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Purepoint Uranium Group research and analysis

Contributed by eResearch

By Bob Weir

Purepoint Uranium Group Inc. has announced the winter 2012 exploration plan for the Company’s Red Willow project in the Athabasca Basin in Saskatchewan.

The exploration will be carried out by RioTinto, which is earning a controlling interest in the property by spending up to $22.5 million in exploration and development expenses. Purepoint optioned the property to Rio Tinto in late 2010.

Rio Tinto will be drilling at the Osprey and Geneva areas, both of which have returned anomalous intercepts of uranium, pathfinding elements and basement alteration.

Highlights of the 2012 Red Willow Exploration Plan

(a) About 1,500 metres of diamond drilling on targets within the Osprey area (intercepts up to 0.20% eU3O8 over 5.8 metres) and Geneva area (intercepts up to 0.33% U3O8 over 0.5 metres);

(b) Gravity survey in the Geneva area to infill and extend the known gravity low targets (potential zones of hydrothermal alteration).

The Red Willow Property

Purepoint’s Red Willow property, on the eastern edge of the Athabasca Basin, measures 25,612 hectares. The property adjoins AREVA Resource Canada Inc.’s claim group (containing the JEB, Sue, McClean and Caribou deposits) to the west, and UEX’s Hidden Bay property to the south. The latter property surrounds Cameco Corporation’s Rabbit Lake, Collins Bay, and Eagle Point deposits.

THE COMPANY

Purepoint is an early-stage Canadian exploration and development company, focused on exploration of its uranium prospects in the uranium-rich Athabasca Basin in northern Saskatchewan, Canada. The Company is involved in project partnerships with the three largest uranium producers in the world: Cameco Corporation; AREVA; and Rio Tinto, plc.

RECOMMENDATION AND TARGET PRICE

We continue to recommend the shares of Purepoint Uranium as a Speculative Buy, suitable only for risktolerant investors. Our 12-month Target Price remains $0.60 per share.

The price objective presupposes a return of investor interest to the uranium sector; `not just to the senior producers, but to the junior exploration companies as well. This is far from certain in the near term.

eResearch Analyst:
Bob Weir, B.Sc., B. Comm, CFA