The Conversation (0)
Jul. 22, 2013 04:30AM PST
Improving stock prices in the face of depressed uranium prices may be a bullish signal for savvy investors.
A strategic uranium processing plant in Southern China has been scrapped following public protests over safety concerns. Now state-owned China General Nuclear Power and China National Nuclear are on the hunt for a new site for the much-needed processing plant, reported Reuters.
Without the $6.5 billion-facility, the country will be hard pressed to fuel its growing nuclear reactor program. China plans to build 30 plants over the next three years, adding 29 GW of nuclear power to its current installed capacity (12.57 GW) by 2016.
Nuclear power safety strengthening globally, says IAEA
In its annual review of nuclear safety worldwide, the International Atomic Energy Agency (IAEA) said that “the world nuclear community has made noteworthy progress” despite many aging reactors. The disaster at Fukushima more than two years ago prompted many nations to conduct safety stress tests on their nuclear power plants, with several initiating additional safety measures, said Reuters. The biggest challenge to global nuclear energy safety continues to be “long-term operation and ageing of nuclear power plants.”
Uranium market facing supply challenges
The troubled uranium price, lack of investment capital and greenfields development, coupled with the increasing number of nuclear reactors worldwide, have created a looming supply crisis in the uranium market, according to John Borshoff, CEO of Paladin Energy (TSX:PDN,ASX:PDN). “[T]he uranium industry is definitely in crisis, I believe, and is showing all the symptoms of a mid-term paralysis if this situation does not demonstrably change,” he said, speaking at the Australian Uranium and Rare Earths conference this week. On Wednesday, the company posted production results showing a record year with overall production rising 20 percent, to 8.25 million pounds, on increased output from the Langer Heinrich and Kayelekera operations.
Market watchers remain confident that the uranium market is on the verge of a significant turnaround, despite spot prices dipping below $40 per pound last month for the first time in four years. A total of 66 nuclear plants are under construction worldwide and another 266 are planned or proposed over the next 15 years, notes Australian Mining. The publication estimates that demand will outpace supply by more than 11,000 tonnes in 2013.
The coming supply shortage has uranium market gurus like Jeb Handwerger taking a bullish stance on uranium mining stocks. Uranium spot prices may be on a downward slide, but “uranium miners such as Cameco [TSX:CCO,NYSE:CCJ] are up over 30% since the November low … this outperformance of Cameco versus the uranium spot price may be signaling a potential bullish reversal for the sector,” said the mining analyst and editor of Gold Stock Trades in a recent article.
Junior company news
Brades Resource (TSXV:BRA) signed an agreement to acquire the Lorne Lake uranium property in Saskatchewan’s Western Athabasca Basin. The property comprises approximately 97,500 acres with regional proximity to Cameco’s Centennial deposit to the east and the Patterson Lake South discovery to the west. The geology of the property consists of faults and lineaments that, according to the news release, “parlay over favorable magnetic geophysical data, a combination which has been highly conducive to past uranium discoveries in the Basin.”
Forum Uranium (TSXV:FDC) acquired a strategic 100-percent interest in the Highrock South property in Saskatchewan’s Athabasca Basin. The 1,381-hectare property is located 15 kilometers south of the Cameco/AREVA (EPA:AREVA) Key Lake uranium processing facility and is a continuation of the prospective key Lake/Black Forest conductive trend that hosts the Key Lake uranium deposits.
A $6.95-million summer drill program has commenced at the Patterson Lake South property, a joint venture between Alpha Minerals (TSXV:AMW) and Fission Uranium (TSXV:FCU) outside the Athabasca Basin in Saskatchewan. The program will consist of approximately 11,000 meters and will focus on testing for continued expansive delineation of the three high-grade uranium mineralized zones discovered during the 2013 winter program. The partners announced partial results from the first hole drilled. “Hole PLS13-072 … has so far returned a broad 85.5m interval (62.0m – 147.5m) of variably radioactive mineralization including a total of 18.93m of off-scale (>9999 cps) radioactivity in numerous narrower intervals throughout,” states the press release.
Fission also reported that it has filed a patent application for an invention related to an airborne system and method for detecting and mapping locations of radioactive geologic deposits such as boulders and rock clusters. The invention allows for a high-resolution survey, improving upon current airborne surveying methods for radioactive deposits. Fission used the system and method to discover the high-grade uranium boulder field at its Patterson Lake South property.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
FCU:CA
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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.
