Mitsubishi takes stake in Canadian uranium project

16 February 2010

Japan's Mitsubishi Corp, through its MC Resources Canada Ltd subsidiary, has completed its acquisition of a 50% stake in CanAlaska Uranium's West McArthur uranium project in Saskatchewan, Canada.


CanAlaska and Mitsubishi entered an option agreement in April 2007, under which the Japanese company would earn a 50% ownership interest in the West McArthur project by spending a minimum C$11.0 million ($10.5 million) in cash and exploration payments to CanAlaska over a three-and-a-half year period. This amount included C$2.6 million ($2.5 million) for exploration that CanAlaska had already conducted on the project since 1 June 2006.


The companies have announced that, as of 12 February, Mitsubishi had completed its investment obligations under the project’s option agreement and had formally earned a 50% stake in the project. A 50-50 joint venture has already been established, which CanAlaska will operate.


CanAlaska and Mitsubishi said that, "to facilitate the long-term planning of the project," they have outlined a C$20.0 million ($19.1 million) five-year program of exploration that will "progressively test the current target areas and reach across the remainder of the property to evaluate other target areas."


"We are very pleased to have been able to work with Mitsubishi for the past four years in expanding the knowledge of this very strategic project," said Peter Dasler, president and CEO of CanAlaska. He added, "We are located in a very mineral-rich area, adjoining one of the largest uranium mines in the world. Our preliminary work and drilling has indicated the style of targets that hold promise for significant uranium discovery. The strength and continued support of Mitsubishi Corporation is allowing us to reach for our goals."


The West McArthur project is situated in the Athabasca Basin area in northern Saskatchewan, between six and 30 kilometres west of the world's largest uranium mine, McArthur River (70% owned by Cameco). The West McArthur project comprises 12 mineral claims covering 359 square kilometres.


At the time of signing the agreement with CanAlaska, Mitsubishi said that "while focussing on its core metallurgical coal and thermal coal businesses," it had decided "to expand into the uranium mining business by utilizing the knowledge and expertise accumulated over years from its coal mining business."


On earning its 50% stake in West McArthur, Mitsubishi noted that its "involvements in other uranium exploration projects in Canada, Australia and Mongolia, the West McArthur project is aimed to provide a stable supply of uranium for nuclear power generators thereby contributing to the prevention of further global warming."


CanAlaska is undertaking uranium exploration in 23 projects in Canada’s Athabasca Basin. The company reported that exploration of its Cree East project is also progressing under a C$19.0 million ($18.1 million) joint venture with a consortium of Korean companies led by Hanwha Corp, and comprising Korea Electric Power Corp (Kepco), Korea Resources Corp and SK Energy Co Ltd. The Korean consortium holds a 40.6% stake in Cree East.


Researched and written

by World Nuclear News


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