Critical Commodities with Jack Lifton: A Uranium Boom?

We’re inaugurating a new feature this week. Every Monday morning InvestorIntel will bring you a brief commentary on what news’ events drove critical commodity prices during the preceding week. Keep in mind that “news” in the mainstream media is not proof either of new resource discovery or of market demand. It does, however, often drive demand for shares in related mining ventures and in commodity metal exchange prices for the “metals of the week.”

Uranium is the winner of the commodity news cycle for last week not because of any new discoveries or unusual rise in end-user demand, but because a credible, well-financed Canadian fund manager, Sprott, announced that it had raised more than a billion dollars for the purpose of acquiring physical uranium on the spot market. By mid-week, Sprott’s Physical Uranium Trust, an ETF, (TSX: U.UN), reported that it held 27,000,000 lbs of uranium (in the form of “yellowcake,” the oxide form of uranium produced by miners and traded in the markets). Many articles noted that the annual U.S. demand for uranium for its 100+ civilian power reactors is 43,000,000 lbs., and that essentially 100% of this is imported from just three countries, Canada, Kazakhstan, and Australia.

The quoted (reported) spot prices of uranium rapidly rose as the chart below shows:

As these events, the rise in the price of uranium and a sharp increase and decrease in the share price of uranium producers/processors, such as Energy Fuels Inc. (NYSE American: UUUU | TSX: EFR) unfolded. I reached out to InvestorIntel uranium expert and frequent contributor, Dean Bristow, with a question, “Is Sprott trying to corner the physical uranium market?” [A market “corner” is an operation that attempts to control so much of a commodity that the operator controls the price.] Dean responded:

“…I don’t think Sprott is trying to corner the market so much as opportunistically force the market’s hand. The majority of uranium is contracted long-term and very little transacts in the spot market. Apparently, China has a lot of 10-year contracts rolling over so they will be back in the market but if Sprott can crank up the spot price with a relatively small amount of cash (realistically totally screwing with the price dynamic for an entire commodity for $2 billion is pretty inexpensive) then it should be good for all uranium producers across the board.

Not to say that Sprott is trying to be benevolent to the uranium industry. I’m sure their fund is making a pretty good return raising $1.3 billion in a span of 2 months. But the big picture is that if the long-term contractors have to pay up then it could become a new higher threshold for uranium prices. Advantage Cameco and Kazatomprom who are the lowest-cost producers.

However, I’m still on the fence as to how high uranium prices can go given I have to think at some price threshold Kazatomprom (the national uranium company of Kazakhstan, the world’s largest uranium producer), who pulled an OPEC move and shut-in 20% of its production, will start ramping things back up to protect market share. Likely just before the price reaches the point of others firing up their inactive mines. I’m not nearly as bullish as many of the talking heads on the financial networks but I wouldn’t rule out another leg up in uranium stocks before the bloom comes off just like it has for lumber, iron ore, copper, aluminum, etc….”

As far as the effect of Sprott’s operations on the share prices of uranium producers and juniors please look every day at Investorintels’s daily Uranium Investorchannel for that day’s closing prices and percentage valuation changes. I am singling out Sprott’s Physical Uranium Trust as the prime mover in the current uranium boom(let), because it is an excellent example of how one actor can influence the price of a scarce commodity. It is estimated that in 2020 just 124,000,000 pounds of uranium (in the form of  U3O8) was produced worldwide. By contrast, world coal production in 2019 was 17,000,000,000,000 pounds! Yes you read that correctly. Coal production was 10,000 times as large as uranium production. This should give you a feel for the relative energy content recoverable from uranium as compared to coal!

Note that share prices are influenced also by factors such as liquidity (How many shares are typically traded), short-term profit-taking, short selling, and on which exchange(s) the shares are listed. Uranium related shares yo-yo’ed last week mainly for these reasons not just because of the posted price for uranium.

By the way, world demand for uranium in 2020 was estimated at 181,000,000 pounds. Imagine what could happen to the price of uranium if environmentalists ever figure out how much carbon dioxide emissions could be reduced by substituting nuclear for coal as the heat source for the steam needed to turn turbines in electricity generation plants.




The Red Hot Uranium Update Highlights Azincourt Energy Corp.

Another day, another decent gain for anything even remotely related to uranium. Frenzy about the Sprott Physical Uranium Trust (TSX: U.UN) et al out there buying up spot uranium, and what the Reddit crowd are up to has this segment of the market going parabolic. It’s not just the micro caps either. The established players like Cameco (TSX: CCO | NYSE: CCJ) and Denison Mines Corp. (TSX: DML | AMEX: DNN) are up 34% and 38% respectively month to date. Other smaller cap names are up anywhere from 50% to 100%. And in case you haven’t noticed, it’s only mid-month.

As a long time follower of uranium and uranium stocks, I was a little skeptical about this current move. As I sit here wiping the egg off my face, I have to confess I totally missed the boat on this move having sold the last of my uranium holdings (including U.UN) right around the end of August and beginning of September just as this run was getting started. As noted, I’ve watched uranium for a long time and thought the beginning of this rally was going to be as good as it gets. Chalk up another trading lesson learned the hard way.

It appears uranium is the hot place to be right now, and I’m obviously not the one to judge whether this is just the start or not, so let’s dig down into the small cap space and see what we can find to whet our appetite. Today we look at a company called Azincourt Energy Corp. (TSXV: AAZ), a Canadian based resource exploration and development company with core projects in the clean energy space. Their two core areas are a uranium exploration project in the prolific Athabasca Basin, Saskatchewan, Canada, and lithium/uranium projects on the Picotani Plateau, Peru. That’s right, if uranium isn’t hot enough for you right now they also have some lithium exposure but today we’ll focus on the uranium side of the ledger.

The Athabasca Basin in Saskatchewan is one of the most prolific uranium districts in the world. There’s even a city called Uranium City in the region, not that a city name equals good geology. Nevertheless, there are numerous world class discoveries in the Athabasca Basin including Cameco’s Cigar Lake mine which is the world’s largest uranium mine when running at full capacity. Within this basin is Azincourt’s 70% interest, 25,000+ hectare East Preston property with joint venture partners Skyharbour Resources (TSXV: SYH) and Dixie Gold. The property is strategically located near NexGen Energy Ltd’s (TSX: NXE | AMEX: NXE) high-grade Arrow deposit, Fission Uranium Corp.’s (TSX: FCU) Triple R deposit & AREVA/Cameco/Purepoint’s joint venture Spitfire. Pretty good company if you are playing the closeology game.

Source: Azincourt Energy Corp. website

But where this story gets interesting is what’s to come this winter. The Winter 2020-21 drill campaign was a planned 10-12 hole, up to 2,500 meters, diamond drill program but was cut short due to warm weather and early onset of spring break-up resulting in only 5 holes completed for 1,195 meters. Anomalous and elevated uranium levels were encountered in three of the five holes completed and the elevated base metals and uranium suggest that there is uranium-bearing fluids in the area. These results have management confident they can vector towards the sweet spot. This August the Company completed an airborne radiometric survey further highlighting focus areas for this stage of the project. Correspondingly, the Winter 2021-22 program will consist of approximately 7,000 meters in 30-35 drill holes. This will be the largest drill campaign yet at East Preston and permits and funding are in place to complete all the planned work through the winter.

Anyone who has read any of my articles before knows that I like exploration companies that have money to generate lots of results. Azincourt fits into that category with over $4M in cash at the end of June and as they’ve stated, they should be fully funded for 30-35 drill holes this winter. Part of that is due to the infrastructure they put in place last winter and also if you only have to drill 100-200 meter holes you can do a lot of drilling very cost effectively. The one caveat to having a fully funded drilling program is that your capital structure can get a little unruly in order to keep the drill turning. Azincourt has 345M shares outstanding and another 200+ M warrants all with a $0.07 exercise price. With the stock closing at $0.11 yesterday this can be a great source of future funding but could make for a bit of a headwind to good news.

Regardless, as we await results from Azincourt’s winter drilling program, one can rest assured that in a market as hot as it is for anything uranium right now, if the Company finds anything the stock is likely to go crazy. In the meantime they are along for the ride which has been a very good one for investors so far. What inning are we in for the run in uranium? As I made very clear above, I’m not the right person to answer that question. However, you can rest assured I will be watching closer than most.




Market Wagers on Uranium as the Hottest Commodity, Ur-Energy Reveals an All-American Advantage

Spot uranium prices and correspondingly the underlying stocks that have any association with uranium are on fire these days. The biggest reason given for the sudden upward trajectory in the spot price of uranium is the massive increase in buying by the Sprott Physical Uranium Trust (TSX: U.UN). The newly-formed Sprott fund (created via the purchase of the publicly traded Uranium Participation Units) started buying uranium on the spot market in mid-August and has amassed over 24 million pounds of uranium, sometimes buying more than 500,000 pounds in a single day, according to its website and social media account. Then on Monday Sprott updated its at-the-market equity program to issue up to an additional US$1.0 billion of units of the Trust in Canada. That equates to an additional 25 million pounds assuming a price of US$40/lb and that doesn’t include spot volume being purchased by the likes of Yellow Cake PLC (LSE: YCA) and Denison Mines Corp. (NYSE American: DNN | TSX: DML). For context, the annual global demand for uranium is currently estimated at roughly 180 million pounds.

This resurgence in uranium prices to almost 7 year highs has helped uranium mining stocks across the board.  However, one company is poised to perhaps be the largest beneficiary of these higher prices and that’s Ur-Energy Inc. (NYSE American: URG | TSX: URE). Ur-Energy is engaged in uranium mining, recovery and processing operations, as well as the exploration and development of uranium mineral properties all within the friendly confines of the United States of America. With the USA having just under 100 nuclear reactors currently operating, which supply 20% of its generated annual electricity there’s no doubt that a secure domestic supply of uranium should be of ever increasing importance.

At Ur-Energy’s flagship project in Wyoming, Lost Creek, production has totaled approximately 2.7 million pounds of U3O8 since commencement of operations in 2013. While Lost Creek continues to operate at reduced production levels, the reduced production operations have allowed the Company to sustain operating cost reductions while continuing to conduct preventative maintenance and optimize processes in preparation for ramp up to full production rates. At the end of March the Wyoming Uranium Recovery Program approved access to six planned mine units in addition to the already licensed three mine units at Lost Creek. The approval also increases the license limit for annual plant production to 2.2 million pounds U3O8. The current mineral resource estimate for the Lost Creek Property, is 14.6 million pounds in the Measured and Indicated categories, and 6.44 million pounds in the Inferred category before subtracting production to date of 2.7 million pounds.

A little further East finds Ur-Energy’s second primary property at Shirley Basin, also in Wyoming. Property holdings of patented lands, unpatented mining claims, and private leases total nearly 3,700 acres (~1,500 hectares). A 2015 Preliminary Economic Assessment estimates 8.8 million pounds of Measured and Indicated uranium resources. The Company estimates that a total of 6.3 million pounds of U3O8 may be produced from the project which received all major permits required to begin construction of the project at the end of May. Situated in a historic mining district where past production was 28.3 million pounds of U3O8, the project has existing access roads, power, waste disposal facility and shop buildings onsite. Because delineation and exploration drilling were completed historically, the project is construction ready.

Ur-Energy recently announced Q2 results which were highlighted by ending the period with cash and cash equivalents of US$21.5 million and 285,000 pounds of U3O8 in inventory at the conversion facility. At yesterday’s price of roughly US$44/lb that equates to an additional US$12.5 million. Granted the Company does not anticipate selling its existing finished-product inventory in 2021, unless market conditions change sufficiently to warrant its sale. But as we’ve seen over the last few weeks the landscape is changing quickly. Additionally, there are just over 11 million warrants with a US$1 strike that expire Sep 25th which one would anticipate would be exercised for an additional US$11 million in funding. If all 11 million warrants are exercised the Company would have approximately 206 million shares outstanding giving it a market cap of just under US$380 million based on yesterday’s close of US$1.84. With the capacity to ratchet up quickly to 1.0 million pounds of annual U3O8 production at an estimated capital cost of US$14 million there seems to be an interesting value proposition here.




Back to the Future of Sourcing Uranium for Reliable Energy with Fission 3.0

It’s hard to envision the world getting all its electricity from renewable assets (solar, wind, geothermal, possibly hydro depending on how you classify it) any time soon. Sure Swanson’s Law and Moore’s Law would suggest that the cost-effectiveness and technology behind solar cells is improving at a very rapid pace but the reality is, we aren’t getting even close to our climate targets and reducing or possibly even eliminating the burning of fossil fuels for electricity unless we include nuclear power in the mix. There certainly seems to be ebb and flow around the perception of nuclear power as a green alternative. Nevertheless, it is a very efficient source of electricity that has a very low carbon footprint. In fact, it produces zero carbon emissions in the electricity generation process, but mining and refining uranium ore and making reactor fuel all require energy.

I’m a firm believer that nuclear power should be part of the asset mix going forward and I’m not alone. At present, about 10% of the world’s electricity is generated from uranium in nuclear reactors. This amounts to over 2,550 TWh each year, coming from over 440 nuclear reactors operating in 30 countries. About 50 more reactors are under construction and over 100 are planned. Belgium, Bulgaria, Czech Republic, Finland, Hungary, Slovakia, Slovenia, Sweden, Switzerland and Ukraine all get 30% or more of their electricity from nuclear reactors while France is over 70%. You also may be surprised to learn that the USA has just under 100 reactors operating, supplying 20% of its electricity.

This may sound pretty bullish for uranium but the reality is, post Fukushima (March 2011) there was a pretty noticeable (and negative) response on the demand side and it’s only been in the last couple of years that the overall supply/demand balance for uranium has come back into balance. In fact, it is slowly but surely creeping towards a reasonable supply deficit. You can almost see it happening on the spot uranium price chart below.

Source: TradingEconomics.com

So where am I going with all of this? I hope you’re thinking of uranium as an investment opportunity or I’m not doing a very good job. And where better to look for a uranium opportunity than a team that has already succeeded twice in finding uranium in one of the most prolific uranium districts in the world, the Athabasca Basin in Saskatchewan. Fission 3.0 Corp. (TSXV: FUU | OTCQB: FISOF) is the third generation Fission run by one of Canada’s leading uranium exploration teams. The Company’s management, headed up by Dev Randhawa as CEO & Chairman and Ross McElroy, is the team that founded Fission Uranium Corp. (TSX: FCU | OTCQX: FCUUF) and made the Patterson Lake South high-grade discovery. The same team also founded Fission Energy Corp., making the J-Zone high-grade discovery in the Athabasca Basin and building Fission into a TSX Venture 50 Company that sold the majority of its assets to Denison Mines in April 2013.

Granted Ross McElroy stepped down as COO of the Company in February to focus on the development of the Triple R deposit at Patterson Lake South owned by Fission Uranium. Mr. McElroy will remain on Fission 3.0’s Board of Directors, remain as the Company’s qualified person and he was still part of the technical team that built Fission 3.0’s portfolio of properties in Canada’s Athabasca Basin. And Fission 3.0 has plenty of them, 14 in total including 3 properties that basically surround the Triple R deposit.

Source: Fission 3.0 Corporate Presentation

Fission 3.0 used staking strategies and historic uranium discoveries in identifying claims in the Athabasca Basin. The Company has large tracts of land in close proximity to other major uranium discoveries. These properties were staked based on the innovative airborne technology that was used in discovering the uranium boulder field which lead to the PLS Triple R deposit.

Fission 3.0 engages in early-stage land acquisitions and is a “Project Generator”. The Company’s primary objective is to locate, evaluate and acquire properties with the potential to host high-grade uranium and to finance exploration and potential development by way of equity financing, joint ventures, option agreements or other means. In June Fission 3.0 raised $1.2 million for future exploration work, or elephant hunting if you will. With a market cap of just under $23 million there is a lot of leverage to the upside if this team is able to unearth another Triple R type of project (Fission Uranium has a current market cap of almost $395 million). Time will tell if their innovative airborne technology is the secret sauce for attracting those elephants.




Dev Randhawa on Fission 3.0 and why ESG Investors are looking at Uranium

In a recent InvestorIntel interview, Peter Clausi speaks with Dev Randhawa, Chairman and CEO of Fission 3.0 Corp. (TSXV: FUU | OTCQB: FISOF) about the rising market interest in uranium and exploring for uranium in Canada’s Athabasca Basin, the world’s leading source of high-grade uranium.

In this InvestorIntel interview, which may also be viewed on YouTube (click here to subscribe to the InvestorIntel Channel), Dev went on to say how Fission 3.0 has been able to stake a portfolio of near-surface high-grade uranium assets in close proximity to other major uranium discoveries. Led by the team that founded Fission Uranium Corp. (TSX: FCU | OTCQX: FCUUF) and made the Patterson Lake South (PLS) high-grade uranium discovery, Dev said that Fission 3.0 has significant insider ownership which aligns the management’s interest with that of the shareholders. Dev also highlighted the uranium supply deficit and the rising interest in the sector. He added, “…it is the only energy that is carbon-free, has no footprint yet can provide baseload power.”

To watch the full interview, click here

About Fission 3.0 Corp.

Fission 3.0 Corp. is a Canadian based resource company specializing in the strategic acquisition, exploration and development of uranium properties and is headquartered in Kelowna, British Columbia. Common Shares are listed on the TSX Venture Exchange under the symbol “FUU”.

To learn more about Fission 3.0 Corp., click here

Disclaimer: Fission 3.0 Corp. is an advertorial member of InvestorIntel Corp.

This interview, which was produced by InvestorIntel Corp. (IIC) does not contain, nor does it purport to contain, a summary of all the material information concerning the “Company” being interviewed. IIC offers no representations or warranties that any of the information contained in this interview is accurate or complete.

This presentation may contain“forward-looking statements” within the meaning of applicable Canadian securities legislation. Forward-looking statements are based on the opinions and assumptions of management of the Company as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein.

Any projections given are principally intended for use as objectives and are not intended, and should not be taken,  as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. Prospective investors are urged to review the Company’s profile on Sedar.com and to carry out independent investigations in order to determine their interest in investing in the Company.

If you have any questions surrounding the content of this interview, please email info@investorintel.com.




Appia Energy’s Tom Drivas on “one of the highest grade rare earth projects in the world”

In a recent InvestorIntel interview, Tracy Weslosky speaks with Tom Drivas, CEO and Director of Appia Energy Corp. (CSE: API | OTCQB: APAAF) about Appia’s recent news release on the largest exploration and drilling program for rare earths and gallium at their Alces Lake Project.

In this InvestorIntel interview, which may also be viewed on YouTube (click here to subscribe to the InvestorIntel Channel), Tom went on to say that all the rare earths in the Alces Lake Project are exclusively hosted in Monazite with rare earth grades up to 50% along with high-grade gallium making it “one of the highest grade rare earth projects in the world”. Providing an update on their uranium projects, Tom said that Appia has three major critical materials namely, rare earths, uranium and gallium.

To watch the full interview, click here

About Appia Energy Corp.

Appia is a Canadian publicly-listed company in the uranium and rare earth element sectors. The Company is currently focusing on delineating high-grade critical rare earth elements, gallium and uranium on the Alces Lake property, as well as exploring for high-grade uranium in the prolific Athabasca Basin on its Loranger, North Wollaston, and Eastside properties. The Company holds the surface rights to exploration for 65,601 hectares (162,104 acres) in Saskatchewan. The Company also has a 100% interest in 12,545 hectares (31,000 acres), with rare earth element and uranium deposits over five mineralized zones in the Elliot Lake Camp, Ontario.

To learn more about Appia Energy Corp., click here

Disclaimer: Appia Energy Corp. is an advertorial member of InvestorIntel Corp.

This interview, which was produced by InvestorIntel Corp. (IIC) does not contain, nor does it purport to contain, a summary of all the material information concerning the Company” being interviewed. IIC offers no representations or warranties that any of the information contained in this interview is accurate or complete. 

This presentation may contain “forward-looking statements” within the meaning of applicable Canadian securities legislation.  Forward-looking statements are based on the opinions and assumptions of management of the Company as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein.

Any projections given are principally intended for use as objectives and are not intended, and should not be taken,  as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. Prospective investors are urged to review the Company’s profile on Sedar.com and to carry out independent investigations in order to determine their interest in investing in the Company.

If you have any questions surrounding the content of this interview, please email info@investorintel.com.




Fission 3.0’s Experienced Management Team Targets Canada’s Athabasca Basin, the World’s Leading Source of High-Grade Uranium

Due to increasing demand for nuclear energy, nuclear reactor builds are at a 25 year high. In fact there are currently 440 nuclear reactors operating globally, with another 50 under construction, 100 planned and 300 proposed. All of these future reactors are going to need uranium.

Most experts are forecasting a structural uranium deficit this decade, due to rising uranium demand and years of stagnant supply response caused by the recent uranium bear market.

Global nuclear capacity looks likely to double before 2050 which will require lots more uranium

Source: Fission 3.0 investor presentation

If uranium prices continue to recover, as is widely expected, then junior uranium miners should potentially also benefit greatly. Taking it a step further any junior uranium miners with well located and high grade uranium assets stand to do the best. This leads to Canada’s Athabasca Basin. It is host to some of the most valuable uranium discoveries in history and has 10-20x higher uranium grades than the global average. Today’s I look at a uranium junior with a portfolio of 14 highly prospective properties in the Athabasca Basin.

The company is Fission 3.0 Corp. (TSXV: FUU | OTCQB: FISOF) (“Fission 3.0”). Fission 3.0 is a Canadian-based uranium project generator company with one of the uranium sector’s leading exploration teams and a strong portfolio of highly prospective properties in Canada’s Athabasca Basin, the world’s leading source of high-grade uranium.

Fission 3.0 projects are all in the exploration stage, which explains why the company’s stock is still on a market cap of only C$19.6M. The 14 projects are segmented into four main areas: Patterson Lake South (“PLS”), Key Lake Road, Beaverlodge, and NE Athabasca Basin.

The PLS area projects look for now to hold the greatest potential given its proximity to other significant uranium deposits in the region such as the award winning, high-grade, and near-surface Triple R uranium deposit found by Fission Uranium Corp. Fission 3.0 holds three projects totaling 92,718 ha in the PLS area, accessible via highway access.

The Key Lake Road area projects (45,109 ha) sit along the WollastonMudjaticTransition Zone in eastern Athabasca Basin. It is one of the most important trends of highgrade uranium projects in the world. Some of Fission 3.0’s NE Athabasca Basin projects (15,392 ha) are also along this trend.

The Beaverlodge area projects (68,889 ha) also look positive with ground prospecting at Beaver River making a new discovery of highgrade uranium (13.9% U3O8) and 2.27 g/t Au (2.27 g/t) (outcrop). The area is a historical major uranium producing district with 52 mines operating in the 1950’s and 1960′s.

Fission 3.0 has 14 uranium projects in four key areas across the Athabasca Basin

Source: Fission 3.0 investor presentation

Fission 3.0 management team

Fission’s management is headed up by Dev Randhawa as CEO & Chairman. Dev was part of the team that founded Fission Uranium and made the Patterson Lake South high-grade Triple R discovery. The same team also founded Fission Energy Corp., making the J-Zone high-grade discovery in the Athabasca Basin and building the Company into a TSX Venture 50 company. Dev has been awarded Finance Monthly ‘Dealmaker of the Year’, Northern Miner ‘Person of the Year’, and he founded Pacific Asia China Energy, which later sold for $34M.

Closing remarks

The uranium market is receiving renewed interest as the US government and others begin to recognize and support the sector. For investors wanting to get in early on a potential up and coming uranium junior such as Fission 3.0 now looks to be as good a time as ever. Owning 14 projects of significant size and well located in the high grade uranium region of the Athabasca Basin gives Fission 3.0 every chance of success.

A recent capital raise will help the company to continue exploration. Investors will need some patience and some risk tolerance but the rewards are also very attractive, given Fission 3.0 is only on a market cap of C$19.6M and has some great exploration assets and proven management.