The Conversation (0)
Mar. 08, 2010 11:47AM PST
In last week’s Throne Speech, the Harper government laid out plans to liberalize foreign investment in the Canadian uranium industry in an effort to fire up mining activity.
In last week’s Throne Speech, the Harper government laid out plans to liberalize foreign investment in the Canadian uranium industry in an effort to fire up mining activity. The move comes at a critical time as Canada, the long-time leader in global uranium production, will be outdone by Kazakhstan this year and risks falling behind Australia in the near future.
Although Canada has “the most favorable geological environment” and “the highest grade deposits . . . these projects cost billions of dollars to build and by having foreign investment they are going to create further jobs and keep Canada on top of the pedestal,” points out Simon Tonkin, analyst at Thomas Weisel Partners.
Present legislation restricts foreign ownership in Canadian uranium mining projects to 49 per cent. The Harper government views the cap as too restrictive in that it “inhibit[s] the growth of Canada’s uranium mining industry by unduly restricting foreign investment.”
The hope is that a more open investment climate will lead to a more robust Canadian uranium mining industry and help keep it on par with its global competition. The move is a part of Ottawa’s wider plans to promote economic growth and create employment in Canada that includes opening up the satellite and telecommunications industries as well.
The announcement was welcome news to one of the world’s largest uranium mining companies, France’s Areva, which holds several minority positions in exploration and producing projects in Canada.
“It’s something we’ve been lobbying and promoting with the government for some time,” said the head of Areva’s Canadian unit, Roger Alexander. “We’re pleased to see they recognize it is an issue they need to address. It will certainly help us with upcoming projects that we anticipate for the future.”
Despite applauding the positive implications for Canada’s uranium sector, world leader Cameco hopes the government’s more relaxed policy includes some tit for tat.
Cameco’s CEO Jerry Grandey said a more liberalized policy that doesn’t include other countries opening up their markets as well would be a mistake.
There are indications such prerequisites would be a part of any new policy. The policy review panel that first recommended such changes back in 2008 also stipulated that reciprocity should be central to any new legislation.
Canadian Uranium and the Nuclear Power Industry
The Canadian Nuclear Association is also smiling after the Throne Speech as it sees a more liberal investment policy as a huge step toward improving competition in the industry.
Part of the government’s plan would include simplifying the regulatory and project approval process in Canada’s resource sector, which nuclear energy companies view as key to providing certainty in a very cost intensive industry.
“Nuclear projects have high capital expenditure,” said Laurent Furedi, nuclear communications services centre manager at French energy group GDF Suez. “Nuclear companies need stability with regard to the approvals and regulatory processes, and so on.”
Uranium demand from nuclear power programs in both China and India are expected to eat a big chunk out of global supplies in the coming years, leading to a rebound in recently depressed uranium prices. India and Canada have already inked an agreement over nuclear technology trade. China would savour the opportunity to more aggressively secure fuel supply from Canada.
Exploration Tax Credit Extension
Canadian junior miners have something to smile about, too. It looks like the government will extend the 15 per cent mineral exploration tax credit yet another year until March 31, 2011.
The “flow-through system,” as it’s called, helps create interest in junior miners who need help funding exploration projects. It lets juniors mining in Canada “flow through” their exploration costs to Canadian investors, who can then use them as a write-off on their taxes.
Featured Energy Investing Stocks
Investor Insight
Generation Uranium offers investors high-leverage exposure to a potential major discovery in Canada’s underexplored and resource-rich Thelon Basin, led by a management team with a proven track record of securing high-value exits.
Overview
Generation Uranium (CSE:GEN, OTCQB:GENR, FRA:W85) is a Canadian exploration company focused on wealth creation through discovery within the uranium sector. The company’s primary strategy is to build a high-caliber exploration team that can rapidly test and drill high-potential targets, de-risking projects for potential takeover by larger producers. Currently centered in the prolific Thelon and Angikuni Basins of Nunavut, the company is also actively evaluating additional project acquisitions in the Athabasca Basin to expand its portfolio.
The company is led by a veteran management team with nearly 30 years of experience in mineral development. CEO Michael Collins has a significant track record of building and exiting public companies, including the co-founding of Bluerock Resources, a conventional uranium producer during the 2000-2008 cycle. This expertise is paired with a focused business model that leverages modern geophysical targeting to accelerate exploration timelines and reduce costs, ensuring the company can deliver results quickly in a bullish uranium market.
Company Highlights
- Strategic Location in a Premier Uranium District: The flagship Yath Project is located in Nunavut’s Thelon Basin, contiguous to ATHA Energy’s Angilak Project, which hosts the high-grade Lac 50 deposit.
- High-Grade Discovery Potential: Historical surface sampling at the Yath Project has yielded exceptional uranium grades, including boulders testing at 9.81 percent, 3.95 percent, and 2.14 percent U3O8.
- Expert Management with Exit Experience: Led by CEO Michael Collins, the team has decades of experience in mineral exploration and a history of co-founding companies that were later acquired, such as Prime Mining and Nuclear Fuels.
- Low-Cost, Rapid Exploration Strategy: By leveraging modern geophysics and extensive historical data, the company aims for a "short road to discovery," de-risking projects quickly to maximize shareholder value.
- Bullish Market Fundamentals: Generation Uranium is well-positioned to meet the growing global demand for carbon-free nuclear power, supported by a projected supply deficit and increased interest from major tech companies seeking clean energy.
Key Project
Yath Project - Nunavut, Canada
The Yath Project is Generation Uranium’s flagship project. This 100 percent owned property covers about 120 square kilometers within the underexplored Thelon Basin in Nunavut, Canada. The project is located where the Yathkyed and Angikuni sub-basins meet, which is a region known globally for high-grade uranium potential. It sits directly along the same trend as the Angilak Project owned by ATHA Energy (TSXV:SASK, OTCQB:SASFK, FWB:XSU.F), which contains the Lac 50 deposit, one of the highest-grade uranium resources found outside of the Athabasca Basin with a historical mineral resource estimate of 43.3M lbs at an average grade of 0.69 percent U3O8.
The Yath Project is contiguous to the Lac 50 trend and is crossed by several regional faults and basin boundaries. Past exploration work has already identified high priority targets, while surface sampling in the area has produced uranium grades from boulders, with some testing at 9.81 percent, 3.95 percent, and 2.14 percent U3O8.
The company has commenced its initial field program at the site, set to define and rank drill targets. Historic showings will be combined with new anomalies from the MMT geophysics survey, preparing the project for an anticipated drill permit.
Management Team
Michael Collins - CEO & Director
Michael Collins is a professional geoscientist with nearly 30 years of experience in mineral exploration. He has co-founded several public companies, including Exploits Discovery, Prime Mining (acquired in 2025), and Nuclear Fuels (merged with Premier American Uranium in 2025). He is also currently a director of First Atlantic Nickel.
Christoph Bruening - Director
Christoph Bruening is the founder and managing partner of Value Relations GmbH, a full-service investor relations and public relations agency in Frankfurt with over 25 years of excellence, focusing on mining, exploration, biotech and health care. In addition, he has listed over 600 companies on the Frankfurt Stock Exchange and is a speaker and author of several publications, including on rare earths and uranium.
Dallas Miller - Director
Dallas Miller has been working within the international mining industry for over 15 years, working with BHP and Santos Ltd. He has experience on the ground from an operational standpoint, as well as being an integral part of raising millions of dollars in capital funding for both private and public companies in recent years.
Roger Leschuk - VP Corporate Development
Roger Leschuk has been in corporate management for over two decades, with the past 15 years dedicated to corporate development and investor relations. He has experience participating in and assisting with mergers and acquisitions, and was an investment advisor for various services such as stocks, mutual funds and tax-sheltered investments. He is a Chartered Investment Manager and a Fellow of the Canadian Securities Institute.
Monty Sutton - CFO
Monty Sutton brings over 35 years of experience in public markets and corporate governance. He previously served as CFO for Nuclear Fuels from its IPO through its acquisition.
