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Aurora Energy Resources Inc. ("the Company" or "Aurora") (AXU:TSX) is pleased to announce that it has secured a strategic addition to its assets through a deal with Pacific Ridge Exploration Ltd. ("Pacific Ridge") (TSX-V:PEX) on a uranium exploration and development opportunity in the Baker Basin of Nunavut, Canada.
"Since 2006, we have been looking globally for opportunities to continue building our pipeline of uranium projects. The Baker Basin property is a perfect addition to our evolving portfolio, as it accelerates our corporate strategy to discover and develop great assets in the best locations to be ready for the world's ever-increasing need for uranium," said Dr. Mark O'Dea, Aurora's Deputy Chairman.
The property provides the potential to build significant value not only in a short timeframe, but at an excellent entry cost and in a jurisdiction with clearly defined policies on exploration and mining. It will complement Aurora's ongoing work and investment in Labrador, where the Company remains committed to advancing its world-class Michelin Project.
The Baker Basin property is located 65 kilometres south of the town of Baker Lake, Nunavut, near Areva's Kiggavik-Sissons Project, which has a resource estimate of 148 million pounds of U3O8 (based on Areva's December 3, 2007 news release, "Kiggavik Uranium Feasibility Study in Nunavut to Proceed"*). A map of the area can be viewed at: http://www.aurora-energy.ca/files/BakerBasinAreaMap.jpg
Key attributes of this new property are as follows:
- The property covers 96,000 hectares (370 sq. miles) and boasts attractive near-surface significant uranium mineralization.
- The property includes 5 targets with drill-indicated mineralization, with at least 15 target areas yet to be drill-tested.
- Drilling highlights from the Lucky-7 Zone and K7 Zone returned 17.3 metres of 0.30% U3O8 and 11.5 metres of 0.31% U3O8, respectively. A complete listing of Pacific Ridge's drill results for 2006 and 2007 can be viewed at: http://www.aurora-energy.ca/files/PR_06-07_DrillResults.JPG.
- The prospects occur along a 60-kilometre length of the southern boundary of the Baker Lake sedimentary basin, a favorable setting for high-grade uranium occurrences.
- It is located 65 kilometres from the deep sea port of Baker Lake, with ocean access to Hudson Bay and the railhead at Churchill, Manitoba via ship.
Aurora's management team believes Baker Basin holds opportunities for rapid growth and resource definition, and the Company is currently developing plans for an extensive airborne geophysical survey.
TERMS OF THE AGREEMENT
Under the terms of the agreement, Aurora, as operator, can earn an initial 51% interest by spending C$15 million on exploration over three years and by immediately subscribing to a private placement for two million shares of Pacific Ridge priced at $0.17 per share.
Upon earning its initial 51% interest, Aurora has the option to either earn an additional 14% by completing a pre-feasibility study by the end of 2013, or Aurora may continue as operator through a joint venture with Pacific Ridge (Aurora with a 51% interest and Pacific Ridge with a 49% interest). Upon Aurora completing a pre-feasibility study, Kivalliq Energy Corp ("Kivalliq"), a recent spin-out company from Kaminak, shall be entitled to exercise a back-in right to acquire a 20% interest in the project from Pacific Ridge.
Thereafter, Aurora with a 65% interest, shall continue as operator in a joint venture with Kivalliq at a 20% interest and Pacific Ridge at a 15% interest, each interest subject to straight line dilution. Under the back-in terms, Kivalliq will be obligated to pay 40% of the total costs of the project incurred to that date, with the reimbursement distributed to Aurora and Pacific Ridge.
"We are pleased to be working with Pacific Ridge and Kivalliq," said Dr. O'Dea. "Pacific Ridge's technical strengths have seen them significantly expand the resource potential of the property over the past two years, while Kivalliq's success in assembling the land package speaks to its local experience and solid reputation in the region."
EXPLORATION HISTORY
The Baker Basin property's uranium potential was first recognized in the late 1960s by Pan Ocean Oil Ltd, and was later explored by New Continental, Cominco and Noranda in the 1970s and early 1980s. These companies conducted prospecting, mapping, geophysics and limited Diamond drilling, resulting in the discovery of 20 individual uranium prospects. Kaminak Gold Corporation ("Kaminak") later assembled a land package to further investigate these prospects, the same land package now at the centre of Aurora's deal with Pacific Ridge. In 2006, Pacific Ridge entered into an option agreement with Kaminak on the Baker Basin property and began exploring, quickly making several new discoveries.
2008 LABRADOR WORK PROGRAM
Aurora's 2008 work program in Labrador includes 11,250 metre infill drill program and 3,750 metre geotechnical, environmental and metallurgical drill program, development of a tailings management plan, pre-engineering work, and a training program designed to enhance employment opportunities for North Coast Labrador residents during the exploration, development and operations phases of the Michelin Project.
Recently, Aurora has also announced several key events in the development of the Company. These announcements include:
- Bruce Dumville, formerly General Manager at Xstrata and Falconbridge, joining Aurora as President and CEO;
- Chesley Andersen, formerly senior negotiator and secretary to the executive council of the Nunatsiavut government in Labrador, joining the Company as VP-Labrador Affairs; and
- The establishment of the Michelin Project Community Panel, which will be a vehicle for the exchange of information on Michelin Project matters between North Coast community representatives and the Company.
LIQUIDITY
Aurora has no debt and approximately $107 million in cash that is fully liquid and held with a large commercial Canadian bank.
ABOUT AURORA
Aurora is a uranium exploration and development company and is committed to responsible development, which includes community consultation, lasting local benefits and the highest standards of safety, health, and environmental protection.
For further information, please contact:
Andrea Marshall
Media and Government Relations
709-726-2223
Don Falconer
VP, Corporate Development
416-362-5556
www.aurora-energy.ca
*Areva's Kiggavik resource estimate has not been independently verified by Aurora.
Aurora's strategy, plans or future financial or operating performance and other statements that express management's expectations or estimates of future performance are "forward-looking" statements. The words "believe", "expect"', "will", "anticipate", "contemplate", "budget", "target', "continue", "may", "intend" and similar expressions identify forward looking-statements. All statements contained herein, other than statements of historical fact contained herein, constitute "forward-looking statements". Such forward-looking statements, including but not limited to, those with respect to the timing and amount of estimated future resources and resource conversion rates, future operations, project costs and production, potential for expansion of resources and potential size of future exploration programs, grades and widths and potential timing of receipt of permits and classification of future mineral resources, and potential for future benefits, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievement of Aurora to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, risks related to the actual results of current exploration activities, conclusions of economic evaluations, uncertainty in the estimation of mineralization and mineral resources, changes in project parameters as plans continue to be refined, future prices of uranium, environmental risks and hazards, increased infrastructure and/or operating costs, labor and employment matters, and government regulation as well as those factors discussed in the section entitled "Risk Factors" in Aurora's most recent Annual Information Form available on SEDAR at www.sedar.com. Although Aurora has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Aurora disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Accordingly, readers should not place undue reliance on forward-looking statements. |