ANALYSIS�ProspectingJournal.com�Lately, we�ve had the pleasure of witnessing a slow but steady revival of the uranium scene in the renowned Athabasca Basin. This revival followed Rio Tinto�s takeover of Hathor Exploration [HAT � TSX] and its Roughrider uranium project for $654 million. Shortly after, Steven Harper reached a deal with China to significantly increase Canadian uranium exports.

Good timing. An estimated 96 reactors will come online across the world by 2021. The likely result will be a full-blown uranium shortage, which Drolet & Associates expects by 2016 (We touched on this supply dynamic in �The Uranium Supply Crunch.�). When this crunch occurs, majors will have to increase their reserves significantly through exploration and development. The chart below foreshadows the coming disconnect, where supply hits the wall and begs the question that Cameco�s Rim Gitzel has asked for some time��where is this production going to come from?�

Now back to the Athabasca Basin. The largest uranium-producing region in the world occupies an area of approximately 100,000 square kilometres in Saskatchewan and Alberta. The following image, provided by ESO Uranium Corp, sums it up:

Like any hot region, companies to look out for include well-known majors, mid-tiers, and active juniors. Of the companies on the ground, our research has touched on a mix of juniors and majors: Cameco [CCO � TSX], Rio Tinto, Fission Energy [FIS � TSX.V], Unity Energy Corp. [UTY � TSX.V] and Hathor.

The newest addition to our uranium lineup goes to ESO Uranium [ESO � TSX.V]. A junior mineral exploration company with precious metals, lithium, borax and uranium properties, ESO brings acres of diverse North American opportunity to the table. From the Mikwam gold property in Ontario to the Teels Marsh properties in Nevada and a spread of uranium properties in the Athabasca, the Company covers an extensive range of exploration.

In terms of uranium, ESO now finds itself in the middle of the Athabasca story, with four active properties and guidance from a V.P. Exploration who was part of the Hathor Exploration team�the same team that brought its Roughrider discovery forward to be the largest all-cash transaction for uranium assets in Canada to date . The ESO properties include Cluff Lake, Patterson, Hook and Cree. Totaling 225,000 acres, these properties present growing opportunity with drilling activity on Patterson and Cree and further work planned on Cluff Lake and a review of the Hook claims.

For those new to the ESO story, the property to look out for lately is Patterson Lake South (PLS). The PLS is a 50/50 joint venture with the Fission Energy team. The PLS JV covers over 31,000 hectares (76,000 acres), located in a contiguous block of claims on the southwestern margin of the Athabasca Basin.

Accessible year-round by Highway 955, which runs north to the former Cluff Lake mine (>60M lbs of U3O8 produced), the property contains strong potential. 2011 saw the discovery of a 5 km long, high-grade uranium boulder train. ESO and Fission reported boulders of up to 39.6% U308. A total of 74 boulders and soil samples were submitted in the 2011 exploration program, with highlights as follows:

• �         25 high-grade boulders with grades over 10% U₃O_{8 ,}  with the highest grade assaying 39.6% U₃O₈
  
  
• 23 boulders assayed between 1.0% U₃0₈ to 10% U₃O_8.

Trenching in October November 2011 confirmed a further 49 radioactive boulders    with 25 boulders over 10% U₃O₈ and 15 boulders over 1% U₃O₈

Fast forward to today and the buzz continues where 2011 left off, with an April 18 press release summing it up in the title: �Drilling Returns 19.5 Meters of Strong Radioactive Mineralization, at Patterson Lake, Saskatchewan.� This news refers to ESO�s $2.76 million winter program at PLS, which includes 23 holes as a follow up to the November 2011 (PLS) trenching program. Hole PLS12-013 has intersected the 19.5 metres, uncovering what ESO refers to as �strongly anomalous gamma radiation values based on a down hole gamma probe log.�  

This very positive feedback is hopefully the start of a long list of good news as the Company continues its 2012 drill program on Patterson Lake. The program has now been extended from 14 holes to 16 holes for this initial phase. Highlights from the exploration program thus far include:

• Located up-ice from the 2011discovery of a large, high-grade boulder field (with grades up to 39.6% U3O8)
• The down hole gamma log shows a 19 m (63 feet) basement interval averaging 935 cps* starting at shallow depth (98.17 m.) from surface
• Includes a 7.7 meter of interval that averages over 1000 cps including a1982 cps value
• Located up ice from PDD11-06 which had 400 cps section in glacial till
• Strong alteration signature of rocks in core from radioactive intersection
• �Skip Distance� from boulder field to PLS12-013 vicinity approximately 3 kms

*�cps� stands for counts per second due to gamma radiation measured by a borehole probe. All intersections are drill intersections and not necessarily true widths.

While ESO is optimistic of the results it has achieved from drilling both from the ice on Patterson Lake and through glacial till to the west, the Company has sent core samples to assay the radioactive zones. The Company states, �a total count scintillometer reading is the result of natural gamma radiation that may come from various sources including cosmic radiation, thorium, potassium and uranium and its radioactive decay products.� The rock  alteration seen in core samples from these radioactive zones indicates a passage of a strong hydrothermal system and suggests that the drilling is closing in on the target of a shallow, high grade uranium source in the area. 

What this means is simple: more exploration is on the way, so expect more results.

Still, as initial results show, ESO has a good deal to be excited about�In fact, the whole Athabasca Basin does. If further exploration on the Patterson Lake property continues to pull up great results, then ESO can expect to add itself to the list of successful uranium explorers in a region that is attracting many eyes. And if the demand for uranium continues to grow, which all signs point to, Athabasca miners may find themselves at the helm of an intensifying energy race.

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Chris Devauld
ProspectingJournal

Disclaimer: The author does not currently hold any shares of any of the companies mentioned in the article. However, some members of Prospecting Journal may or may not have interests in one or more of the companies mentioned at the time of publication. Staff members from the Prospecting Journal reserve the right to acquire interests in any of the companies mentioned after 36 hours have elapsed upon initial publication of this article. Eso Uranium Corp. is a sponsor of ProspectingJournal.com.