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CanAlaska Uranium Letter to Shareholders

August 2017

Dear Fellow Shareholders:
 
CanAlaska has had an exciting series of events in the past twelve months, and is now well positioned to grow substantially over the next years. I thank you for your support.
 
CanAlaska has two impressive, large uranium projects in the Eastern Athabasca Basin. West McArthur is under a $12.5 million option (since early 2016) with Cameco and is undergoing drill testing in two areas as I write. Cree East, the other large land holding (56,000 hectares) is now 100% owned by CanAlaska after undergoing $19 million of target development by our Korean partnership.
 
Cameco's drilling at West McArthur is coordinated from their McArthur River uranium mine located about 10 kilometres east.

In early 2016, we also embarked on a $20.4 million venture with De Beers with the aim to investigate large kimberlite-like magnetic features in the Western Athabasca Basin. In late December 2016, we regained 100% control of this project, after De Beers first drill holes identified magnetic material in the overburden as being the cause of many of the high response magnetic anomalies. Eighty-five clusters of surface magnetic targets were detailed on their extensive low-level airborne mapping surveys.  Their drilling did not investigate the deeper modeled targets, as this would have required a winter drill program in areas of lakes and swamps, inaccessible during the summer period. These deeper targets model as small to moderate size kimberlites and remain for CanAlaska to test.
 
The most fascinating result from De Beers' drilling was the thick sequences (10-20 metres) of magnetic material intercepted in the overburden at five of the seven drill sites. This magnetic material is not magnetic sand, as might be expected, but instead the magnetism appears to be caused by micron size magnetic particles impregnating the top of glacial deposits.  Additionally, there are no other recent detrital minerals along with the magnetic "mud".  The scientific enigma is the high iron content of the mud (up to 89%) and the formation of magnetite under atmospheric conditions within the past 10,000 years, rather than the more common iron oxides of hematite and limonite. The question remains, where did all of the iron come from? Was the magnetite formed from bacterial action in an anaerobic environment?  Why do these magnetic targets only show up in this area?  I encourage those with more knowledge on this subject to review the images and data on our website and contact Karl or myself with their explanations.  There is more to be unraveled here.
 
Returning to our uranium interests, Cameco is currently drill testing the large conductors at Grid 1 and Grid 5 on the West McArthur property.  The Grid 5 conductor package hosts high grade uranium at Cameco's Fox Lake deposit, just east of our property boundary.  We infer that the broadening of the conductor as it bends in a southerly direction at the north end of Grid 5 indicates repetition of the graphitic units by thrust faults.  This is also indicated by the low angle faults intercepted in Cameco's first holes, as well as the extensive alteration in the top 400 metres of historical drill hole EL 07.  The drill program now operating should answer a number of the questions that we have, but it will take several more drill programs to test the two kilometre long ZTEM anomaly that is straddled by the current drill holes.
 



In July 2017 we finalized the purchase from our Korean partners of their 50% interest in the Cree East uranium property. We now have an unencumbered 100% interest with nine large targets which were identified through their extensive work programs. Two of these targets (Zone A and Zone B) appear to host very large uranium bearing alteration systems in the Athabasca sandstone, which we have only just started to test for unconformity and basement hosted uranium mineralization. At Zone B t he hydrothermal system appears to extend at least 800 metres to the east and to the west.  The multiple-element geochemical halo, the fluid dissolution effects, as well as the sporadic higher uranium responses indicate that the main target in this area is part of an intense chemical and physical hydrothermal event, typically associated with a large uranium deposit. The property has over fifteen years of assessment requirements banked, and with a discovery, is well located to utilize the extensive infrastructure available in the Eastern Athabasca Basin.
 
Two other uranium projects are currently under third party option. Our Moon South property is also being explored, under an agreement with Denison Mines, and we are looking forward to the next program of drilling on targets that appear sub parallel to their nearby discoveries at Phoenix and Gryphon. In Northern Manitoba, Northern Uranium Corp is still earning an 80% interest in our NW Manitoba project under a $12.5 million agreement.  So far they have drilled one uranium bearing alteration system at Maguire Lake, but additional drilling on this target and other nearby large gravity targets are awaiting funding.

We have worked to preserve our cash and have sold surplus assets such as our warehouse in La Ronge. Our multimillion dollar agreements with industry leaders have provided continued opportunities for discovery.  We remain committed to our uranium properties in the Athabasca. We also pursue opportunities created by our technical staff through their research and work that identify other projects of merit that we can market to outside investment and mining groups. This year we continued to advance our copper-zinc targets in the Ruttan-Nisku area, and more recently we have acquired further land packages in the Thompson area. For these properties we will be looking to find third parties interested in drill programs so as to expose us to multiple discoveries and increase the value of CanAlaska. With outside project funding we can protect CanAlaska shareholders from unnecessary financing and dilution, and still participate in new mineral discoveries.
 
CanAlaska continues to be grateful for the community support from the Fond Du Lac First Nations, the Black Lake First Nation, Hatchet Lake First Nation and English River First Nation in Saskatchewan. In Manitoba, the community of Lac Brochet is working with our partner to carry out the next phases of exploration on our NW Manitoba licence area. 
 
I am personally grateful for the long term support of our larger shareholder groups and individual investors, as well as our core staff and contractors. As a team, we look forward to attracting additional strategic partners to participate in our exploration projects. Our continued aim is to provide our shareholders with the rewards of exploration and corporate success. Exploration in Canada has a great future, and at CanAlaska, we intend to make our best efforts to be a successful participant. The Company is well prepared for the next market up-swing. If you have not already done so, please visit our website (www.canalaska.com) and opt-in to receive news releases to stay up to date. You can also follow us on Twitter to learn of developments in the uranium market and nuclear energy: https://twitter.com/CanAlaska.

Yours very truly,

Peter G. Dasler, M.Sc., P. Geo.

President & CEO
CanAlaska Uranium Ltd.
 


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Forward-looking information:
 
All statements included in this email that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These forward-looking statements involve numerous assumptions made by the Company based on its experience, perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. These assumptions include, but are not limited to: future costs and expenses being based on historical costs and expenses, adjusted for inflation; and market demand for, and market acceptance of, the offering. In addition, these statements involve substantial known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will prove inaccurate, certain of which are beyond the Company's control.  Readers should not place undue reliance on forward-looking statements.  Except as required by law, the Company does not intend to revise or update these forward-looking statements after the date hereof or revise them to reflect the occurrence of future unanticipated events.