Spring breakup came early for Forum Development (TSX: FDC), and today's news release showed a continuation of the decline which began a few trading days ago. Cutting short the drill campaign was weather-related, not result-related. In talking with Rick Mazur about his joint venture's recent drill campaign at Costigan Lake in Canada's Athabasca Basin, there was a sort of sadness in his voice. "Unfortunately due to spring breakup coming a little more quickly upon us, we were unable to continue our planned program and to drill two further holes we wanted to test," Mazur told us.
What Forum did find will be interpreted by Dr. Boen Tan, when assays come back from the lab. Mazur expects them by the end of this month. Dr. Tan's interpretation may very well turn around the stock's recent and steep sell-off. This is the typical "buy on the mystery, sell on the history" found in nearly all Canadian exploration plays. The news release announces 824 meters of drilling. Five holes were drilled at shallow depths, between 125 and 160 meters. Three of the holes encountered radioactivity in the C3 conductor. Five holes spaced out over a 2.4 kilometer strike length was a pretty speculative exploration plan, but the plan was to find a "sniff" of uranium mineralization and not a uranium mine. We believe there may be reason for optimism with the exploration project.
Drill Doctor
We talked about the C3 conductor. "This one conductive trend occurs over the full extent of the property," Mazur explained. "It hosts the uranium mineralization from previously drilling from 1978-79 appears to be the conductive horizon of interest to us. There is anomalous radioactivity in the footwall of the graphitic horizon, which is highly encouraging to us. It is typical of the mineralization which occurs in the basement rocks at Key Lake (Athabasca Basin, Saskatchewan province in Canada)." Mazur talked a bit more about the geology, "The drilling has confirmed that it is due to a very thick graphitic horizon. That's promising."
So where does Forum Development stand on this property? "We have to go back in and drill some more holes," said Mazur. "This drilling campaign has verified that it does have potential. At this stage, we would most certainly like to go back in and continue drilling." But he laughed and added, "Of course, I have to go over that with my joint venture partner." He was referring to Breakwater Resources, which is the minority joint venture partner on the Costigan Lake project. Mazur will be mobilizing the company's wholly owned Maurice Point project for a summer program. Maurice Point is where Forum's geologists found uranium mineralization over a 100 meter strike extent, grading up to 7.3 percent U3O8 during the last field season.
Forum Development shares may be down for now, and may bottom around these levels, depending upon the momentum of the spot uranium price. But, don't rule them out so fast. They have planned a series of exploration projects over the coming twelve months, which should again create some upward momentum. For the speculatively minded, the quiet period between exploration programs may offer an opportunity to acquire shares at bargain prices, before the next momentum rally. If spot uranium prices continue to rise, or sustain at the current price level above /pound, then optimism in the sector will continue. And Forum Development should hold its own, stock-wise.
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