Blue Sky Uranium (BSK.V) has completed its 61 hole Reverse Circulation drill program, which allowed it to complete just over 1,000 meters of drilling (as a reminder: Blue Sky’s exploration targets are hosted in very shallow sandstone zones, and the average drill hole is just 15-20 meters deep).
Blue Sky has successfully extended the footprint of the uranium mineralization at Ivana as it increased the total size of the Ivana zone by approximately 1000 meters to the south of the current resource estimate (23.9 million tonnes at 360 ppm U3O8 and 0.019% V2O5). That’s a positive development, but the average grade of the highlighted drill intervals are a bit on the low side. The company seems to have encountered a lot of zones in the 100-250 ppm range, but as this is below the average grade of the current resource estimate, the viability of these zones will depend on Blue Sky’s metallurgical test work to upgrade the uranium levels. It’s encouraging to find more vanadium, but the vanadium pentoxide grades in all of the mentioned drill intervals are also below the 190 ppm (0.019%) V2O5 in the resource estimate. The Ivana deposit is definitely expanding, but it would be nice to find some slightly higher grade zones as well. But one thing is for sure: the uranium mineralization is widespread at Amarillo Grande.
As a reminder, every 100 ppm of Vanadium represents 0.22 pounds, and currently has a market value of $4-5/t (using a V2O5 price of $22/lbs), so even 100-150 ppm vanadium zones could still add a few dollars per tonne in by-product revenue (depending on the recovery rate and payability ratio by the offtakers). Vanadium used to be a marginal by-product for Blue Sky Uranium, but it now looks like the metal could play an important role in determining the viability of the project.