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Just ahead of the Christmas holiday, Terra Clean Energy (TCEC) announced on December 23rd that it had received the needed permits from the Saskatchewan Ministry of the Environment to conduct the planned winter exploration program on its South Falcon East property, situated at the periphery of the Athabasca Basin. The winter 2025 drill program is in the final stages for planning and scheduling. We previously retracted our valuation and corresponding price objective given a still currently live financing (for gross proceeds of C$3.0M) coupled with personnel changes (as announced in late November). Until those events are finalized and the details of the winter drilling program are announced, our valuation methodology and price objective will remain retracted.
The permits received from the Saskatchewan Ministry of the Environment allow for access to the project lands for a period of three years. The permits allow for exploration activities including geophysical surveys and diamond drilling. Terra previously announced in October that its upcoming winter program would encompass approximately 2,000m.
Strategically situated at the periphery of the Athabasca Basin, the South Falcon East Project is located 50km east of Cameco's (CCJ, CCO) Key Lake uranium mill and just 7km north of the powerline servicing the Key Lake operations.
RECAPPING THE SOUTH FALCON EAST PROJECT
The majority of the upcoming drill program will be concentrated around the Fraser Lakes B uranium deposit which currently hosts a NI43-101 compliant uranium resource (Inferred) estimated to be 10.35Mt grading 0.03% U3O8 for 6.96M lbs, along with thorium (ThO2) mineralization. The deposit remains open in almost all directions.
The results from the upcoming campaign will be used to prepare an updated NI43-101 compliant resource estimate. The updated resource will also integrate other results not included in the historical resource estimate, including higher-grade mineralization encountered to date at Fraser Lakes B, intersected in drillhole FP-15-05. This particular drill hole returned 0.165% U3O8 and 0.112% ThO2 over 2.0m at 135.0m depth within a broader interval containing 0.103% U308 and 0.062% ThO2 over 6.0m at a depth of 134.5m, and a second high grade intercept of 0.172% U3O8 and 0.113% ThO2 over 2.5m at 146.0m depth. Recall that mineralization at Fraser Lakes B is accompanied by anomalous pathfinder elements, including Bi, Mo, Pb, and Zn, that are also associated with ultra high-grade basement-hosted unconformity uranium deposits in the Athabasca Basin.
While the Fraser Lakes B uranium deposit will likely remain the primary focus of the company with the proposed infill and step-out targets, additional drill-ready targets along the Way Lake conductor at South Falcon East are also in the longer term pipeline. These additional targets include the T-Bone Lake area, just north of Fraser Lakes B, where limited drilling encountered highly prospective clay alteration, anomalous radioactivity, and uranium mineralization (including up to 0.055% U3O8 over 0.9m at 39.5m depth in drillhole WYL-10-53) associated with a north-northwest trending fault cross-cutting the northeast-trending Way Lake conductor.
Recall that Skyharbour Resources (SYH) optioned the project to Terra in October 2022. In exchange for a 75% ownership interest in the project, over the five-year earn-in period, Terra is to fund exploration expenditures totaling C$10.5M while also paying Skyharbour C$11.1M in cash (of which C$6.5M can be settled in shares of Terra).
EXPLORATION AGREEMENT WITH THE ENGLISH RIVER FIRST NATION
In addition to the permits received from the Saskatchewan Ministry of the Environment, Terra also announced the execution of an Exploration Agreement with the English River First Nation. This agreement will strengthen the relationship between both parties while also allowing Terra access to the English River First Nation ancestral lands.
CONCLUSION
Now post-4:1 share consolidation, only post-financing will the details of the upcoming drill program be announced. The financing close is expected in the days ahead. The drill program as announced in October may be expanded or modified as deemed fit. We continue to believe that at the current microcap valuation, the risk remains on the upside provided future drilling success. Seeing that the deposit remains open in most directions, additional work spend may lead to an increase in both grade and resource size. That said, only after we have concluded the corporate restructuring/re-capitalization and have been presented with the definite winter drilling plans will we re-establish a 12-month price objective.