Azincourt Energy President, CEO and Director Alex Klenman expands on the progress his company has made in Canada’s Athabasca Basin.
In the interview below, Klenman explains why uranium is essential to the green energy industry. Azincourt is a resource exploration and development company building a collection of uranium and lithium projects for the green energy sector. The company currently holds interests in two prospective uranium projects in Northern Canada’s Athabasca Basin: East Preston and Patterson Lake North. According to the World Nuclear Association, 25 percent of the world’s energy supply will come from nuclear power plants by the year 2050. Azincourt Energy hopes to serve this growing market by providing the high-grade uranium needed for these reactors.
Azincourt also has exposure to the growing lithium market. In 2018, the company signed an option agreement to acquire three prospective uranium-lithium projects in Southeastern Peru. The projects cover a total area of 7,400 hectares of prospective exploration targets for uranium and lithium on the Picotani Plateau. In addition to its Peruvian projects, Azincourt currently has an active joint venture with New Age Metals (TSXV:NAM) for 100 percent interests in eight lithium projects across Manitoba.
Below is a transcript of our interview with Azincourt CEO Alex Klenman. It has been edited for clarity and brevity.
Investing News Network: Joining me now is Alex Klenman of Azincourt. Before we get started, what’s your symbol? What exchange are you in?
Azincourt CEO Alex Klenman: We are on the TSX Venture and the symbol is AAZ, or AA-zed as my Canadian friends like to say.
INN: We’ve had this conversation before, but I think that it’s worth going back and talking about Azincourt. Primarily you’re focused on uranium?
INN: You also have some interesting news right now. Let’s start with the news and then build our way backwards.
AK: Absolutely. We’re partnered with two companies in the Athabasca Basin, Clean Commodities (TSXV:CLE) and Skyharbour Resources (TSXV:SYH,OTCQB:SYHBF). We’ve got a 25,000 hectare project called the East Preston project. It’s in the heart of Western Athabasca and we’re drilling. It’s exciting for us. We hope to get a 2,500 meter drill program done through March, and we will see where it goes from there. We’re just starting to scratch the surface of a big project.
INN: What happened? All of a sudden you’re moving up and drilling is underway. You’ve had a few developments here.
AK: Yes. Appropriate funding. That’s the easy way to say it. A lot of juniors can get ahead of the horse and announce drill programs or start a drill program before they’re actually ready to do it. We wanted to make sure we were fully funded on that side. We are now; we’ve got some big partners in the deals, so we’re excited to get the drill started.
INN: Can you share who your partners are?
AK: Sort of. L2 out of Brazil put some money in the deal. I say sort of because I hate to think that they think that we’re going to leverage their participation, but it certainly helps to have a large partner or a large equity holder like that.
INN: It does for a couple of reasons. It gives you cash, but it also validates what you have been saying.
AK: Exactly. Large funds don’t get involved in small caps all that easily. They have to believe in the fundamentals of the project. Obviously, we know where we are and that the data to date is strong and it’s real.
INN: Let’s talk a little bit about uranium. What is the market potential?
AK: The uranium sector has woken up in the last year. There was a 40 percent increase in the spot price in 2018. We’re kind of stagnant a little bit here as 2019 begins. It’s a question of when the burst is going to come. I don’t think anybody believes at this point that it’s not going to come, but there are many opinions as to when it will come. Already, there are a lot of people fundamentally behind it, but to get the sentiment into the sector we’re going to need a catalyst like a US$30 spot price.
INN: Let’s take a look at that market. There are 550 plus nuclear power plants in operation now. There are another 71 being built and another 50 or 60 in the pipeline behind that. It speaks well for it as a source of energy that people are wanting to purchase.
AK: Absolutely, it’s not going anywhere. Nuclear energy is part of the future. It’s been a part of the past. We know it’s going to continue and to move that way. It’s a clean way to generate electricity and power. There are standard concerns that go along with it after Fukushima. I mean that’s a black swan event. It gets a lot of press; it was a disaster. But these things are getting safer. They’re getting smaller. They’re getting more self-contained. Technology is trending the right way and those things are few and far between.
INN: What you said about Fukushima, I understand it never should have been in operation at that point.
AK: Correct. There’s a lot to talk about.
INN: We’re changing the way we think about uranium as a fundamental part of green technology. With the demand for electricity continuing to rise, uranium is going to play an important role.
AK: It is, and, like you mentioned, on a global scale. India, China, Europe, United States, Canada, North America, South America, it’s everywhere. The demand is uranium. Uranium explorers like Azincourt can carve themselves a place by making discoveries, by bringing a large resource to market. There’s plenty of room for that. Really the bear market on the uranium sector over the last decade, or since Fukushima, has had a fundamental effect on that. There’s just not enough companies anymore out in the space.
It’s consolidated to the point where there’s really just two dozen or three dozen companies operating. It’s sort of a ground-floor opportunity for small companies like Azincourt.
INN: When we think about the future, we have a tendency to look across the Pacific to China, Asia and of course a little further into India. Let’s not forget the United States.
AK: There’s some legislation on the US side that’s working in favor or against, but we’re not dependent on the US market in any way shape or form. It’s a global thing and really there are major companies in Canada who operate here who are set up well for what’s to come.
INN: So positive news out of Athabasca, but you’re also in Peru. Let’s talk about your project in Peru.
AK: We’ve grabbed something called the Escalera group. It’s about 7,500 hectares in the Picotani Plateau, which is a volcanic area with a polymetallic feel to it. There are a lot of different types of deposits, different metals and things up there. We grabbed the property primarily on some historical results and sampling results. We did a sampling program last fall and it came back fantastic. We’ve got uranium at surface. We’re going to continue to see what we have there. It’s nice to get a decent-sized land package at what we think is the beginning of a bull market. At some point, it will turn to bull phase, it will be nice to have that package in our back pocket.
INN: Let’s also talk about Peru as a mining jurisdiction. You think South America, Chile, maybe Argentina. But mining has been core to the economy in Peru for a couple of hundred years.
AK: Like I said, a mineral-rich country. There are challenges in any environment globally. Forces for and forces against, wherever you go. The Peruvian government is behind the mining sector. There is some navigation to be done on the ground in any case, but we’re happy to be there and we’ve got lots of contacts and we’re moving forward.
INN: I also understand that you’re looking at lithium. For anybody who might be considering you as an investment vehicle, what other opportunities are you addressing within the green economy?
AK: Well, we expanded the company in 2018 by including lithium in our project base. It’s been a challenge to get drills going on our properties in Manitoba, but the numbers are there. The projects have tons of merits. We’re pleased to be in that space. We’re looking for other lithium assets to add. Part of our corporate mission is clean energy and clean power, so we’re open. We’re looking and we’ll continue to add what we think is reasonable to add.
INN: Lithium is an interesting market to be in. If we look between 2016 and 2018, the price for lithium doubled. The expectation for the demand for lithium over the next nine or 10 years will triple the requirement for lithium. We’re moving more and more into electric vehicles in addition to every other battery-powered device that we have.
AK: Right, battery grid technology and so forth. What really happened in 2018 was basically a bull run, a manic lithium market. At the end of the first quarter, Morgan Stanley (NYSE:MS) out of the US issued a report calling for a glut in supply. It basically killed the lithium market overnight. Whether or not there’s any merit to the report is a matter of debate. But we see that lithium is coming back. The price is strong. Demand will be there long term, we know that. Getting appropriate supply to market is a whole other challenge. It’s somewhat new. There are a lot of speed bumps along the way for a lot of people, a lot of companies, but we intend to keep our foot in that lithium market.
INN: For people who do not have a history with Azincourt, tell us a little bit about the team. If I’m putting my money with you, I want to know who I’m giving my money to.
AK: Really the most important people behind the company is our board of directors, specifically Ted O’Connor, who is our resident geologist, and Paul Reynolds as well. But Ted spent 17 years with Cameco (TSX:CCO,NYSE:CCJ) in Saskatchewan. He was recently the president and COO of Plateau Energy Metals (TSXV:PLU,OTC:PLUUF) in Peru. He oversaw the market cap explosion in PLU. He knows the Athabasca uranium space as well, if not better, than anybody. He’s the guy behind the target decisions that we’ve made for our first real program at East Preston, and we rely heavily on Ted’s knowledge. He’s a special guy in the uranium space, and we’re happy to have him.
INN: I know that you just told us your news. Next steps, now, over the next couple months. What should we be looking for?
AK: Now we’re going to expand our target base. East Preston is 25,000 hectares, which I mentioned. The northern half has had a significant amount of work in terms of geochemical and geophysical surveys. We’ve determined our target base on the northern half. We just ran an airborne geophysical survey on the southern half. We’re hopeful that the southern VTEM survey will generate another target inventory. We’ve got 40 or 50 targets to drill. We’re only going to get to eight or 10 of them here in the short term. Again, we’ve reached the phase now where we’re going to drill something. If we can get a sniff along the way, then it will classify itself as a discovery, and Azincourt will be seen in a different light.
INN: Since I last saw you a couple of months ago, you’ve already come out with some surprising news that was accelerated by your partner. Was that a good sign?
AK: Yeah, a really good sign. The space is strong, and we’re poised. We’re set up to go. Drilling is critical. It’s a different phase in the life of the junior. We’re going to focus on getting as many holes down at East Preston as we can. We think that there’s something special there.
INN: I always enjoy how enthusiastic you remain about the project. It speaks to the value of it.
AK: Thank you.
This interview is sponsored by Azincourt Energy (TSXV:AAZ). This interview provides information which was sourced by the Investing News Network (INN) and approved by Azincourt Energy, in order to help investors learn more about the company. Azincourt Energy 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.
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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.