Uranium projects merged in Australia; U.S. to try extracting uranium from phosphate; Snapshot of shale’s impact
The Australian uranium industry story is one of two halves: there are plenty of junior explorers suffering with share prices in the range of a few cents — and some even as low as 0.1c. Then there are the others who are carrying on in the knowledge that the turn will come.
Now Australian and Canadian players have joined forces. Toronto-listed Mega Uranium (TSX:MGA) will take a 28% stake in Toro Energy (ASX:TOE) through vending the Lake Maitland project into the Australian company. Toro saw only a minor gain on the news and its 9.2c share price must be disappointing for a junior with a ready-to-go uranium project.
But it would seem both companies are positioning for the future. We just need a triggering piece of news — whether it’s from the restart of Japanese reactors or the confirmation that Russia is not releasing any more converted weapons-grade uranium.
The spot price rose $1.25/lb last week on news that a new institutional buyer was looking for about 450 tonnes of yellowcake and two U.S. utilities were in market for about 180 tonnes.
Toro Energy now has its own Wiluna project in Western Australia, for which it has received state government approvals, and sees the Lake Maitland acquisition as a means of extending the life of Wiluna once processing equipment is operating there. The effective merging of the two projects means that Toro gets a 42% boost in available uranium resources to 34,500 contained tonnes. It also raises the overall grade of the combined resource, with Lake Maitland’s deposit containing 6.4 million tonnes at 881 parts per million.
Importantly, it brings with it some potential partners. An option is held over 35% of Lake Maitland by Itochu Minerals and JAURD, a company set up by three Japanese utilities (Kansai Electric, Kyushu Electric and Shikoku Electric) to acquire Australian uranium.
Get our daily investorintel update
Lake Maitland is no new discovery. It was first identified in 1967 and, until the uranium price collapsed in the 1980s, five different companies explored the area. An Australian junior, Redport, revived the project in 2005 and was then taken over by Mega Uranium.
Meanwhile, another junior is looking for a new partner after French nuclear giant Areva withdrew from the large Haggan deposit in Sweden. Aura Energy (ASX:AEE) has 389,000 contained tonnes at the project and has developed a new bioleaching system to overcome the grade problems. Aura also has the Reguibat project in Mauritania with an inferred resource of 21,800 tonnes.
For just 0.1c a share you can pick up stock in Blaze International (ASX:BLZ). This company owns the Yeelirrie Valley project in Western Australia — the key piece of information here is that the ground surrounds the large Yeelirrie project bought by Cameco (TSX:CCO) last year from BHP Billiton, and which is located just 70km from Toro’s planned Wiluna mine.
And here’s something your correspondent picked up last week. A reliable source tells me that one high profile North American mining figure was informed when in China that the country has plans to build many more times the number of nuclear reactors (over time) than they have publicly stated, and that the Chinese are greatly concerned about the fact that asthma is becoming a serious problem among children — and nuclear generation is seen as a key weapon in the fight for better air quality.
PHOSPHATE and URANIUM: Some 140 million tonnes a year of phosphate is produced around the world and there’s around 20 million tonnes of contained uranium in this rock. Problem is that this uranium is largely not being recovered.
The PhosEnergy process, developed by an Australia junior, is claimed to recover about 92% of the uranium from phosphate rock.
Cameco has bought the story and is putting up $12.5 million to push it. Now Cameco and the Australian junior Uranium Equities (ASX:UEQ) have done a deal with an unnamed U.S. fertilizer producer to assess the commercial viability of applying the PhosEnergy process.
OIL and GAS: On Thursday I reported on an assessment of shale oil and gas that indicates that production outside North America will be a longer time coming than many think.
Now the commodity analysts at ANZ Bank (the ANZ stands for Australia and New Zealand) have summarised what they think are the main points about shale. They include:
1. The shale boom will drive the U.S. economy to energy self-sufficiency by 2030.
2. The U.S. will be the world’s largest oil producer by 2020, its 11 million barrels a day allowing it to overtake both Saudi Arabia and Russia.
3. Low U.S. gas prices have already triggered $95 billion new American capital projects (the main winners being the petrochemical and fertilizer sectors).
4. By 2016 the U.S. will be a third largest exporter after Australia and Qatar.
5. China will contribute the largest share in gas demand by 2030, China’s demand increasing by 200% over the next 15 years.
6. That increase will require new major gas pipelines from Russia and South-east Asia.
InvestorIntel is a trusted source of reliable information at the forefront of emerging markets that brings investment opportunities to discerning investors.