in a carbon-free future. 

Sprott has kicked off the next major bull market in uranium.

Athabasca is poised to become the heart of North America’s next great nuclear energy renaissance and Okapi’s ground lies at the centre of that renaissance. 

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au