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FOR IMMEDIATE RELEASE Purepoint
Uranium Group Inc: Provides 2008 Update
Toronto, December 3, 2008 - Purepoint
Uranium Group Inc. (TSX:PTU.V) is pleased to provide the following overview
of its current financial position, its exploration progress, and its focused
exploration plans for the coming year.
"Continuing market turmoil has forced all investors to examine
their individual portfolios" said Chris Frostad, Purepoint's President
and Chief Executive Officer. "Now, more than ever, companies such as
Purepoint must work harder to report regularly to shareholders and provide
increasing transparency into their finances, their properties and their
prospects. Prudent exploration juniors must make every possible effort to
carefully protect and budget their capital resources in a market where the
ability to raise additional financing may be limited for an indefinite
period".
Financial Position
Purepoint was fortunate to raise more than $20,000,000 of equity in the more
liquid markets of 2006 and 2007. As at September 30, 2008 Purepoint had
working capital of more than $4,600,000. In anticipation of the continued
declining markets, Purepoint actively took steps through much of 2008 to
conserve its treasury and reduce overheads and operating costs. Purepoint management
is confident that the company has the financial resources, without additional
equity, to continue to explore on a more focused basis at least three of its
highest priority targets through 2009 and beyond.
In recognition of these unprecedented market conditions, Purepoint's
board of directors recently resolved to defer Purepoint's budgeted 2009
winter drilling program. Given the extensive amount of geophysics and drilling undertaken by
Purepoint over the past 18 months, Purepoint management believes that the
coming winter months would be most profitably spent analyzing and
interpreting the massive amounts of data generated by its earlier programs,
and supplementing that data with additional geophysics if warranted, in order
to further advance its geological theories and design even more precise
drilling programs.
The material savings in
anticipated field operation costs, together with management's agreement to
salary reductions, leave Purepoint in a much stronger position to weather the
present market storm and eventually resume drilling activities.
Exploration
Progress
Purepoint completed the last of its planned 2008 exploration programs with
the announcement of encouraging results from its Smart Lake property. In the
last five years, Purepoint has incurred more than $20,000,000 of exploration
in the identification of more than 50 defined target areas on its eight 100%
owned projects in the Athabasca Basin, and has undertaken more than 23,000
metres of first pass drilling on the first few of those prospects.
Purepoint also completed
in 2008 the program expenditures necessary to earn its initial 20% joint
venture interests in the two additional Basin projects Purepoint operates in
joint venture with Cameco Corporation and UEM Inc. Purepoint may eventually
earn up to 50% in these projects, however it has no further funding
commitments in 2009 or 2010.
Focused
Exploration
Until the return of more reasonable market conditions, Purepoint has
determined that it would be in the best interest of its shareholders to defer
certain budgeted drilling and other programs in 2009 across its diverse
project portfolio and limit ongoing exploration expenses to focused infill
geophysics programs on its top three priority targets:
- Red Willow's Osprey Zone,
where diamond drilling returned assay grades as high as 3.03% U3O8 at
shallow depths of less than 100 metres;
- Turnor Lake, where most of
the diamond drill holes completed to date have returned significantly
elevated radioactivity and favourable alteration; and
- Smart Lake, where Purepoint
intersected a radioactive structure over 54 meters reflecting intense
clay alteration, silicification and hematization.
Exploration
Efficiencies
Since inception Purepoint has worked hard to deliver "precision
exploration" by ensuring that every exploration dollar is spent as
cost-efficiently as possible. To deliver efficiency Purepoint, unlike most of
its peers, established an internal operational infrastructure designed to
deliver exploration services at a cost significantly less than those
available from third party suppliers. In 2008 Purepoint achieved a per unit
reduction of 30% for its camp and field support costs and as much as 50%
reduction in its drilling costs per metre. Management expects this savings to
be maintained and improved upon in coming years. By way of example,
Purepoint:
- owns, rather than rents, its
exploration camps;
- owns or finances, rather than
contracts, its drilling equipment;
- utilizes, where possible,
permanent year round exploration camps; and
- establishes temporary or
year-round ground access to its camps, rather than relying on expensive
air freight and helicopter transport.
Where possible Purepoint
takes the longer term view and incurs upfront expenditures where significant
longer term efficiencies can be realized.
Purepoint's commitment to
cost efficiency is reflected in the nature and results of its exploration
programs. The company invests heavily in the upfront geophysical work
necessary to pinpoint existing conductors, structural faults and other
geologic anomalies, prior to the more expensive first pass or follow-up
drilling.
Although there are no
industry specific statistics readily available, Purepoint has compiled and
maintains its own database of the exploration and drill programs publicly
released by more than 25 of the grassroots junior exploration companies
operating predominantly in the Basin. Based on that database, Purepoint
management believes that over the current exploration cycle (2005 through
2008) Purepoint can quantifiably demonstrate that:
- Purepoint has drilled and
disclosed more diamond drill holes than any other peer in the Basin (96
of the 665 drill hole results disclosed)
- Of the peer drill results
published, less than 10% reported 0.005% or more U3O8 (generally the
threshold level Purepoint believes to be worthy of follow-up)
- In contrast, more than 50% of
Purepoint's drill results reflected 0.005% or more U3O8, with nearly 10%
producing results greater than ten times that threshold over at least
one meter
Purepoint
has made available on its web site a summary chart for each of its properties
detailing, on a target by target basis, the results of all of its drilling to
date. The company intends to maintain and update these charts as results
become available in order to provide investors with a clear and complete
picture of Purepoint's exploration progress.
About Purepoint
Purepoint Uranium Group Inc. is focused on the precision exploration of more
than 55 defined target areas on its eight 100% owned projects in the Canadian
Athabasca Basin,and its two Basin projects joint ventured with Cameco
Corporation and UEM Inc. a company owned equally by Cameco Corporation and
AREVA Resources Canada Inc. Established in the Basin well before the
resurgence in uranium, Purepoint is actively advancing this large portfolio
of multiple drill targets in the world's richest uranium region.
Scott Frostad BSc, MASc,
PGeo, Purepoint's Vice President, Exploration, is the Qualified Person responsible for
technical content of this release.
Ends
THE TSX VENTURE EXCHANGE
HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR
ACCURACY OF THIS RELEASE.
For further
information please contact:
Purepoint Uranium
Group Inc.
Chris Frostad, President and CEO
(416) 603-8368
www.purepoint.ca
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