Purepoint Uranium Group Inc. (TSX VENTURE: PTU) is pleased to
provide the following overview of its current financial position,
its exploration progress, and its focused exploration plans for the
coming year.
"Continuing market turmoil has forced all investors to examine
their individual portfolios" said Chris Frostad, Purepoint's
President and Chief Executive Officer. "Now, more than ever,
companies such as Purepoint must work harder to report regularly to
shareholders and provide increasing transparency into their
finances, their properties and their prospects. Prudent exploration
juniors must make every possible effort to carefully protect and
budget their capital resources in a market where the ability to
raise additional financing may be limited for an indefinite
period".
Financial Position
Purepoint was fortunate to raise more than $20,000,000 of equity
in the more liquid markets of 2006 and 2007. As at September 30,
2008 Purepoint had working capital of more than $4,600,000. In
anticipation of the continued declining markets, Purepoint actively
took steps through much of 2008 to conserve its treasury and reduce
overheads and operating costs. Purepoint management is confident
that the company has the financial resources, without additional
equity, to continue to explore on a more focused basis at least
three of its highest priority targets through 2009 and beyond.
In recognition of these unprecedented market conditions,
Purepoint's board of directors recently resolved to defer
Purepoint's budgeted 2009 winter drilling program. Given the
extensive amount of geophysics and drilling undertaken by Purepoint
over the past 18 months, Purepoint management believes that the
coming winter months would be most profitably spent analyzing and
interpreting the massive amounts of data generated by its earlier
programs, and supplementing that data with additional geophysics if
warranted, in order to further advance its geological theories and
design even more precise drilling programs.
The material savings in anticipated field operation costs,
together with management's agreement to salary reductions, leave
Purepoint in a much stronger position to weather the present market
storm and eventually resume drilling activities.
Exploration Progress
Purepoint completed the last of its planned 2008 exploration
programs with the announcement of encouraging results from its
Smart Lake property. In the last five years, Purepoint has incurred
more than $20,000,000 of exploration in the identification of more
than 50 defined target areas on its eight 100% owned projects in
the Athabasca Basin, and has undertaken more than 23,000 metres of
first pass drilling on the first few of those prospects.
Purepoint also completed in 2008 the program expenditures
necessary to earn its initial 20% joint venture interests in the
two additional Basin projects Purepoint operates in joint venture
with Cameco Corporation and UEM Inc. Purepoint may eventually earn
up to 50% in these projects, however it has no further funding
commitments in 2009 or 2010.
Focused Exploration
Until the return of more reasonable market conditions, Purepoint
has determined that it would be in the best interest of its
shareholders to defer certain budgeted drilling and other programs
in 2009 across its diverse project portfolio and limit ongoing
exploration expenses to focused infill geophysics programs on its
top three priority targets:
1. Red Willow's Osprey Zone, where diamond drilling returned
assay grades as high as 3.03% U3O8 at shallow depths of less than
100 metres;
2. Turnor Lake, where most of the diamond drill holes completed
to date have returned significantly elevated radioactivity and
favourable alteration; and
3. Smart Lake, where Purepoint intersected a radioactive
structure over 54 meters reflecting intense clay alteration,
silicification and hematization.
Exploration Efficiencies
Since inception Purepoint has worked hard to deliver "precision
exploration" by ensuring that every exploration dollar is spent as
cost-efficiently as possible. To deliver efficiency Purepoint,
unlike most of its peers, established an internal operational
infrastructure designed to deliver exploration services at a cost
significantly less than those available from third party suppliers.
In 2008 Purepoint achieved a per unit reduction of 30% for its camp
and field support costs and as much as 50% reduction in its
drilling costs per metre. Management expects this savings to be
maintained and improved upon in coming years. By way of example,
Purepoint:
- owns, rather than rents, its exploration camps;
- owns or finances, rather than contracts, its drilling
equipment;
- utilizes, where possible, permanent year round exploration
camps; and
- establishes temporary or year-round ground access to its
camps, rather than relying on expensive air freight and helicopter
transport.
Where possible Purepoint takes the longer term view and incurs
upfront expenditures where significant longer term efficiencies can
be realized.
Purepoint's commitment to cost efficiency is reflected in the
nature and results of its exploration programs. The company invests
heavily in the upfront geophysical work necessary to pinpoint
existing conductors, structural faults and other geologic
anomalies, prior to the more expensive first pass or follow-up
drilling.
Although there are no industry specific statistics readily
available, Purepoint has compiled and maintains its own database of
the exploration and drill programs publicly released by more than
25 of the grassroots junior exploration companies operating
predominantly in the Basin. Based on that database, Purepoint
management believes that over the current exploration cycle (2005
through 2008) Purepoint can quantifiably demonstrate that:
- Purepoint has drilled and disclosed more diamond drill holes
than any other peer in the Basin (96 of the 665 drill hole results
disclosed)
- Of the peer drill results published, less than 10% reported
0.005% or more U3O8 (generally the threshold level Purepoint
believes to be worthy of follow-up)
- In contrast, more than 50% of Purepoint's drill results
reflected 0.005% or more U3O8, with nearly 10% producing results
greater than ten times that threshold over at least one meter
Purepoint has made available on its web site a summary chart for
each of its properties detailing, on a target by target basis, the
results of all of its drilling to date. The company intends to
maintain and update these charts as results become available in
order to provide investors with a clear and complete picture of
Purepoint's exploration progress.
About Purepoint
Purepoint Uranium Group Inc. is focused on the precision
exploration of more than 55 defined target areas on its eight 100%
owned projects in the Canadian Athabasca Basin, and its two Basin
projects joint ventured with Cameco Corporation and UEM Inc. a
company owned equally by Cameco Corporation and AREVA Resources
Canada Inc. Established in the Basin well before the resurgence in
uranium, Purepoint is actively advancing this large portfolio of
multiple drill targets in the world's richest uranium region.
Scott Frostad BSc, MASc, PGeo, Purepoint's Vice President,
Exploration, is the Qualified Person responsible for technical
content of this release.
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Contacts: Purepoint Uranium Group Inc. Chris Frostad President
and CEO (416) 603-8368 Website: www.purepoint.ca
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