IsoEnergy CEO Craig Parry joined the Investing News Network at VRIC to discuss the state of the global uranium market, the nuclear energy sector and the potential for further nuclear energy development to drive uranium demand.
IsoEnergy (TSXV:ISO,OTCQX:ISENF) CEO Craig Parry joined the Investing News Network at the Vancouver Resource Investment Conference to discuss the state of the global uranium market, the nuclear energy sector and the potential for further nuclear energy development to drive the uranium demand.
IsoEnergy owns 15 properties across the eastern Athabasca Basin, including Larocque East, the home of the newly discovered Hurricane zone, which consists of 20 mineral claims totaling 8,371 hectares. The company recently intersected strong radioactivity at the Hurricane uranium zone with its first drill hole of its winter program, allowing the company to extend the zone to the west.
Moving forward, IsoEnergy intends to continue the exploration of Larocque East around the Hurricane zone footprint. According to Parry, the company intends to operate two drill rigs on the property in order to advance the project forward without wasting capital. Based on the drilling planned for 2020, Parry expects IsoEnergy to be one of the most active exploration companies in the uranium space this year.
Below is a transcript of our interview with IsoEnergy CEO Craig Parry. It has been edited for clarity and brevity.
Investing News Network: What is your company, what is your name, what is your symbol and what market can we find you on?
IsoEnergy CEO Craig Parry:: We’re IsoEnergy, TSX-V listed, and ISO is the ticker. We’re a spin-out of NexGen Energy, a uranium exploration company.
INN: Uranium, that is your metal.
CP: It is our metal; it’s the new green energy metal. It’s the metal that the world needs at the moment if we’re moving towards a low carbon environment.
INN: Where are we at right at the moment as far as the global demand for uranium?
CP: The Fukushima flooding of that reactor of course was a problem, but the bigger problem for the industry was Kazatomprom bringing on a huge amount of production and really flooding the market. Since then, they’ve been in the process of cutting their production over the last couple of years. The supply-demand balance there now is in an extraordinary situation. You never see this in other metals. The global demand for uranium today is about 190 million pounds per annum and supply is about 90 to 100 million pounds per annum, so it’s in a deep supply deficit and as we work through those stockpiles over the next year or two, we expect the price will go up dramatically off that supply imbalance.
INN: Where are we sitting at price-wise at the moment?
CP: Well, we’re sitting at about US$24.50 to US$25 per pound, which is up from a bottom two years ago of about US$17 or US$18 per pound. If we see US$30 per pound, which we really expect in the next few months, then we’ll be in a serious bull market.
INN: What are the factors at play that you think will help to see that kind of growth?
CP: Of course, Kazatomprom cut production. The second-biggest producer in the world, Canada’s very own Cameco (TSX:CCO,NYSE:CCJ), closed the McArthur River mine back in 2018. That was the world’s biggest mine producing with about 24 million pounds per annum, representing roughly 13 percent of global supply. They closed that mine in 2018 and they have been going into the market and buying product for their long-term contracts for that mine, so they’ve been heavily in the market. They’ve been on a bit of a hiatus of buying over the last six months, but they are set to resume buying pretty seriously over the coming month. So we think that will put pretty serious upward price pressure on the uranium price.
INN: What do you think the demand in the US is going to be like as we move forward?
CP: The US is the biggest customer for uranium; they buy about 50 million pounds per annum, so nearly a quarter of global supply or global demand comes out of the US. President Donald Trump is pushing to go nuclear as it were and increase their reactor build. We’ve seen very high-cost production out of the US cut back dramatically, so we think all of that product going into the US should be coming out of Canada and we’ll see that continue to grow pretty strongly over the next few years and that’s where we’d like to position ourselves, to sell to the North American market.
As I said, we’re a spin-out of NexGen Energy; we got a very big deposit there at the Arrow Deposit. That’s set to be one of the world’s biggest supplies when it comes on stream in four or five years’ time. IsoEnergy would like to piggyback off that as well — we’ve made a discovery there at the Hurricane Deposit on our Larocque East property. We’re in the earliest stages of that discovery, we’re drilling it out and we will kick off our third drilling program there in the next couple of days. It’s turning into something of a significant discovery. So in the next five to 10 years we’d love to see that project come online and supply the US market as well.
INN: Where are you at as far as development is concerned? What are the prospects moving forward?
CP: We spun out all of our eastern Athabasca licenses that were in NexGen back in 2016, and then we set about accumulating other projects in the eastern Athabasca Basin. Of course, the eastern Athabasca is the home of the highest-grade uranium deposits in the world. The two biggest mines in the world are there — Cameco’s McArthur River and Cigar Lake — so it’s a tremendously prospective place. We’ve been there exploring for three years on those properties. We acquired a property from Cameco back about 18 months ago called the Larocque East property, which we bought for the princely sum of C$300,000. We had a drill rig on the ground six weeks later and we announced the discovery two weeks after that. So that’s what we’ve been focused on, our Hurricane discovery. We’re just sitting there and drilling that out as we speak.
INN: What’s the long term plan for you in the development of any of these properties?
CP: Good question. We certainly see ourselves as developers; that’s what we’ve done all of our careers. If we’ve got a great deposit there we want to be there for a long time, we want to have grandkids to be getting the dividends of the production we get, so our objective is to build projects. We’re doing that at NexGen, where I’m still an advisor. Leigh Curyer, the CEO of NexGen, is our chairman at Iso, so they’re building that project and we’d love to follow in their footsteps. We’re at an early stage. We’ve been doing two drill programs so far, we haven’t got a resource yet, but we’re moving towards that pretty quickly and we’d love to prove up a resource in the next year or so.
INN: How important is it for your team to be able to lean on NexGen for help?
CP: Of course, it’s been hard to raise money and raise capital for uranium projects over the last five or six years. Having that relationship with NextGen has been all-important. We raised C$7 million in December of which NexGen put in C$2.9 million, so we have a very supportive major shareholder.
They have faith in that project so that’s crucial to what we’re doing. This year we will probably be the third or fourth most active explorer in the uranium space globally because we can raise the capital to do that. Having access to the broader NexGen group is important, but we’ve got a fantastic team ourselves. Our Vice President of Exploration is a man called Steve Blower. Steve actually joined us at NexGen for a period of time, but prior to that, he was the head of exploration for Denison Mines (TSX:DML,NYSEAMERICAN:DNN) and he led the team that discovered the Gryphon part of the Wheeler River ore body. Steve now has two discoveries under his belt in eastern Athabasca so our team’s track record is second to none.
INN: What do you do as a company to ensure that you can get from here to when that market actually hits?
CP: I guess we are in an advantageous position. We’ve got a discovery and we’re the only company globally with a new high-grade discovery so we’ve got a lot of eyes on us at the moment, and we can raise money. So we’re moving forward, not too aggressively but certainly advancing the project in a solid way is crucial.
A lot of our competitors are sitting on their assets at the moment, not doing much and conserving capital, but we don’t do that. We want to push ahead with the projects. The last couple of drill campaigns we’ve done were with one drill rig on the ground. This current campaign that we’re kicking off in the next few days will have two rigs on the ground, but we’re being very careful about that. We’re only spending money in a way that advances the project solidly. It remains pretty challenging to find capital for your own so you got to be a bit careful about how you do that.
Over the next year we should move into a more bullish phase of the market, but if you look at five or six years, all of the major consumers and customers, particularly those guys in the US, all of their long term contracts come off over that time frame, so they’re completely uncovered. So, the demand profile is really solid and it’ll be interesting to see where they want to secure that supply from. I suppose they’ve been securing product in the spot market pretty well over the last couple of days, but we can see that drying up pretty quickly over that time frame, so it’s a good story over the next year to two years, but look five or six years away and we’ll be in a very bullish market then.
INN: With the number of new power plants coming online, do you expect global demand to increase?
CP: It is, it is. China is commissioning a new reactor every eight weeks, the Middle East is looking at building reactors and Russia is currently building 26 new reactors as we speak. So the demand side looks very, very good.
INN: Did you hear Patrick Moore speaking yesterday? He has become a big proponent of nuclear energy.
CP: Yes, absolutely, Patrick is a great champion for the industry. I think the green movement is starting to recognize this is the only true base load source of low carbon energy. Certainly governments are recognizing that. I’m an Aussie, I live here in Vancouver now, but for the first time ever the Australian government and people in Australia are actually having a serious conversation about nuclear energy, so things are changing for the positive.
INN: Thanks for coming in and sharing this with us.
This interview is sponsored by IsoEnergy (TSXV:ISO,OTCQX:ISENF). This interview provides information that was sourced by the Investing News Network (INN) and approved by IsoEnergy in order to help investors learn more about the company. IsoEnergy is a client of INN. The company’s campaign fees pay for INN to create and update this interview.
INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.
The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with IsoEnergy and seek advice from a qualified investment advisor.
This interview may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, receipt of property titles, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The issuer relies upon litigation protection for forward-looking statements. Investing in companies comes with uncertainties as market values can fluctuate.