Indigo Exploration (TSXV:IXI) has announced the acquisition of a 100 percent interest in the Hot property, a uranium project located in the Shirley Basin of Wyoming, US.
“Gaining 100 percent interest in a project of this calibre, located in a key uranium district next to past production and some of the preeminent US-focused uranium producers and developers, and with extensive historical drill results, is an exciting new development for the Company,” Indigo’s President and CEO Paul Cowley commented in the company’s press release.
The Hot property covers 71 unpatented mineral claims over a 5.75 square kilometer area and has been the site of extensive historical exploration since the 1960s.
Wyoming is historically the largest uranium-producing state in the US and has the greatest uranium ore reserves. The Shirley Basin produced over 51 million pounds of U3O8 from 1960 to 1992 at an average grade of 0.22 percent U3O8. However, depressed uranium prices in the late 1900s led to many mines in the region shuttering. The resurgence in uranium prices in recent years has brought interest back to the region as companies look to restart operations, develop uranium deposits or make new discoveries.
The Hot property is situated near notable uranium projects, including Ur-Energy’s (TSX:URE,NYSEAMERICAN:URG) Shirley Basin in-situ recovery project and Nuclear Fuels’ (CSE:NF) Bobcat uranium project.
Ur-Energy’s Shirley Basin project hosts an NI 43-101 measured and indicated resource of 8.8 million pounds of U3O8 grading 0.23 percent. It is currently under construction with the goal of entering production in 2026.
Historical drilling data from the 1960s at the Hot property shows shallow mineralization. Of the 202 holes drilled, 46 percent intercepted shallow uranium mineralization, with depths ranging from 3 to 130 meters, including two near-surface intercepts of 1.83 meters of 1.1 percent U3O8 at a depth of 43 meters and 3.35 meters of 0.28 percent U3O8 at a depth of 26.8 meters.
The acquisition terms involve Indigo paying C$20,000 and issuing 200,000 shares to a private vendor, for which it would acquire 100 percent of the private company that owns the Hot property. It remains subject to the approval of the TSXV.
Currently, Indigo plans to design an initial verification and infill drill program for the Hot property, with drilling projected to start in early fall 2024.
The uranium market experienced notable volatility in Q1 2024, with prices reaching over US$100 per pound in January. They have since consolidated below US$90 per pound. The long-term outlook for the uranium market is positive as analysts highlight supply-side fragility, particularly with production issues in Kazakhstan, as a key driver of future price increases.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.