The Conversation (0)
May. 17, 2011 02:30PM PST
The Olympic Dam promises to be a considerable asset for Australian energy resources. It is considered to be the world’s largest uranium deposit and the enormous scale of the expansion ambitions are revealed in the SEIS which estimates that BHP will spend $30 billion to access the resource.
By Dave Brown – Exclusive to Uranium Investing News
Olympic Dam promises to be a considerable asset for Australian energy resources joining the North West Shelf gas shelf and Queensland gas and coal basins as a source of great future national wealth. It is considered to be the world’s largest uranium deposit and the enormous scale of the expansion ambitions are revealed in the SEIS which estimates that BHP will spend $30 billion to access the resource. The shape of the enormous deposit is described as a frying pan, with the current underground mine taking ore from the “handle” and the planned open pit mining taking place on what is the “pan” of the ore body.
The handle of the deposit was discovered by Western Mining Corporation; however, the asset was sold before the scope of the pan was known. Low cost acquisition has historically been a prime catalyst for BHP growth with the company acquiring its Mount Newman iron ore from CSR and others and Chilean coal and copper from Utah.
The president of BHP’s uranium business unit, Dean Dalla Valle, indicates that the quantitative estimates in the environmental statement are based on a 40-year Olympic Dam life, although the pan in fact has a 100 year life. The extensive expansion will involve a preliminary six years of development to remove the overburden to access the pan. Upon completion this would remove the 350 meter thick zone of overburden and the rock taken out would be transported to a rock storage facility that covers 6,720 hectares and will eventually reach the height of 150 meters. By 2050, when the mine has not even completed half of its anticipated project life, the pit will be an estimated 3.5 kilometers wide, 4.1 kilometers long and one kilometer deep.
While BHP is removing the overburden and after the open cut starts it will continue to exploit the existing underground mine. At full capacity the company expects to produce a total of 19,000 tonnes, including 15,000 tonnes from the open pit and 4,000 tonnes from the underground mine becoming the world’s biggest uranium supplier. Mr. Dalla Valle says that, despite the forecasted 19,000 tonne Olympic Dam uranium output, his present estimates indicate a considerable global shortfall of 50,721 tonnes of uranium on the basis of current and projected output. The impending shortfall could result in uranium prices increasing substantially by the end of this decade, coinciding with when the open pit mine begins ramping up its operation.
A critical revenue source during the development years will be from copper production with most recent estimates equivalent to 515,000 tonnes of copper per year. At present the ore being extracted from underground is converted to copper metal and there was pressure on BHP to do the same with open pit ore; however, the company has opted for a copper concentrate that includes uranium, gold and silver, which will be transported by railway via Alice Springs to Darwin. The tailings from producing the concentrate will be rich in uranium but also include copper, gold and silver. The uranium will be extracted from the tailings by employing a hydrometallurgical plant along with a desalination plant and further support facilities.
Spot market uranium price climbs
Last Friday, the weekly uranium spot price closed at $57.00 per pound. Trade tech reported 8 transactions during the week with a range of spot market uranium prices increasing $1.00 per pound above those concluded at the beginning of the week. The increase in the price for recent transactions was attributed primarily to rumors that a supplier had reached an agreement for the purchase of a considerable quantity of approximately 2,000 tonnes of uranium being transferred by the US Department of Energy (DOE) under a Secretarial Determination issued on March 2. The Secretarial Determination authorized the uranium transfers to fund accelerated cleanup activities at the Portsmouth enrichment facility in Piketon, Ohio, through the third quarter of calendar year 2013. The market responded to the rumors that such a large block of material had been removed as potential lack of inventory. In turn, buyers exhibited a willingness to pay higher prices in order to secure material.
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.
