Much to my chagrin, it appears this damn COVID virus is refusing to let us be. I guess one positive take-away is that we are learning about the Greek alphabet. I can’t say I was familiar with omicron prior to last Thursday, but all of a sudden it’s the most talked about Greek letter in the world. Along those lines it would appear we aren’t going to shed this virus anytime soon (pun intended), so we are going to have to adapt to it so we can get back to as normal a lifestyle as possible. In my opinion, an easy to administer, reliable rapid test could go a long way towards returning us to our normal day-to-day activities while still giving confidence to all those around us that they are in a safe environment. Obviously, it would have to be more convenient than the one where it seems like they are trying to swab brain tissue behind your eyes, because I know I certainly won’t be signing up to do that every day or two. But a simple saliva swab in the mouth, and 15 minutes later you’ve got the green light to do whatever, seems like a reasonable solution.

There are a lot of companies out there that are pursuing this holy grail of a reliable rapid test, but the one I want to talk about today is developing a saliva-based rapid screening test, for Coronavirus, derived from a bunch of other interesting applications for their technology. The company is Sona Nanotech Inc. (CSE: SONA | OTCQB: SNANF), and they have developed multiple proprietary methods for the manufacture of various types of gold nanoparticles and are experienced in the development of rapid, lateral flow assay, in-vitro, diagnostic tests. The Company is also involved in research and development into other potential applications for its proprietary technologies.

What makes Sona (the Hindi word for gold) unique is that it has patented, non-toxic, metallic gold nanorods (GNRs) which are small particles whose surface plasmon resonance (SPR) frequencies can be altered by modifying their length and width, giving them properties useful in a host of applications, including diagnostics, optical biomedical imaging, and photothermal therapies, to name a few. I recognize that’s a lot of science stuff but the key term in the last sentence to focus on is non-toxic. One of the major barriers in the application of GNR based materials is the presence of cetrimonium bromide (CTAB), a cytotoxin. After years of hard work, Sona was able to perfect the process and develop the ability to synthesize large volumes of high-quality gold nanorods free of CTAB. This opened the door to using GNRs as a drug delivery vehicle and for photothermal therapy.

If you check out the Sona Nanotech website there is some pretty fascinating stuff, even if I don’t understand a bunch of it. However, we’ll focus on the investment thesis for today. It should be somewhat obvious that a rapid COVID test is what is of greatest importance right now. On November 8^th the Company announced a U.S. partnership and preliminary evaluation results for its COVID-19 saliva test. Sona entered into a binding licensing agreement with U.S. FDA registered Arlington Scientific Inc. of Springville, Utah, to bring Sona’s rapid saliva COVID-19 test to market. The market was pretty excited about this news as the stock popped 87% the day after the press release, and that was before anyone was aware of the COVID omicron variant. If an FDA Emergency Use Authorization is granted, Arlington will coordinate manufacturing and distribution of the test in the U.S. exclusively on a profit-sharing basis. In other words, Arlington will make it and market it, meaning almost zero cost for Sona to move the product forward (Sona is on the hook for providing key biological materials for testing). This is a very important deal for a company that currently has no revenue and is pretty much focused on R&D.

There are plenty of other developments going on at Sona like a concussion test for mild traumatic brain injury that aims to detect a series of biomarkers enabling the screening for mild concussions, and a bovine tuberculosis test, which is being developed with a consortium of companies as part of a Canada/UK industrial research and development program. Both of which could be future sources of income for the Company but not likely on the scale of a rapid COVID test. Another interesting application of their technology is a possible advancement of radiation therapy in cancer cells by focusing on the treatment. Evidence suggests that GNRs could be more effective at killing tumors with less or no adverse reactions to healthy cells given that traditional methods of this type of treatment involve non-selective irradiation, damaging the normal tissue surrounding a tumor. Although maybe we’ll save the discussion of these applications for another day.

For now, Sona could be in the right place at the right time. After some initial missteps, they have fine-tuned their rapid, saliva, COVID-19 test just in time for the next variant of concern to come along. With just over 65 million shares outstanding they have a market cap of roughly C$28 million based on yesterday’s close. A near-term catalyst could prove to be a better shot in the arm for Sona Nanotech than any vaccine.

This week, Predictiv AI Inc. (TSXV: PAI) reported that its channel reseller in Quebec and Atlantic Canada, KleinCity Group, secured orders for Predictiv AI’s ThermalPass fever-detection system from hospitals and long-term care facilities in the province of Quebec.

KleinCity expects to close more ThermalPass sales based on the high volume of inbound calls and written requests it has recorded.

Last week, Predictiv AI announced that it received 28 orders for ThermalPass units with installations scheduled before the end of year. The majority of these units were sold to a Canadian provincial government, U.S. public schools, and several hospitals.

Michael Lende, President and CEO of Predictiv AI remarked, “We are very excited with the initial bookings as they represent verticals that are innately scalable. We are also cognizant and encouraged that these orders are formative in nature and have the potential to be significantly upsized.”

In conjunction with these recent sales and pending orders, production and assembly of ThermalPass units are ramping up, and the Company plans to expand manufacturing capacity to meet the increased demand.  Predictiv AI is well funded for growth after closing a $1.5 million financing in October.

Thermalpass to Help Food Bank Prioritize Health of its Residents

In the holiday spirit, Predictiv AI donated one of its ThermalPass fever detection systems to the Flemingdon Food Bank in Toronto, Canada.

As the demand for food banks continues to increase amid this current health crisis and busy holiday season, the ThermalPass unit will help keep patrons, staff, and volunteers, healthy and safe.

ThermalPass Fever Detection System

In May, Predictiv AI launched ThermalPass, a fever-detection system that instantly screens for higher than normal body temperatures that could be caused by influenza, pneumonia or other viruses, such as COVID-19.

ThermalPass enhances public safety by providing fast, touch-free scanning of people at entranceways of high-traffic, public locations to reduce the risk of spreading COVID-19 and other fever-bearing contagions.

By integrating 24 medical-grade, non-invasive thermal sensors onto a metal frame, and taking 1200 readings per second, each unit can process 60 people per minute. Its waterproof design is flexible for both indoor and outdoor uses.

A primary factor driving the growth of this market includes increasing demand for mass screening at airports, hospitals, malls, office buildings, pharmacies, schools, stadiums and supermarkets.

Other solutions that use thermal cameras, come with privacy issues and are more expensive, costing as much as US$15,000 compared with ThermalPass Portable (US$6,900) or ThermalPass Pro (US$7,300).

In addition to the upfront hardware sale of the product, Predictiv AI also books monthly recurring revenue (“MRR”) from maintenance & services fees, and monetizes the aggregated data.

Global Thermal Scanners Market is a Billion Dollar Market and Growing

According to a recent report by Reportlinker, the Global Thermal Scanners Market size is expected to reach $6.7 billion by 2025, rising at an annual growth rate of over 10%.

Even with the COVID-19 vaccines roll-out, the general public is poised to adopt new safety measures to protect society from current and future infectious diseases. For example, in the province of Ontario, under the province’s Stage 3 regulations, employers are required to conduct employee screening for COVID-19 whenever an employee comes to work.

A short-term catalyst for the market was a notice in July from the US government banning Chinese-based thermal camera solutions over privacy and national security issues. These cameras need to removed by August 2021.

Predictiv AI – Not a 1-Product Company

Based in Toronto, Canada, Predictiv AI is a strategic investor and operator of emerging technology companies with a focus on Internet of Things (“IoT”), artificial intelligence (“AI”) and Blockchain solutions.

The Company’s R&D division, AI Labs Inc., develops new products to solve real-world business problems. AI Labs jointly developed ThermalPass with Commersive Solutions, a developer of integrated, point-of-sale technologies for the retail market.

Predictiv AI’s Weather Telematics (“WTX”) subsidiary uses patented monitoring sensors to provide real-time, advanced AI-based, predictive road condition weather risk information to the insurance, logistics, fleet management and public safety sectors. In May, WTX released Alert Fleet, a weather-based software solution to enhance safety and reduce costs for the North American Fleet Management market.

Predictiv AI helps businesses and organizations make smarter decisions using AI, deep machine learning and data science.

With a market capitalization of less than $15 million, there is still plenty of upside to this Canadian high-tech company.

SOURCE:

In a new InvestorIntel interview Peter Clausi speaks with Steve Saviuk, CEO of Valeo Pharma Inc. (CSE: VPH | OTCQB: VPHIF), about receiving Health Canada’s approval for its anti-coagulant Redesca™ and the use of some its products in battling coronavirus.

“We are in the middle of a significant upswing and growth trajectory,” Steve told Peter, with Valeo’s stock up over 300% in 12 months. Founded in 2003, Valeo Pharma is a pharmaceutical company dedicated to the commercialization of innovative prescription products in Canada with a focus on neurodegenerative diseases, oncology and hospital specialty products.

Steve discusses Health Canada’s recent approval of Redesca™ and Redesca Hp™ low molecular weight heparin (LMWH) biosimilars, which belong to a class of anti-coagulant drugs very much in demand and are now increasingly used as a first line of defense tool in the fight against the symptoms of COVID-19. Steve added that the Canadian LMWH market is in excess of $200 million annually and the Valeo anticipates being able to capture a significant market share with its growing portfolio of hospital drug products.

As to future growth and valuation, Steve quoted Wayne Gretzky: “It’s not where the puck is, it’s where the puck is going, and it’s the same thing with valuation. You have to look at where we’re going to be in a year or two, and that’s what is truly exciting.”

To watch the full interview, click here.

Most investors know that the pharmaceutical industry is a huge and mostly very profitable industry. What they may not know is that it is highly competitive making it hard for new players to break into the sector. One way to do that is to have a specialty focus; another is to bring a new drug to market at the right time. Right now immune support products are a hot sector as coronavirus (COVID-19) continues to ravage the world. A

Valeo Pharma Inc. (CSE: VPH | OTCQB: VPHIF) (‘Valeo’) has a specialty pharmaceuticals focus and their newly launched immune support product HesperCo™ looks like being a possible winner as we all look to boost our immune systems to prevent or fight COVID-19. HesperCo™ is Valeo’s unique hesperidin formulation. Natural product hesperidin is a flavonoid with powerful antioxidant properties that help support the immune system.

In a September 2020 news release Valeo stated: “We have high expectations for HesperCo™, which will be launched nationally in the coming weeks, as the immune support it provides is needed in the current healthcare environment.” Since this press release HesperCo™ has been launched.

Valeo Pharma’s latest product HesperCo™ is an immune support medicine that may potentially prove useful in the fight against COVID-19

Source

Other new Valeo products that have been launched recently – Yondelis, Ametop Gel, Ethacrynate Sodium and soon Amikacin & Redesca

• Yondelis – An anti-neoplastic (anti-cancer) agent that aims to prevent, inhibit or halt the development of a neoplasm (cancerous growth). Clearly this is a hugely needed and important area.
  
• Ametop Gel – A topical analgesic used for local anaesthetic prior to venepuncture.
• Ethacrynate Sodium – A saluretic-diuretic agent that is useful to support Nephrotic Syndrome (a kidney disease that causes patients to pass too much protein in their urine). Commercialization has just begun in the U.S.
• Amikacin – A specialty hospital antibiotic. Valeo has recently received Health Canada approval with commercialization to start in the first half of 2021.
• Redesca and Redesca HP – Valeo has just announced yesterday that they received Health Canada approval for Redesca and Redesca HP (low molecular weight heparin biosimilars). Low molecular weight heparin is increasingly used to prevent serious COVID-19 complications such as thrombosis (blood clots) and pulmonary embolism. Valeo says that commercial launch of Redesca and Redesca HP will impact first half 2021 revenue and is forecast to achieve $30 million annual peak sales.

More about Valeo Pharma

Valeo’s strategy is to focus on specialty areas such as neurodegenerative diseases, oncology, and hospital specialty products. Valeo is focused on those therapeutic fields where a relatively small number of general practitioners or specialist physicians account for the majority of prescriptions written. This can be a more effective strategy to gain success, especially for smaller pharma companies.

Valeo Pharma is driven by the desire to become a leading Canadian focused specialty pharmaceutical company and to be the partner of choice for international companies wishing to enter the Canadian market.

Valeo had a productive Q3, 2020 with 4 new products added to their commercial pipeline. Q3 net revenues were C$1.5 million and YTD 2020 net revenues were C$5.3 million.

Valeo Pharma’s product portfolio and product pipeline

Source

Valeo Pharma’s revenue is forecast to grow very strongly through to 2022

Source: 4-traders

Closing remarks

Specialty pharma in the areas of infectious disease (think COVID-19), oncology (cancer), neuro-degenerative diseases (think nerve diseases), and hospital specialty products all look to be areas of strong future demand.

Valeo Pharma is focusing on these high growth specialty areas in Canada. As a result of past products and several recent new product launches Valeo’s revenue is forecast to increase sharply in the next 2 years. The current market cap is C$74 million.

ZEN is collaborating with partners to develop virucidal face masks and PPE

Back in May 2020 InvestorIntel wrote about the very exciting development of masks and other personal protective equipment (PPE) that not only protect the wearer, but actually kill viruses on contact. to help . Since then the development of  a “graphene virucidal ink face mask” and PPE has been progressing nicely in the fight against COVID-19.

In late July 2020 ZEN Graphene Solutions Ltd. (TSXV: ZEN) (“ZEN”) reported that research teams at a number of personal protective equipment (PPE) manufacturers are collaborating with ZEN to incorporate ZEN’s virus-killing graphene ink into commercial products, including masks, gloves, gowns and other clothing. This follows ZEN’s promising testing results from the University of Western Ontario’s ImPaKT Facility, biosafety Level 3 lab.

ZEN has synthesized a ‘silver nanoparticles functionalized graphene oxide ink’ that has been documented by previous researchers to kill earlier versions of coronavirus. Silver is well known to be a potential virucidal agent.

Photo: iStock

In July ZEN reported in a news release that the company “continues to optimize its proprietary formulation for dosage and delivery mechanism for highest antiviral impact. The next phase of testing is currently underway at the ImPaKT Facility and includes a preferred mask fabric, from one of our collaborators, coated in ZEN’s virucidal ink exposed to and tested against the COVID-19 virus.”

Dr. Francis Dubé, CEO of ZEN, commented that “Based on results so far and our discussions with the team at Western, we are quickly moving to integrate our material into commercial products with partners who wish to increase the level of COVID-19 protection their products currently offer.”

Given the world needs at least 3.5b N95 face masks to fight COVID-19, the potential demand for ZEN’s graphene based virucidal ink face mask could be enormous. If the new virucidal mask captured just 10% market share of the 3.5 billion masks needed that would mean manufacturing and selling ~350 million masks. Or even if just made mandatory for health care workers globally, the market would be very large, as there is an estimated 59 million health care workers worldwide. Each health care worker would need a number of masks per year. The revenue opportunities could be enormous if ZEN’s graphene based virucidal ink is licensed on a per unit basis. Added to this would be the potential for use in other PPE. For a small company such as ZEN the potential revenue upside could be highly significant.

Tests are still underway to improve and prove the effectiveness of the virucidal masks, but CEO Dubé’s public comments about integrating ZEN’s material into commercial products with partners indicates a positive outcome is looking increasingly possible.

Last week ZEN announced that it will “report shortly on significant progress being made in multiple programs, one of which has resulted in the preparation of a patent filing that is central to ZEN’s business plan.” Zen also announced receiving significant funding grants: “two NSERC Alliance COVID-19 project grants, a Mitacs Elevate Postdoctoral Fellowship grant, and two Mitacs Accelerate grants for a total of $355,000 to its university collaborators,” which increased ZEN’s total research and development budget for the next 12 months to over $1.4M.

Graphene’s potential

Graphene is a new wonder material with incredible potential to be commercialized in a huge number of products. These are as diverse as graphene coatings that can greatly improve corrosion resistance, increase strength, reduce friction and can be hydrophobic reducing ice formation (aerospace and aircraft industries). As a diesel/jet fuel additive it can improve fuel economy and reduces greenhouse emissions. It is also useful in electromagnetic shielding and electrostatic dissipation, desalinization membranes and low-energy dehumidification, heavy metal scavenging and removing industrial contamination, photovoltaics, displays & biomedical applications using graphene quantum dots, virucidal inks, as a material enhancement (clothes, tire strengthener, concrete additive), hydrogen storage and production, and advanced batteries. Samsung is developing an advanced graphene phone battery. Graphene is super lightweight and also strengthens aluminum, rubber, plastics and other materials, making its list of applications almost endless.

The graphene market is forecast to grow at a 39-45% CAGR this decade

Source: Company presentation

Closing remarks

In addition to its advanced application projects, ZEN owns a graphite mine and has commenced small scale graphene production from their facility in Canada, and has numerous other potential uses to commercialize their graphene product. At the current market cap of just C$31m the stock is not yet pricing in any chance of significant success in the virucidal mask and PPE market, or in the larger graphene market. This is good news for investors looking for underappreciated and early stage stocks. If ZEN is able to successfully commercialize its viricudal mask/PPE or other graphene products, it would be a game-changer.

The face mask sector is hot right now. Even China can’t make enough face masks to meet their own demand. As countries begin to ease the COVID-19 (coronavirus) lockdowns literally billions of people will require face masks. Many airlines are already making face masks mandatory, and this could soon spread to other forms of mass transport.

Even better than standard face masks are new high tech face masks designed to kill the virus, using antiviral nano-particles embedded inside the protective material.

Two companies are combining their expertise to produce new high tech face masks and other protective clothing that they hope will kill the virus. They are ZEN Graphene Solutions Ltd. (TSXV: ZEN) and Graphene Composites Ltd. (GC). They have teamed up to develop a COVID-19 virucidal graphene-based composite ink for face masks and other protective clothing.

An agent that kills viruses, a virucidal ink that can be embedded into all types of personal protective equipment (PPE) could have immense benefits for the world right now. Imagine owning a mask that not only blocks the virus but can kill it. The medical world will love it, as it will give them the much needed protection they deserve, as they battle on the front lines of this severe pandemic that has now infected over 3.7 million people, killing ~258,360.

The plan

ZEN has synthesized a ‘silver nanoparticles functionalized graphene oxide ink’ that has been documented by previous researchers to kill earlier versions of coronavirus. Silver is well known to be a potential virucidal agent. Testing will be conducted at Western University’s ImPaKT Facility Biosafety Level 3 lab in Ontario, Canada.

Once testing is completed (and assuming successful), the virucidal graphene ink would then be incorporated into fabrics to be included into masks and filters designed by GC.

The CEO of ZEN, Francis Dubé, stated:

“We are pleased to be collaborating with GC and be on the forefront of a new innovative technology that could contribute to combating the deadly COVID-19 virus. The development of this potential COVID-19 virucidal graphene ink is coming at a crucial time to provide effective PPE supplies for the safety of frontline workers and hospital staff.”

The CEO of GC, Sandy Chen, stated:

“Combining the deep nanomaterials expertise of GC and ZEN with a truly collaborative approach has enabled us to do a year’s worth of R&D in a matter of weeks. Quickly developing and deploying our virucidal/germicidal ink would make a significant difference in slowing the rate of infection – thus saving many lives.”

Competitors

Given the newness of the COVID-19 pandemic there is so far little competition when it comes to virucidal protective clothing using graphene. One Israeli company is reportedly using a virucidal embedded into masks that consists of zinc oxide and copper oxide nano-particles.

ZEN’s graphene has a huge range of potential uses

ZEN is already making great progress in the production of graphene with a huge range of potential uses such as: Tyre strengthener, aluminum/rubber/plastics enhancer, a cement additive/enhancer, diesel and jet fuel additive, graphene batteries, graphene based clothing and so on.

ZEN has unique graphite from which they make graphene

ZEN Graphene Solutions also have their own unique source of graphite at their Albany Graphite Project, which is highly suitable for graphene production. The unique Albany Graphite Project provides the Company with a potential competitive advantage in the graphene market as independent labs in Japan, UK, Israel, USA and Canada have demonstrated that ZEN’s Albany PureTM Graphite is an ideal precursor material which easily converts to graphene, using a variety of mechanical, chemical and electrochemical methods.

ZEN’s new graphene research and development facility at Guelph, Ontario, Canada

ZEN has recently opened their new graphene research and small scale production facility in Canada, with a goal of scaling up graphene production to meet consumer demand. Graphene product sales were launched in early March 2020. The research and engineering team will also be developing and testing custom functionalized graphene formulations as requested by industrial collaborators for product performance enhancement.

Source

Closing remarks

ZEN is one of the most innovate companies out there, with a focus on using graphene to disrupt and improve various industries. Their latest collaboration with Graphene Composites Ltd. is most exciting, as virucidal protective clothing can be a game changer right now in the fight against COVID-19.

Furthermore ZEN already has their own high quality Albany graphite source, and has started scaling up graphene production at their facility in Ontario Canada. This makes them a vertically integrated growing graphene producer, all for a market cap of just C$32 million.

There seems to be a misguided notion (with some) that isolation means we have more time to waste. Far from reality, I am certain that many of you, like me are looking at your inbox wondering where or how to wade into the depth of quality deals and opportunities upon us…

Would like to kick your morning coffee off with a special nod to our longstanding friends from Avalon Advanced Materials Inc. (TSX: AVL | OTCQB: AVLNF) whose $AVL soared 50% yesterday. We have been supporters of #Avalon since Don Bubar first did an interview with me in 2009 (with Jack Lifton) and introduced me to rare earths. And indeed, there is news flow in the rare earths a-n-d throughout the critical materials sector that is literally ricocheting from source-to-source online…

How to follow?

Jack Lifton, Clint Adam Smyth and I just launched the TechnologyMetals.com site to manage the influx of critical materials’ news (and experts) we are communicating with regularly. Jack’s interview with Dr. David Dreisinger on Search Minerals Inc. (TSXV: SMY) last week was purely outstanding (in my opinion) as he describes David as “the leading authority on solvent extraction process”. This is a hot topic that we touch on in our weekly update that we just started…click here to access a preview

And associated technologies relating to cleantech? We saw Exro Technologies Inc. (CSE: XRO | OTCQB: EXROF) stock move up 30% yesterday! Interviewing CEO Sue Ozdemir on how Exro makes “electric motors faster, stronger and greener” for InvestorIntel on Wednesday: we will get this up live as fast as we can!

Uranium continues to maintain a much-deserved interest, let me point you in the right direction for a quick update – Matt Bohlsen’s piece from last week titled, The DoE’s plan to rebuild the uranium sector and ‘pull America’s nuclear industrial base back from the brink of collapse’… reinforces the sustainability themes we are touting on the Technology Metals Show. Arranging interviews as we speak with Mark Chalmers of Energy Fuels Inc. (NYSE: UUUU | TSX: EFR) and Jeff Klenda of Ur-Energy Inc. (NYSE: URG | TSX: URE) as they “stand to be the major beneficiaries, especially given they started the whole S232 petition back in January 2018” you should see those live on InvestorIntel next week.

And yes, we are following the biotech and life sciences market. If you subscribe to our AI driven market updates on InvestorChannel.com – you can catch the 20 companies, we are following in the race for vaccinations…click here

Speaking of AI technology, we would like to ensure that you are aware of the news that was put out by Predictmedix Inc. (CSE: PMED | OTCQB: PMEDF) yesterday titled — Predictmedix Files Patent for Mass Screening for Infectious Diseases Such As #COVID19

And speaking on the war against the COVID-19, StageZero Life Sciences Ltd. (TSX: SZLS) put out the following news on April 20^th StageZero Life Sciences Initiates Testing for COVID-19 In the USA

Remember, click here to subscribe to the InvestorChannel for daily market updates on the Canadian, US and Hong Kong markets – and to follow InvestorIntel’s stock watchlist for Gold, Uranium, Rare Earths and of course, COVID-19…

“The number one advice would be to keep the financial markets open. The financial markets are playing a critical role in the response to the crisis. They are proving liquidity for people who need cash right now to able to sell their financial assets and turn it into cash to use things like meet payroll or their mortgage payment and things like that. They are providing the opportunity to people who want to step in and use this as a buying opportunity and put a floor on the prices right now. The other thing they are doing is that they are giving both investors and policymakers critical information in terms of price discovery.” States Dr. Michael Piwowar, Executive Director of the Milken Institute Center for Financial Markets, in an interview with InvestorIntel’s Tracy Weslosky.

Dr. Piwowar went on to say that though the markets saw some wild swings recently, it was good volatility and was evidence that the market is working. The market is providing critical information to policymakers to decide their response to the Coronavirus crisis – financial assistance or economic stimulus. The Federal Reserve along with the Treasury has stepped in the credit markets to provide the much-needed liquidity.

Dr. Piwowar also said that FasterCures Center at the Milken Institute is on the frontlines of what’s going on in the COVID-19 pandemic. The center is working very closely with a lot of the people who are developing vaccine for the disease.

Dr. Piwowar also provided an update on the Resilient Infrastructure Financing initiative of the Milken Institute. He said that there is a great need in the United States to improve infrastructure. The institute is working to promote public and private partnerships to fund and finance resilient community infrastructures to combat the disruption of weather-related disasters.

To access the complete interview, click here

Given the recent announcement of a US$1.5 billion (US$150 million pa for 10 years) uranium reserve to be allocated to US uranium producers, there has been quite a buzz around the uranium sector which is currently dominated by Energy Fuels.

Energy Fuels CEO Mark Chalmers, accompanied by several members of senior management, lead an excellent Company webcast update, with a special address on the impact of the coronavirus (COVID-19) on the critical materials sector on Friday morning. During this webcast, he provided an update on the Company, covering everything from the US uranium reserve to the Company’s FY 2019 results. During this webcast he identified the increasing prioritization by the by the U.S. government for a both U.S. sourced critical materials and the build-out of a North American rare earths supply chain. Below I touch on the key highlights.

Energy Fuels Inc. (NYSE: UUUU | TSX: EFR) is one of only three US uranium miners still in production, and has been the largest US uranium producer over the past 4 years. Energy Fuels has the largest uranium resource portfolio in the U.S. among producers, with an ability to rapidly scale up production if needed. Added to this Energy Fuels is a leading U.S. vanadium producer. There is also some potential for future rare earths processing at White Mesa Mill.

The White Mesa Mill is a strategic asset for Energy Fuels and the USA

Many don’t know, but the White Mesa Mill has produced about the same amount of uranium and vanadium over its lifetime to date, or about 45 million pounds of each. White Mesa Mill can also recycle alternate feed materials and materials from land clean ups.

Energy Fuels’ flagship White Mesa Mill produces both uranium and vanadium, with potential to add rare earths processing

Energy Fuels views on Russia

Russia has a long history of manipulating markets to gain a geopolitical advantage. If nothing changes the US could be dependent on Russia, China and its allies for uranium. Also at the end of 2020, the Russian Suspension Agreement (RSA) expires. This means Russia could potentially export even more uranium into the US market leading to a price war, as we recently have seen with oil. It would also potentially increase the US’s dependence on Russia for uranium after 2021.

Energy Fuels views on President Trump’s FY2021 budget provision for a U.S. uranium reserve of US$150 million pa

Energy Fuels is positive on the recent move that the US plans to support the US uranium producers. There are no details yet on how the US$150 million pa will be allocated but there is a very strong possibility that Energy Fuels will benefit, especially given they initiated the Section 232 Petition.

The Office of Nuclear Energy (NE) stated:

“The reserve is expected to support the operation of at least two U.S. uranium mines.”

There are currently only three or four uranium facilities operating in the U.S. right now that have the current capability to supply a U.S. uranium reserve. These include Energy Fuels’ White Mesa Mill in Utah and Energy Fuels’ Nichols Ranch ISR Facility in Wyoming.

Energy Fuels (blue) has been the largest US producer of uranium over the last 4 years

Energy Fuels approach with COVID-19

Energy Fuels is adopting the following procedures to support the COVID-19 battle:

• Eliminating travel and conference attendance for the time being.
• In these tough times with low uranium and vanadium prices, Energy Fuels is focusing on cost-cutting measures and maintaining balance sheet strength.
• Energy Fuels state that of very significant concern right now is that “Kazakhstan might have to shut down uranium production due to COVID-19″. This could lead to a uranium supply shock given Kazakhstan is the world’s largest uranium producing country.

Energy Fuels FY 2019 results and current activities

• Energy Fuels end 2019 cash and marketable securities, and inventory was at $40.5 million. Added to this is $19.5 million from 2020 activities. There is also US$16 million of convertible debt that matures on December 31, 2020 (payable in cash or shares at the Company’s option). Net assets are therefore over $40 million confirming a very strong balance sheet.
• Energy Fuels is currently pursuing additional cash flow opportunities in alternative feed materials, land cleanup, vanadium & rare earth elements. Energy Fuels is participating in a pilot-scale cleanup project for Navajo Nation, and is also supporting the cleanup of a private mine in Mexico.

Note: The White Mesa Mill is the only facility in U.S. that can recycle material into usable uranium.

Rare Earth Elements

Energy Fuels has been approached by several entities including the US Government to process certain uranium bearing rare earth elements at the White Mesa Mill. Energy Fuels stated:

“We can play a significant part in bringing rare earth element production back to the United States.”

Closing remarks

With the possibility that the world’s largest uranium producing country Kazakhstan may have to shut down uranium production due to COVID-19, there is the very real potential for a supply shock to hit the uranium market.

One of the very best ways for investors to gain exposure to the US uranium and vanadium sectors is to consider investing in Energy Fuels. They stand to benefit from any uranium supply shock/price increase, an announcement of uranium contracts to build the newly announced uranium reserve, or any further announcements to support US critical materials supply. Energy Fuels’ strong balance sheet and top tier assets allow them the flexibility to turn on and off uranium and vanadium production depending on market prices.

By investing in Energy Fuels investors gain exposure to the leading US producer of both uranium and vanadium, and also a potential future rare earths processor. To gain exposure to uranium, vanadium, and rare earths (potential for processing) in one company, located in the USA, is quite unique and exceptional.

“85% of rare earths come from China and China has been shut down. Rare earths are really in good shape and it is going to reflect well on potential exploration, development, production plays outside of China.” states Byron King in an interview with InvestorIntel’s Tracy Weslosky at PDAC 2020.

Byron continued, “I am a copper guy. I think what is built into the supply-demand situation right now…there is not enough out there for the demand that is coming down the line.” Byron also provided an update on the gold market. He said that gold is in great shape and the metal is making a comeback.

To access the complete interview, click here