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QAMANITTUAQ/BAKER LAKE - A Vancouver-based exploration company is the second company this year to sign a memorandum of understanding with Nunavut Tunngavik Incorporated (NTI) granting the company permission to explore Inuit-owned land recently freed up by NTI's uranium policy.

Forum Uranium Corp. and NTI signed the agreement last week - which gives Forum the exclusive right to explore the Northern half, or 27,000 hectares, of the selected parcel.

The parcel, located 60 km west of Baker Lake, is surrounded by a number of other high-profile projects: to the north, Agnico-Eagle's Meadowbank gold mine, set to begin commercial production in March 2010; to the west, Areva Resources Canada Inc.'s Kiggavik uranium project, which is currently under a feasibility study.

To the west and north, the parcel is also surrounded by other properties Forum has an interest in, including land, held in partnership with Agnico-Eagle Mines Ltd., in which Forum can gain a 60 per cent interest if it spends $4 million in exploration by 2012. The company has already spent $1 million to earn its interest.

East of the parcel is land Forum holds in partnership with yet another company, Tanqueray Resources Ltd. Under that deal, Forum can own 51 per cent of the property if it spends $4 million in exploration by 2012.

In 2007 and 2008, Forum spent $6.5 million exploring the Agnico-Eagle and Tanqueray interest lands.

"We did a regional evaluation," said Rick Mazur, president of Forum. "We compiled all the historical geology and uranium mineralization. We prospected and sampled all the old showings."

What the company found is that some of the historical deposits spill onto the recently acquired NTI parcel, making it attractive to Forum.

"When the draft uranium policy became clear in 2006, I jumped in there because I knew that this ground was probably the best in the territory," said Mazur.

Mazur worked for Pan Ocean Oil Ltd. as a uranium exploration geologist in the late 1970s and early 1980s, gaining an intimate knowledge of the land.

Pending market conditions, Forum plans to spend at least $1 million exploring the parcel next summer, which has gone largely unexplored under NTI's tenure, said Mazur.

Forum has retained some workers from Baker Lake to work as camp cook helpers and prospectors for previous exploration efforts and plans to do so again.

"That's part of our business model," said Mazur.

As it develops the land, Forum will also seek a partner and it's setting its sights on major mining companies.

"The reason I think it's highly attractive to a major is ... look at the names," he said. "You've got Areva, Agnico-Eagle and Forum. I really think that for a major mining company that would like to have a very strategic land position in an emerging uranium mine development camp, this is a great opportunity."

Under the terms of the deal with NTI, once a feasibility study for the parcel is in hand, NTI has two options. Under the first, it can pay for 20 per cent of the development and construction of the mine and reap 20 per cent of the mine's net revenue. Under the second, NTI can contribute no money to the mine's development and collect a 19.5 per cent net royalty on profits, albeit one measured against the accumulated costs of constructing and operating the mine.

Carson Gillis, director of lands and resources for NTI, said Forum's strategic position in the region made it an easy choice for the parcel.

"There were a couple companies interested in the northern part of this parcel. But with Forum, they've picked up, over the last year or so, a lot of mineral property around the proposed Kiggavik project. The parcel that we entered into agreement with them is smack in the middle of that," said Gillis.