Canalaska Uranium Ltd (CVE:CVV) shares nudged higher as it posted final results from two holes on the West McArthur uranium project, where drilling is being carried out by partner and uranium giant Cameco Corporation (TSX: CCO, NYSE: CCJ)
Cameco has a $12.5mln option to earn a 60% interest in the project in Canada..
The two holes were sunk at the northern end of a strong anomaly which represents the continuation of the C10 conductor which hosts a new high-grade uranium deposit at nearby Fox Lake, and both (holes) hit high-grade uranium.
The geochemical uranium halo above the mineralization hit in the holes is extensive, added Canalaska.
"Canalaska management is very impressed with the size of the target and the high-grade uranium intercepted at the C10 conductor," said Canalaska president Peter Dasler on Wednesday.
"The strong alteration halos, which reach 400 to 700 metres above the unconformity, show that there has been extensive fluid flow in the system.
"We also now know that there is a significant fault located in the region between the C10 and C10 south conductor targets, and believe more mineralization will be found in this structure.
"We look forward to Cameco's next drill program for this target."
The West McArthur project covers 35,830 hectares and lies 15km west of Cameco's majority-owned McArthur River uranium mine.
More importantly, it is next to Cameco's Fox Lake uranium discovery with reported inferred resources of approximately 68.1 million pounds based on 387,000 tonnes at 7.99% uranium concentrate.
Cameco has paid CanAlaska an initial $725,000 and has the right to earn a first stage 30% interest for a $5mln exploration program within three years (it has spent $1.1 million to date) on two separate target areas - Grid 1 and Grid 5.
Cameco will then have the right, after a $500,000 payment, to carry out a further $6.275mln on the project over the following three years to earn a further 30% interest and form a joint venture (jv) with CanAlaska.
Canalaska shares gained 2.99% in Toronto to C$0.345 each.