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Blue Sky Uranium (TSX-V: BSK) CEO Niko Cacos on Progress at the Amarillo Grande Project: High-Grade Drill Results and Forthcoming Maiden Resource Estimate

February 7, 2018

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is President and CEO of Blue Sky Uranium (TSX-V: BSK)(OTC: BKUCF), Mr. Niko Cacos. Niko, how are you sir?

Nikolaos Cacos: Doing very well and a real pleasure to be on your program, Gerardo.

Gerardo Del Real: Well thank you for making time. I know you've had a very, very busy several months despite the overlay with the holidays. I thought it was important to give everyone an update. The last time that we spoke, you were in the process of expanding the Amarillo Grande project in Argentina. Argentina has seen a lot of support on the mining side. There's recently been some big news out of Russia for the potential for a quarter billion dollar investment for uranium exploration in Argentina, and you've had positive news both with the drills and on the metallurgical side, so I thought we'd touch on all of that.

I have to believe that the positive news is why your non-brokered private placement back from November was oversubscribed. If you could just give us an update on the project and how things are coming along, I'd love that.

Nikolaos Cacos: Gerardo, things are coming along really, really well. Everything so far has exceeded our expectations and that's made the whole team here super excited. The drilling program, we've been drilling along. We've completed our drilling now and we're in a state of compiling a 43-101 compliant resource calculation. We hope to have that out by later this month, so that's very exciting. But as the drilling went along, the grades kept getting better and better and better.

And at one point I took a look and I said, "Holy smokes, are these grades that we're seeing in Athabasca, the hard rock high grades.” Because they need that there in order to make that economic and no, these were true grades. We got up to 20,000 ppm, or 2% of U3O8, over significant widths here. If you consider the grades that for similar deposits worldwide to make these kinds of surficial deposits economic need to be around 300. So obviously this will add a significant positive economic element to our project. We're very excited to see how that's going to play out in the numbers when they're finished crunching by the end of the month. Then we also announced some metallurgy. And, Gerardo, what can I say? It looks like it’s really easy to get the uranium out of the rock.

Gerardo Del Real: And that's really important, Niko. And I want to back track just a bit, because you touched on two points that I think often times speculators and investors in this space overlook. It's great to hit high grades, but you need the width, right? You want this stuff to be minable, and then you've got to be able to recover it. The metallurgy's important.

Let me read some of the intercepts, just to give people some perspective and context. One of the intercepts was 8,618 ppm U3O8 over 2 meters within 2,867 ppm over 8 meters. You had another intercept, it was 1,838 ppm of U3O8 over 5 meters. I could go on. 1,423 over 6 meters. 777 over 5 meters. We're not talking a one-off, we're not talking just half a meter of very high grade. These are significant widths.

Nikolaos Cacos: This is very, very significant width and there are widths that go up to 20 meters in some cases. We're seeing that this is a game changer in terms of economics here. These are the kind of projects that all you need is between 300 and 400 and that's when you look at the Wiluna Project in Australia, very similar style project as ours here. The average grades between 300 and 400 ppm and they're making money now. When you get grades like this it means it has the potential to make a lot more money. This will add significant tonnage into significant pounds to the uranium in a resource calculation and like I said it's going to be our maiden resource.

And what's important to remember, this is on the Ivana target, the very southernmost one. This is just one target on a very, very large district that we own. We own over 140 kilometers by 50 kilometers wide and we've seen uranium targets all across and what we're trying to do is to develop and understand the model perfectly on this and then apply this methodology and make multiple more discoveries all along this entire trend.

Gerardo Del Real: Excellent. Can we go over the metallurgical results, because, again, those are important for potential future economics, right?

Nikolaos Cacos: Absolutely, sure.

Gerardo Del Real: Yeah, go ahead please.

Nikolaos Cacos: No, no. Please go ahead.

Gerardo Del Real: I'm looking at the actual report here and I think it looks like you got greater than 95% recoveries using alkaline leach. Is that correct?

Nikolaos Cacos: That's absolutely correct. What alkaline leach for the average person like me, what that means is its very cheap. To extract the uranium doesn't add a lot of extraction cost. Basically what you do is – and this is not in hard rock, this is a like a flat, sandy area – so you scoop it up, you pile it up. You remove all the large pebbles, because they don't contain any uranium. They use a sifting or a screening process. Again, very cheap to do that. It increases the concentration of U3O8 and then you apply alkaline leach on top of it and you extract the uranium. It just leaches out of the bottom. Very cheap and this is going to be a very low-cost recovery process, so it keeps our potential capex and operating costs very, very low.

Gerardo Del Real: Again, this is from the Ivana target, the largest target thus far, correct?

Nikolaos Cacos: Yes, it's the most advanced target. The other targets that we've got still require a lot more work, but we have decided to focus on one target and understand it fully before we apply the model elsewhere.

Gerardo Del Real: Perfect. Now I understand that the leach processing, the alkaline leach processing method that you're using is also important because the second part to this project is the vanadium angle. Can you speak to that a bit?

Nikolaos Cacos: Yeah, we're able to extract up to about 60% of the vanadium using a leaching process, which is not bad. The way I understand metallurgy, it's like a Rubik's Cube. You get one face of it and then to get the other faces all lined up, you have to just keep working on it. This is still a work in process. We firmly believe that we can do better than 60% and we will do better, but what was really encouraging was to see that up to 95% extraction of the uranium on the first go. Metallurgical studies are still ongoing and we're going to have reports as results come out.

Gerardo Del Real: Wonderful. Now we touched earlier on the fact that you had a very successful, oversubscribed private placement. With that being said, you mentioned earlier the 140 kilometer long trend that you have. With the investment and the support that mining is getting in Argentina right now, I have to imagine that you have to be entertaining calls from people that may want to come in and possibly joint venture a part of the project. I know it's touchy and you can't get into details, but is that an option for the company in the future?

Nikolaos Cacos: That's a great question and yes, it's very true. We have a lot of interested parties knocking on our door right now. But I think at this point what we want to do, we're well funded right now, what we want to do is complete the 43-101 report and put that out there and then afterwards look at what we've got. And before we talk about joint venturing or anything, we want to assess what we feel we can do further. One thought is that we would do a Preliminary Economic Assessment to show the economics of this project and secondly, we would go and prove up some other deposits in other target areas so that we can add to the potential returns for our shareholders.

Gerardo Del Real: That's exciting stuff, Niko and again, when do you anticipate that maiden resource to be published?

Nikolaos Cacos: The maiden resource should be published by the end of February, at the very latest first week ...

Gerardo Del Real: Coincides with PDAC imagine that.

Nikolaos Cacos: Yeah, I know. No, we're not timing it for that, but it just happens to be coincidental though.

Gerardo Del Real: It makes perfect sense coming out of the holidays, Niko.

Nikolaos Cacos: Yes.

Gerardo Del Real: It sounds like 2018 is going to be an exciting one. It's great to see the interest, it's great to see the share price respond frankly since the last time we've spoken. I think the market cap has nearly doubled so that's exciting as well.

Thoughts on the overall uranium market? I know many people, including myself, are waiting for the next shoe to drop. The next catalyst that gives direction to the uranium spot price. Can I get your thoughts? You have your finger on the pulse pretty well.

Nikolaos Cacos: Yes, wwe're seeing nuclear reactors being built globally everywhere right now. Even in Japan, even oil producing companies like Saudi Arabia. We're seeing smart money now, like what you mentioned earlier, the quarter billion dollar investment that the Russians are looking into Argentina. We're seeing smart money starting to chase uranium. Uranium is the only carbon friendly and most efficient form of energy production in the world right now. We don't have anything else that's as good as uranium and I think slowly people are beginning to understand that. I think we're seeing uranium making a big comeback, which is very exciting to see and hopefully it's coinciding with Blue Sky's emersion here. We've really started 2018 with a real positive kickstart and this is going to be a very, very exciting year for Blue Sky and for our shareholders.

Gerardo Del Real: Niko, it's a pleasure to have you on. I look forward to having you back on, especially as we get closer to that resource estimate being published.

Nikolaos Cacos: It was my pleasure being here on your program, Gerardo. Thank you.

Gerardo Del Real: Thanks again, Niko.

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