Author: Marc Davis, Capital Markets Media
Matt Schwab is a proven mine-finder who now believes that he has another major discovery in his sights.
This accomplished geologist has considerable credibility to back up his confidence: he led the exploration team that made the multi-billion-dollar Arrow uranium deposit in 2014 in the remote southwestern portion of Saskatchewan’s famed Athabasca Basin. This allowed a low-capitalized penny-stock uranium explorer – NexGen Energy – to become a multi-billion-dollar company with a share price that has since traded nearly as high as C$20.
Why investors are betting on a proven winner
Fast forward a dozen years and Schwab believes he is about to do it all over again with another junior exploration company – once again in the remote western Athabasca Basin. He is excited about what is proving to be a technically successful inaugural drill program (which is still ongoing) – one that his Vancouver-based company began a few weeks ago in virgin territory that has never seen drilling before.
This article is disseminated in partnership with Stallion Uranium’s media advisor, Capital Markets Media Inc. It is intended to inform investors and should not be taken as a recommendation or financial advice.
He is especially equally excited about the Big Picture potential of the Coyote target within the Moonlite project area – now that drill results are starting to validate his exploration team’s extensive, multi-faceted geological detective work It is worth noting here that his team has impressive collective experience with drilling uranium discovery holes
Coyote is one of his company’s main prospects among an expansive land package that covers 1,700 square kilometres, covering much of the most under-explored areas in the Western frontier of the Athabasca Basin (see image).
“Frankly, it’s shaping up to be what is undeniably one of the best greenfields uranium projects on the planet,” Schwab says.
This is a bold statement. But Schwab has amassed plenty of experience over the years while being involved in several major discoveries – not just Arrow. So, he knows a really good thing when he sees it thanks to his finely-honed geological instincts and his talent for picking drill targets that get the desired results.
In fact, his past Arrow deposit discovery made him realize that he had the necessary skill set and technological knowhow to do it all over again one day if he got his hands on the right properties – which is now the case.
How drilling is “delivering the goods”
Now Schwab feels he is on the brink of a new career high as his small publicly-traded exploration company zeroes-in on a new discovery – one that he feels is well within his reach.
The CEO of Stallion Uranium (TSXV:STUD) (US OTCQB: STLNF) (FSE: B76) says his company’s inaugural drill program shows that his proven geological team is fast zeroing-in on a “company-maker” discovery. It is worth repeating that his team includes fellow geologists who have a comparable track record for being involved in making world-class uranium discoveries among the world’s richest uranium fields – where grades run as high as 20 per cent U₃O₈.
Historically, it has typically taken successful companies at least a couple of dozen drill holes to find anomalously elevated amounts of radioactivity – the key to zeroing-in on high-grade deposits in Saskatchewan’s Athabasca Basin.
Schwab says it took NexGen Energy 14 drill holes before finding elevated radioactivity in the ideal type of rock formation. And then the main discovery hole did not come until the 30th attempt, where the most elevated radioactivity was encountered. This all took place over the span of several sequential drill programs spread over nearly two years.
This time around, Schwab is even more excited than he was with the Arrow discovery. This is because his company’s inaugural drill program is achieving comparable drill results at its Coyota prospect – but at a much faster pace and over a much larger target area.
“In terms of drilling success to date, we’re also well ahead of the game. We’ve found definable mineralization in five out of our six drill holes. To make this happen, we have hit all four of the criteria that we looked for at the Coyote target area,” he says.
“We looked for the right lithography. We looked for conductors with a break. We looked for fault zones, and we looked for alteration. We hit all four of those in all six drill holes. And in five holes, we actually hit elevated radioactivity. In particular, drill hole ML26-005 intersected the highest anomalous radioactivity reading, registering above 1,400 cps.
I think all of these findings are significant. And it shows that we are in the right spot… We even have the same kind of gravity geophysical signature outlining the alteration as we did with Arrow. Only with Coyote, it’s five times bigger.
All told, we’ve delivered on every promise we’ve made so far. Our drilling as so far is delivering the goods. I call this a success.”
Schwab emphasises how the exploration methods that Stallion is using are the same ones that proved successful in revealing the Arrow deposit. They involve using a variety of different techniques to produce anomalous targets. When these targets “stack” on top of one another, they are shown to corroborative one another. In other words, this is where all the geological clues point to the same spot. This is how the top-priority drill targets are selected.
“We even have similar lithology, similarly strong conductors with large breaks, and the same kind of rock structure, and the same kind of alteration… Remember that Arrow is the second highest grade uranium deposit in the world,” Schwab says.
The next value drivers
With 4,626 metres completed of the planned 5,500-metre Phase 1 drill program, Stallion intends to drill 2-3 more holes into the Coyote prospect, as well as a single reconnaissance drill hole to also test a high-priority target at the nearby, shallow Fish Hook project area.
Investors should be encouraged by the fact that this involves an expansion fo the current fully-funded drill program to approximately 6,750 metres in total. All of this is expected to get underway in September after a short summer break for the drill crew.
The prospect of outlining more elevated radiation counts at Coyote, as well as a shot at finding a separate deposit at Fish Hook, offer Stallion a couple of powerful drivers for the share price this autumn.
Additionally, a Phase 2 drill program is expected to get underway as early as January, which may yet prove to be a significant discovery-driven catalyst to the upside.
The big picture for investors
Arrow includes 497,000 tonnes of ore at an exceptional 15.90 per cent U₃O₈. This compares to a global average of 0.10 per cent for most uranium deposits. A discovery in Saskatchewan can therefore be analogous to finding a 10-million-ounce, high-grade gold deposit – or even bigger. Remember that we are talking about uranium grades that are more than 100 greater than the global average.
This explains why the stakes are so high in Saskatchewan. And it helps explain why Stallion’s initial drill results suggest it may soon have a tiger by the tail. Continued drilling is sure to add to the excitement.
On a technical note, Stallion has 146 million shares outstanding (235 million fully diluted), which makes for robust daily trading volumes. That said, the stock is more tightly held that it seems because management and insiders own nearly 45 per cent of all the shares outstanding.
Going forward, the prospect of continued success among the remaining several holes of the inaugural drill program should help considerably in the quest to zero-in on a major discovery.
Plus, a Phase 2 drill program in January is expected to capitalize on the technical success of the first round of drilling. This should add further upside impetus to Stallion’s currently undervalued share price. However, if the company’s exploratory drilling continues to encounter success, Stallion’s share price will not stay cheap for much longer. If drilling continues to go well, this could be the next NexGen Energy.
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Capital Markets Media Inc. has received C$50,000 in connection with investor awareness and promotional services, including this article.
Capital Markets Media Inc. does not provide investment advice or recommendations. All investment decisions should be made based on your own research and consultation with a registered investment professional. The issuer is solely responsible for the accuracy of the information contained herein.
