The Conversation (0)
Jan. 04, 2011 02:02PM PST
China claims it has developed technology to reprocess spent nuclear fuel after working on this process for more than two decades. Investors may take some cautionary note of the release as the country has demonstrated strategic business acumen in other resource market positioning and foreign currency exchange rate policies.
The first decade of the millennium ended with uranium spot market prices remaining unchanged for a third week after trading in the spot market slowed as traders went on seasonal holidays. Ux Consulting Company reported uranium-oxide concentrate for immediate delivery traded at $62.50 a pound in the week to December 31, an increase of 4.2 percent from the start of the month. The 40 percent surge in spot prices in 2010 was the biggest atomic expansion since the decade after the 1970s oil crisis primarily triggered by investment from China and India to reduce air pollution and power their economies.
Uranium producers in Canada and Australia are anticipating global demand to increase as countries expand their use of nuclear power to curb emissions from burning fossil fuels, particularly coal. Trading in uranium futures is expected to climb this year from 2010, especially if utilities raise their participation in the market. Last year, more than 25,000 contracts involving more than 6 million pounds of concentrate were traded representing an increase of almost five times the previous year’s total.
Hedge funds and institutional investors who returned to the market last year are expected to increase trading volumes in the physical market this year. “Activity remains slow and few participants have shown much interest in completing transactions,” UxC said. “As market participants come back from the holidays, we will see brokers’ forward offerings fill out with more bids and offers.” Uranium output from mines in Kazakhstan, which reached 10 million pounds in 2010, is expected to increase again this year. Additionally, the United Kingdom (UK) may order a new reactor and a Middle Eastern country is expected to make a “serious push” to go nuclear.
Last month the UK unveiled its longer term energy market reforms plans, predicting that the new package of measures will lead to a huge increase in investment for renewable, nuclear and carbon capture and storage (CCS) projects; however, the proposals stop short of providing precise details on the future price of carbon emissions and the regulations governing fossil power plants, that will ultimately be important for investors to determine the economic feasibility of low-carbon projects.
Currently, the UK has 19 reactors operating which generates about 18 percent of domestic electricity and all but one of these will be retired by 2023. In the late 1990s, nuclear power plants contributed around 25 percent of total annual electricity generation in the UK, but this has gradually declined as old plants have been shut down and age related problems have affected plant availability.
Potential Chinese Technological Innovation
China claims it has developed technology to reprocess spent nuclear fuel after working on this process for more than two decades. If these claims prove to be accurate, it could expose a potential negative implication for uranium demand, because China will be able to extract more energy from a given amount of uranium than it previously could. Investors may take some cautionary note of the release as the country has demonstrated strategic business acumen in other resource market positioning and foreign currency exchange rate policies.
The new technology involves reusing irradiated nuclear fuel and was reportedly developed at facility No 404 operated by the state-controlled China National Nuclear Corp (CNNC). According to the report the breakthrough could extend the expected life cycle of China’s uranium resources to 3,000 years from what had earlier been regarded as a 50 to 70 year supply.
China has the highest number of planned and proposed new nuclear reactors in the world with 157. Totaling the number of planned and proposed new nuclear reactors from other top 5 stakeholders still fall short of China’s potential commitment, including expectations from India 58; Russia 44; USA 31; and Ukraine 22. The CNNC is expected to spend $117.6 billion on the development of nuclear industry by 2020. China’s uranium demand is expected to reach 20,000 tonnes a year by 2020, with the nation expected to produce domestically 2,400 tonnes a year by that time.
BMO Capital Markets analyst Edward Sterck suggested the technology could reduce future uranium demand and potentially weigh on prices. However, BMO does not anticipate significant changes to near-term projections as roll out of the technology is likely to take a number of years.
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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.
