Very positive: Analysts rate exploration success of uranium company Aero Energy

Canadian uranium company Aero Energy (TSXV AERO / Frankfurt UU3) and its operating partner Fortune Bay have measured high radioactivity in only their second drill hole on the Murmac project in the Athabasca Basin in connection with visible uranium mineralization, among other things. (We reported) The analysts at Red Cloud Securities have taken a closer look at the announcement and rate it as “very positive” for the company.

According to Red Cloud, such high radioactivity (up to 33,600 excursions per second) supports the thesis of the Aero geologists that strong alterations, the structure, the radioactivity and the occurrence of pelites and quartzites indicate a large mineralization system. This success justifies further drilling, even if some of it can probably only take place in winter, as the mineralization is partly under a lake.

New priorities emerged

Aero Energy’s goal this summer was to drill 20 to 25 wells with a length of 4,000 to 5,000 meters on the Murmac and Sundog projects. Now, however, the number of meters drilled is expected to be adjusted in real time. After all, according to the experts, two new priorities have emerged. Firstly, this potential discovery means that the drill rig will not be moved from the current target, but the company will carry out extension drilling along the trend and to depth. Secondly, Red Cloud said, the discovered link between uranium and graphite represents proof of Aero’s exploration concept – the company had assumed that uranium mineralization at Murmac could also be found in bedrock – and opens up the entire 30-kilometer trend running northeast to southwest for further exploration.

According to the analysts, the area is known for structural deposits of the Beaverlodge type, which are easy to discover on the surface. Deposits associated with graphite and hosted in bedrock such as Roughrider (Uranium Energy), Triple R (Fission Uranium) and Arrow (NexGen Energy) had not been tested there before Aero Energy.

In any case, Red Cloud continued, Aero had hit the right rock with its drilling. Strong radioactivity is located in structurally prepared graphitic pelites, below a contact with hematite altered quartzite at ~70-78 m depth. Pelites would provide a reducing environment that could support hydrothermal fluids in the precipitation of uranium, while alteration suggests that significant hydrothermal fluid flow may have occurred, and quartzite provides a competent contrast to support the channeling of these fluids.

The analysts have not yet rated the shares of Aero Energy (TSXV AERO / Frankfurt UU3) but are already looking forward to the analysis results of the samples from the drilling to date. They assume that continued exploration success will drive the company further upwards. Red Cloud sees the drilling results from Murmac and Sundog as well as from the Strike project in the second half of 2024 as catalysts for further share price gains.