Silver Spruce Leads the Uranium Boom in Labrador

When it comes to uranium exploration in Labrador, few companies boast the scale and scope of Silver Spruce Resources’ (TSX.V: SSE) Central Mineral Belt project (CMB).

Covering a total of 13,100 claims or 3,275 square kilometers of prime ground, a portion of Silver Spruce’s claims (approx. 5,600) are the subject of a joint venture with Universal Uranium Ltd. (TSX.V:UUL). Universal is funding 60% of the exploration of the properties with Silver Spruce functioning as the operator. As such, this deal is a strong example of the OPM business model – Other People’s Money. Universal shoulders the majority of the exploration risk.

Labrador has been the subject of extensive exploration booms in the past – Voisey’s Bay is surely the foremost example – but the surge in uranium prices over the last five years has caused a veritable frenzy of acquisition. Besides the uranium price, the substantial deposits delineated by Aurora Energy Resources Inc. (TSX: AXU) have demonstrated the immense potential of the area to host ore grade mineralization.

Since 2005, Aurora’s drilling programs within the Michelin and Jacques Lake areas defined a combined measured resource of 5.34 million pounds U3O8 and an indicated resource of 52.54 million pounds U3O8. The total measured and indicated resource is 57.88 million pounds of U3O8, with an inferred resource of 38.03 million pounds U3O8. This 95+ million pound resource ranks as one of the largest primary uranium deposits in the world.

Investors in Silver Spruce are eagerly waiting to see if their company’s efforts bear similarly valuable fruit. Silver Spruce’s first-ever resource calculation is expected before the end of the first quarter 2008, and if drilling results mean anything, it will be a large resource in the millions of pounds.

To that end, on November 26 Silver Spruce announced results from its optioned Snegamook Lake property, which clearly demonstrated the untapped potential of the area. The drilling comprised six holes of a first-pass drill program totaling 1,375 meters. Results included 36 meters grading 149 ppm (0.3 lb/ton) and 24 m grading 186 ppm (0.38 lb/ton). Shorter intervals graded highs of 1.22 lb/t up to a high of 3.07 lb/t over 1 meter. The Snegamook property covers 21.5 square kilometers.

The company’s recently completed $6.3 million financing certainly gives it the financial firepower required to begin serious and systematic development similar to work at Aurora Energy’s deposits. The offering, led by Pacific International Securities as agent, saw 5.5 million “flow-through” units placed at $1.15 per unit. Each unit is comprised of a common share and a share purchase warrant priced at $1.75 that is good for 18 months.

Located in the Postville-Makkovik area of Labrador, approximately 150 kilometers northeast of Happy Valley-Goose Bay, a good portion of the company’s holdings are proximal to the Aurora deposits.

The properties cover uranium in lake sediment anomalies located by the Newfoundland and Labrador government. Anomalous values range from 8 to 98 ppm, with many in the 20 to 70 ppm range, against a background of <5 ppm hosted in felsic volcanic, sedimentary and plutonic rocks, with potential for unconformity similar to those in the Athabasca Basin, iron oxide copper gold such as the Olympic Dam or shear-hosted style uranium deposits such as the Michelin deposit.

Of particular promise is the “Two Time Zone”, a 475 by 50 meter area just south of the Kanairiktok River, discovered by a combination of helicopter-born and ground supported electronic measurement. Silver Spruce has now added a second drill to the exploration currently underway in support of a National Instrument 43-101 compliant resource calculation that is being compiled by Scott Wilson Roscoe Postle Associates.

"We continue to be impressed with the strength of the Two Time uranium zone," said Lloyd Hillier, president and CEO of Silver Spruce. "We look forward to the definition of a resource at the Two Time Zone that will establish Silver Spruce and Universal Uranium as companies with significant uranium resources. We intend to drill through the winter, taking advantage of skidoos for access, which should keep our drilling costs down".

The Two Time Zone remains open to the north and south along strike and to depth. The host for the mineralization is an altered, brecciated and fractured intrusive, monzodiorite to diorite, with extensive chlorite, carbonate, hematite and albite alteration. The orientation of the mineralization appears to be near vertical to steeply dipping.

Silver Spruce has an all-star leadership team that is led by Lloyd Hillier, president - Newfoundland and Labrador's Entrepreneur of the Year in 2001.

CFO Gordon Barnhill was a senior officer with Canada’s largest bank, and Peter Dimmell, VP of Exploration,has had an illustrious 38-year career as a geologist and prospector involved in mineral exploration in Canada, the United States and overseas. Senior geologist Guy MacGillivray brings world-class uranium exploration expertise from past stints with Eldorado Nuclear Ltd. and Shell Canada. (NYSE:RDS).

Other companies enjoying varying degrees of exploration success in the Central Mineral Belt include Bayswater Uranium (TSX.V:BAY), Crosshair Exploration and Mining (TSX.V:CXX), Longview Strategies (TSX:LV), Santoy Resources (TSX.V:SAN), Monster Uranium (TSX.H:MU) and privately held Tripple Uranium Resources.

Aurora Energy is investigating the potential to mine the Michelin and Jacques Lake deposits and construct a mill at the site to process the ore into uranium concentrate (known as yellowcake). This development is called the Michelin Project and is located 140 km north of Happy Valley-Goose Bay, 40 km southwest of Postville, and 80 km southwest of Makkovik, Labrador.

This article is intended for information purposes only, and is not a recommendation to buy or sell the equities of any company mentioned herein. It is based on sources believed to be reliable, but no warranty as to accuracy is expressed or implied. The opinions expressed in the article are those of the author except where statements are attributed to individuals other than the author, in which case the opinions are those of the individual to whom they are attributed.