Uranium prices just hit a 16-year high. All after one of the world’s biggest producers of uranium, Kazatomprom warned it’s likely to fall short of production targets over the next two years, “adding another risk to supply as demand for the nuclear fuel rebounds,” as noted by Bloomberg. All of which is serving as a strong catalyst for other uranium stocks, such as Stallion Uranium Corp. (TSXV: STUD) (OTCQB: STLNF), CanAlaska Uranium (TSXV: CVV) (OTCQX: CVVUF), Uranium Energy Corp. (NYSE: UEC), Energy Fuels Inc. (NYSE: UUUU) (TSX: EFR), and Cameco Corp. (NYSE: CCJ) (TSX: CCO).
Worse, according to the Kazakh uranium mining company on February 1, “It will produce only 80% of its permitted maximum uranium output allowed under Kazakh subsoil usage contracts, instead of the previously announced 90% level, due to difficulties procuring sufficient levels of sulfuric acid, a key ingredient in the company's in-situ uranium mining process,” as noted by S&PGlobal.com. “The company had warned in a Jan. 12 statement about the potential to not meet the previously indicated 90% level due to the sulfuric acid issue and "delays in completing construction works at newly developed [uranium] deposits."
Look at Stallion Uranium Corp. (TSXV: STUD) (OTCQB: STLNF).
Stallion Uranium Corp. just announced that it has acquired by low-cost staking nine new prospective uranium exploration dispositions in northern Saskatchewan. This increases Stallion’s total land package in the Southwestern Basin to 321,875 hectares (795,353 acres). The nine dispositions add an additional 19,361 hectares to Stallion’s 100% owned holdings in the Athabasca Basin.
“The recently completed geophysical survey over our Atha Energy JV project uncovered a significant number of previously unknown conductive corridors. Stallion, utilizing that data, was able to stake the extensions of high priority target areas and create a new high potential uranium project,” stated Drew Zimmerman, CEO. “The total land package we have been able to put together is unrivalled in the Southwestern Basin, not only in size, but also in the number of highly prospective target areas discovered. We believe that by deploying the latest exploration technologies to prioritize these targets, Stallion continues to significantly increase our probability of discovering the next significant uranium deposit needed to fuel a cleaner future.”
Darren Slugoski, Vice President Exploration, Canada, stated, “The new claims were strategically staked to cover anomalous geophysical signatures that look to extend from the adjacent ground held by Stallion’s JV project. These geophysical signatures are known to be associated with uranium mineralization in the basin, and Stallion was able to cover additional length of the high potential conductive corridors. Further expanding the number of tier one target areas under the company’s control.”
New Mineral Dispositions
Stallion staked an additional 19,361 hectares, of which 18,470 ha are contiguous to the company’s existing projects in the Southwestern Athabasca Basin. Another 891 ha are proximal to the companies Coffer project. These additional claims continue to increase Stallion’s land position in the area and cover more areas the company views as highly prospective. The addition of these claims expands the exploration land package directly east of the world class Arrow uranium deposit owned by NexGen Energy Ltd. See Figure 1 for the updated property mineral claim map location.
The newly staked claims, when combined with existing claims staked and announced January 17, 2024, allow for the creation of the 100% owned Upper Mirror River Project. The new project is 31,645 ha and covers extensions of target areas found from the recent Mobile MT survey completed over the company’s Atha Energy JV project announced on February 21, 2024.
The new project hasn’t had any advanced exploration and or even an effective regional geophysical survey. The Company believes it has the potential to host several kilometre-scale under-explored prospective zones as seen in the recently received data. Stallion will look to follow its roadmap to discovery by implementing state of the art geophysical surveys to further advance the most compelling target areas. The exploration will focus on areas with magnetic lows and conductive geophysical signatures which have been known to correlate with uranium mineralization.
Other related developments from around the markets include:
CanAlaska Uranium just reported that drillhole WMA082-4 has intersected 13.75% eU3O8 over 16.8 metres, including 40.30% eU3O8 over 4.7 metres and 13.54% eU3O8 over 2.4 metres at the Pike Zone as part of the ongoing winter exploration program on the West McArthur Joint Venture project in the eastern Athabasca Basin. The main objectives of the 2024 drill program are continued expansion of the Pike Zone discovery and along strike unconformity testing to the northeast and southwest. The West McArthur project, a Joint Venture with Cameco Corporation, is operated by CanAlaska that holds an 83.35% ownership in the Project (Figure 1). CanAlaska is sole-funding the 2024 West McArthur program, further increasing its majority ownership in the Project.
Uranium Energy Corp. reported drill results from its Roughrider Project located in Northern Saskatchewan, Canada. Both exploration and metallurgical sample drilling have been successful at intersecting uranium mineralization. Exploration drilling extends potential of East Zone deposit: UEC commenced a drill program at Roughrider in November 2023 with the dual purpose of exploring for additional resources on the property and for collecting metallurgical samples in the existing resource areas to support future economic studies. Discovery of new high-grade vein hosted mineralization in hole RR-889 grading 6.29% eU3O8 over 2.9 metres ~25 m west of the East Zone deposit: The mineralization is consistent with the grades and thicknesses of the East Zone and provides targets for resource expansion. Metallurgical drill program at Roughrider completed: UEC has completed four metallurgical holes that intersected grades and thicknesses of uranium mineralization consistent with the resource models of the three zones, the best result being hole RR-879, drilled through the East Zone, which graded 3.16% eU3O8 over 43.4 m with sub-intervals grading 4.05% eU3O8 over 12.6 m and 3.81% eU3O8 over 21.6 m. Roughrider next steps: UEC plans to drill an additional 20 holes comprising about 9,000 m this winter to identify new areas of uranium mineralization. The current resource estimate includes 27.8 million lb U3O8 comprising 389,000 tonnes grading 3.25% U3O8 in the Indicated category and 36.0 million lb U3O8 comprising 359,000 tonnes grading 4.55% U3O8 in the Inferred category.
Energy Fuels Inc.’s President and CEO, Mark S. Chambers recently noted, “"In 2023, Energy Fuels joined an exclusive club. With nearly $100 million in net income, we became one of the only profitable non-state-owned uranium mining companies in the world. There were two factors that contributed to our profitability: profitable uranium sales that captured the recent sharp rise in uranium prices and the sale of our non-core Alta Mesa project. The Alta Mesa sale was important, because it provided the Company with the funds needed to increase our uranium production and strategically diversify into the REE business. Keep in mind that while net income was less than Alta Mesa proceeds, this was by design, as we are investing heavily in growth to become a sustainably profitable, high-margin U.S. critical minerals company."
Chalmers continued, "Our nimble business plan enabled us to capture opportunities in the uranium market as prices surged beginning in late-2023. During 2023, we sold 560,000 pounds of uranium for about $60 per pound for total gross profits of $17.96 million and a 54% gross margin. However, uranium prices have risen significantly since then, and in Q1-2024, we intend to sell approximately 300,000 pounds of uranium under long-term contracts and on the spot market at an expected weighted average sales price of $84.38 per pound and at substantially higher gross margins. As long as market prices are strong, we will continue to selectively capitalize on spot market sales opportunities as we ramp up our production, in ways that are unique to our Company, in 2024 and beyond, and with limited capital.”
Cameco’s President and CEO Tim Gitzel just noted, “Our 2023 financial performance benefitted from higher sales volumes and realized prices in our uranium and fuel services segments. Our net earnings, adjusted net earnings, and cash from operations all more than doubled compared to 2022, with adjusted EBITDA up 93%. In 2024, we expect strong financial performance as we begin to realize the benefits from our investment in Westinghouse. We plan to continue to transition to our tier-one cost structure and make the capital and other expenditures we believe are necessary to position the company for continued sustainable growth. Growth that will be sought in the same manner as we approach all aspects of our business; strategic, deliberate, disciplined, and with a focus on generating full-cycle value. Heightened geopolitical uncertainty, global production shortfalls, and transportation challenges in 2023 further highlighted the growing security of supply risk at a time when we believe the demand outlook is stronger and more durable than ever. The benefits of nuclear power have come clearly into focus, with 28 countries around the world declaring support for the tripling of capacity to help achieve global net-zero greenhouse gas emissions by 2050.”
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