Western Uranium and Vanadium stock doubles in December on no news
Ready and waiting…
That’s the best way to describe Western Uranium & Vanadium Corp. (CSE: WUC | OTCQX: WSTRF), a Colorado based uranium and vanadium conventional mining company focused on low cost near-term production of uranium and vanadium in the western United States. The market clearly sees the company that way as well, as the stock has doubled since early December on no apparent news.
Recall that the company is a ‘production ready’ miner with fully permitted mines in western Colorado and eastern Utah, USA. Their flagship project is the Sunday Mine Complex which consists of 221 unpatented claims on public lands covering approximately 3,800 acres. The complex contains 5 mines, including the Sunday mine, the Carnation mine, the Saint Jude mine, the West Sunday mine and the Topaz mine. The complex was most recently actively mined from 2007 to 2009.
During 2019, a mine re-opening project was implemented to identify high-grade vanadium ore, followed by bulk sampling and development drilling. Active mining was conducted and the extracted ore was stockpiled underground in the mines. Each of the mines included in the Sunday Mine Complex has its own separate mining permit and they are all currently in Temporary Cessation.
Due to historic mining activities, the complex has a robust infrastructure including all-weather roads, power from the regional electric grid, surface facility structures and readily accessible water from an underground aquifer. Combining this with the excellent ore grades, the Sunday Mine complex is expected to be a low-cost operation with minimal future maintenance capital required.
It is unfortunate that the coronavirus pandemic crippled the global economy, because in March 2020, President & CEO George Glasier stated that the complex was ready to go into production as the company had just finished building ore pads to move ore from underground to surface. The company’s preparatory activities have resulted in ore that is ready to sell and in addition to the potential sales of ore for uranium extraction, they were planning to send ore samples to potential vanadium customers around the world. Recall that vanadium is a critical material that provides exception increases in steel when added in small amounts and can also be mixed with aluminum and titanium for use in jet engines and high-speed airframes, among others.
As previously reported, the company has a substantial resource base in its mines. While the NI 43-101 reports are out-of-date, the total historic resources include approximately 53 million pounds of uranium resources and approximately 35 million pounds of historic vanadium resources. It is somewhat curious why these reports are not updated, but preserving cash in these uncertain times is always a good idea.
Looking forward, the price of uranium may have a nice lift ahead of it with the US government committed to spend $150 million per year ($1.5 billion over 10 years) to establish a US uranium reserve – presumably this will not change under a new US president. Importantly, the government commitment could support the operation of at least two US uranium mines, according to the US Department of Energy.
Whether this is driving the recent share price appreciation or there are other newsworthy items coming, a US domestic nuclear industry and energy independence is in everyone’s interest. Whether it is this company or others who are waiting for a sustained upward price movement, investors should watch this space!
Frederick Kozak is a Professional Engineer with extensive oil and gas, and international business experience and has more than 25 years involved in capital markets ... <Read more about Frederick Kozak>