Western Uranium Gets a Head Start With Superior Technology
Time and again we have seen struggling juniors pull through some seriously hard times on the back of a piece of innovative technology. From my perspective, it seems to be the number one reason that a company can keep costs down while waiting for the inevitable boom period. Western Uranium Corporation (CSE: WUC | OTCQX: WSTRF) (“Western Uranium”) are currently sitting on the second largest uranium resource in the United States (first place goes to another of CEO, George Glasier’s companies), and having acquired these sites when prices were in the dumps, the reversing trend that began at the end of 2016 could not have come at a better time.
What’s more, the company has arrived at a technology that allows them to produce uranium concentrate from sandstone based ore at a fraction of the expected cost. This is a significant bonus, as although the value of uranium is on the up, the climb is likely to be slow. Western Uranium have given themselves a serious head start by rendering their product cost-effective long before anyone else’s. Entering the market in the next few years would allow them to arrive at a solid number of long-term contracts before others have even gotten out the geiger counters.
Even better than this, the company’s ablation technology, which removes the sandstone deposits surrounding grains of uranium, can be applied to a multitude of materials. The tech has already been shown to work on uranium and vanadium with great efficacy, and has also proven effective with zinc. This gives the company the opportunity to process ore from other operations as their technology is already patented, and since extracting minerals from hard-rock resources is often the most expensive mining method, I expect many other juniors will be knocking on George Glasier’s door this year.
But returning to vanadium for a second, the steel-making metal is making a serious comeback right now, and Western Uranium’s Sunday Mine Complex (SMC) has been shown to host significant quantities of my favourite metal. The SMC really is a fantastic site, containing a combined (measured, indicated & inferred) resource of almost 3-million-pounds of uranium and a staggering 17.5-million-pounds of vanadium, although the company does hold an estimated total of 90,000,000 pounds of uranium deposited throughout the rest of its projects.
In December 2015, Western Uranium entered into a Uranium Concentrates Supply Agreement with a Top 3 U.S. Energy Utility for uranium delivery commencing in 2018. Management are extremely experienced in contract development and so sourcing further business should be of very little concern. Production is expected to commence at the Sunday Mine Complex first due to its remarkably low CAPEX borne of existing infrastructure and permitting already being in place. As soon as the product is profitable, these guys are ready to roll.
There are very few near-term producers in the US with any volume worth shouting about, and many operators with decent output potential are located in unstable jurisdictions that experience constant upheaval and bureaucratic nightmares. Having such significant resources in the United States, and a management team as renowned as the people at Western Uranium, I have a great deal of confidence that this is a perfectly timed entry point for the company to ride a very long-term uranium recovery.