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GTI Energy Ltd (ASX: GTR) (GTI or Company) is pleased to provide an update on its planned airborne geophysics program and progress towards reporting an Inferred Mineral Resource Estimate (MRE), in accordance with the JORC code 2012, at its 100% owned ~12,000-acre Lo Herma ISR Uranium Project in Wyoming’s Powder River Basin uranium district (Lo Herma) (Figure 2).
Highlights:
- Airborne geophysics survey has commenced at Lo Herma with aircraft expected to move to Green Mountain & Loki West in due course
- The geophysical survey is designed to advance & prioritise exploration targets
- Additional historical data secured for Lo Herma to enhance exploration potential
- All 1,445 historical drill logs now digitised & compiled in the Lo Herma resource model
- Lo Herma maiden mineral resource estimate report due 1st week of July
- Lo Herma initial drill targeting completed with permitting ongoing for verification & exploration drilling campaign during late 2023 or 1st half 2024
AIRBORNE SURVEY
The airborne geophysical survey has now commenced after delays caused by weather, aircraft repairs and FAA approval. The survey has commenced at the Company’s Lo Herma project area and will, in due course, move to the Loki West and Green Mountain project areas (Figure 2). Terraquest Ltd are conducting the survey using a Piper-Navajo twin engine aircraft (Figure 1) loaded with a suite of sensors that provide detailed radiometric, magnetic and electromagnetic data, allowing for correlation between the three products to further refine the Company’s high- priority targets and potentially locate new targets for upcoming drill programs. The survey sensing package includes a Resolution Magnetometer, Horizontal Gradiometer, Max Gamma Radiometer and Matrix VLF-EM sensors.
Uranium mineralisation at Lo Herma, Green Mountain and Loki West is sandstone hosted. The airborne geophysics is expected to help define major sandstone channel systems which, coupled with historical drilling data and radiometric anomalies, will aid in refining drill target definition.
Executive Director Bruce Lane commented“this airborne geophysical survey is an important component of our program to advance our 100% owned Lo Herma, Loki West & Green Mountain Uranium Projects. The airborne survey follows the results of our recent historical drilling analysis and ground reconnaissance programs that have highlighted high-quality exploration targets at all three project areas. This survey is also expected to help further refine & confirm drill targets ahead of planned drilling at Lo Herma during late 2023 or the first half of 2024.”
FIGURE 1. TERRAQUEST LTD’S AIRCRAFT (PIPER-NAVAJO CGJBG), CASPER AIRPORT, WYOMING
LO HERMA PROJECT – ADDITIONAL HISTORICAL DATA
The Company has secured additional historical data, relating to Lo Herma, containing scanned original drill hole maps, internal memos, drill hole logs with assay data, and interpretive geological cross sections and trend maps produced by Pioneer Nuclear Inc. (Pioneer) and partners, responsible for exploration work at the Lo Herma project site during the 1970’s & 80’s.
Of particular interest is an interpretive geological roll-front trend map collection, which represents redox trend projections and roll front mapping. These maps are of the same series that were included with the original Lo Herma data package and fill a gap in the original data package. This data will allow for a more comprehensive understanding of the geological interpretations of almost a decade of exploration activity. This is expected to aid in the development of additional exploration targets in the lesser explored sand units across the project.
A preliminary breakdown of the data package contents follows:
- 22 Geologic interpretive trend maps
- 29 Detailed drill hole collar maps including mineral intercept summaries
- 38 Geologic cross sections with gamma logs in section
- 12 Claims maps with limited accompanying information
- 9 reports and memos
- 7 Core hole drill logs with assay data, physical properties, & petrological descriptions
The data has been scanned and combined into the Lo Herma database for interpretation and inclusion in the impending JORC 2012 resource report for the project.
Work is continuing on permitting for the planned drill program. Interpreted results of the airborne geophysical survey will also be integrated into the geological & resource model for the deposit when the results come to hand in the coming weeks.
LO HERMA ISR URANIUM PROJECT – LOCATION & BACKGROUND
The Lo Herma ISR Uranium Project (Lo Herma) is located in Converse County, Powder River Basin (PRB), Wyoming (WY). The Project lies approximately 15 miles north of the town of Glenrock and within ~50 miles of five (5) permitted ISR uranium production facilities. These facilities include UEC’s Willow Creek (Irigaray & Christensen Ranch) & Reno Creek ISR plants, Cameco’s Smith Ranch-Highland ISR facilities and Energy Fuels Nichols Ranch ISR plant (Figure 2). The Powder River Basin has extensive ISR uranium production history and has been the backbone of Wyoming uranium production since the 1970s.
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This article includes content from GTI Energy, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
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Overview
Wyoming has the largest uranium reserves of all the US states and is the home of in-situ recovery (ISR) uranium mining, with experimental ISR mining during the early 1960s and commercial ISR mining starting in 1974. The state is an energy powerhouse in the US, second only to Texas in energy production and accounting for more than 80 percent of the country’s uranium production. It has a production history that dates back to the late 1940s. With a soaring uranium price that passed $90 by the end of 2023, many analysts believe the price will remain on the higher end for years to come.
GTI Energy (ASX:GTR,OTCQB:GTRIF) is a mineral exploration company focused on developing a portfolio of attractive uranium projects in the United States. The company now boasts approximately 42,000 acres in the prolific Great Divide and Powder River Basins, which are low-cost ISR uranium-producing districts within 100 miles of each other.
In 2022, the company completed an additional 103 mud rotary exploration drill holes to increase the total trend length for GTI’s projects in the Great Divide Basin to 7.5 miles.
The company has also commenced work at its Green Mountain ISR uranium project next to Rio Tinto’s (ASX:RIO) uranium deposits. GTI has historical drill data confirming the presence of uranium mineralised roll fronts on the properties.
The company is led by a highly experienced management and exploration team with an extensive track record in the mineral exploration industry. GTI’s operational team has proven development and engineering expertise with a history of success in ISR uranium deposit discovery in Wyoming.
GTI’s acquisition of Branka Minerals in November 2021 gave the company control of the largest non-US or Canadian-owned uranium exploration landholding in the Great Divide Basin, with approximately 19,500 acres. The landholding included underexplored and highly prospective sandstone-hosted uranium properties which are the company’s Wyoming projects today. This holding then grew with the purchase of the 13,800-acre Green Mountain project in 2022.
The company further expanded its ISR uranium portfolio in 2023 by acquiring the Lo Herma Project in Wyoming’s prolific Powder River Basin uranium district. The newly staked 13,300 acres of claims are located within 16 kilometers of Cameco’s Smith Ranch-Highland ISR uranium production plant – the largest production site in Wyoming
GTI Energy leverages the strategic positioning of its Wyoming projects, which are located near Ur Energy’s (TSX:URE,NYSE:URG) Lost Creek ISR production plant and the now-rehabilitated historic Rio Tinto Kennecott Sweetwater Mill. The Lost Creek plant is claimed by Ur Energy to be the lowest-cost ISR uranium production plant outside of Kazakhstan.
GTI is committed to strong environmental, social and governance (ESG) initiatives to support the clean energy transition. In November 2021, the company adopted an internationally recognized Environmental, Social and Governance Stakeholder Capitalism Metrics framework, with 21 core metrics and disclosures.
In December 2021, GTI Energy announced it would be transitioning to carbon-neutral operations. The company has subsequently received its carbon neutral certification for its Australian head office and US field operations, through the Australian Government’s Climate Active Program.
GTI Energy is positioned for growth with the pursuit of ISR mining on its Wyoming projects, presenting an opportunity for low operating expenses and capital expenditures with low environmental impact compared to conventional mining. ISR mining supports the company’s goal of low-impact mining and carbon neutrality on its Wyoming projects.
In 2021, the company completed field exploration on its Henry Mountains project in Utah. In the same year, GTI Energy also began a 15,000-meter drill program on its Wyoming projects, concluding the program in early 2022. The drilling confirmed that the targeted ISR-amenable uranium mineralization was present at the Thor project. In 2022, the company completed an additional 103 mud rotary exploration drill holes to increase the total trend length for GTI’s projects in the Basin to 7.5 miles.
Company Highlights
- GTI Energy owns multiple promising assets in Wyoming’s prolific and in-situ recovery (ISR) uranium-producing Great Divide and Powder River Basins. Wyoming is the leading US uranium production state and is “uranium-friendly”.
- GTI’s flagship Lo Herma project comprises 13,300 acres of ground in Wyoming within circa 16 kilometers of Cameco’s $16-billion ISR uranium plant (the largest permitted ISR production facility in Wyoming) and 80 kilometers of five permitted ISR uranium production facilities, including UEC’s Christensen Ranch (due to restart in August 2024) and Peninsula Energy’s (ASX:PEN) Lance Project (due to recommence production in late 2024).
- GTI’s Great Divide Basin projects are strategically located near Ur Energy’s (TSX:URE,NYSE:URG) Lost Creek ISR production plant which has re-commenced production.
- Maiden uranium resource and updated exploration target at the Lo Herma ISR project delivered an inferred mineral resource estimate of 5.71 Mlbs uranium oxide at an average 630 ppm plus an exploration target of an additional 5.87 to 10.26 Mlbs potential at average grade of 500 to 700 ppm.
- Updated total resources across its Wyoming projects of 7.37 Mlbs plus an exploration target of an additional 11.97 to 19.79 Mlbs potential at average grade of 500 – 700 ppm.
- In early 2022, the company completed a further 103 mud rotary exploration drill holes to increase the total trend length for GTI’s projects in the Great Divide Basin to 7.5 miles.
- In late 2023, GTI completed 26 holes at Lo Herma to verify the historical data base & confirm exploration potential along trend & at depth.
- GTI acquired a 1,771 drill hole data set over Lo Herma with a replacement value of AU$15 million.
- GTI received its carbon neutral certification for its Australian head office and US field operations, through the Australian Government’s Climate Active Program.
- GTI aims to utilize ISR mining at its Wyoming projects, which offers lower environmental impact, lower opex and capex than conventional mining.
- GTI Energy has a highly experienced exploration team including the recent appointment of ISR specialist, Matt Hartmann, with a history of successful uranium discovery in Wyoming.
Key Projects
Wyoming Projects
The Wyoming projects are located in the Powder River & Great Divide Basins in Wyoming and the Henry Mountains (Colorado Plateau) Utah, United States. The Greta Divide Basin projects consist of the Thor, Logray, Loki, Odin, Teebo, Wicket and Green Mountain claims. The approximately 13,000 hectare group of projects is prospective for ISR-amenable sandstone-hosted roll-front uranium. The Wyoming projects are situated 5 to 30 kilometers from Ur-Energy’s Lost Creek ISR plant. The projects are also located near Rio Tinto’s Sweetwater/Kennecott Mill.
GTI Energy’s land holding in the Great Divide Basin was bolstered by the acquisition of the Green Mountain project comprising 5,585 hectares of contiguous ISR uranium exploration claims which abuts the Rio Tinto claims at Green Mountain. Historical drill data and geophysics confirms the presence of major uranium mineralisation at the projects.
Initial drilling at Lo Herma commenced in November 2023 and was completed in December with 26 drill holes successfully verifying the historical Lo Herma drill hole database. A drilling permit amendment is currently in progress aiming to optimise follow-up drilling, increase the total number of drill holes, and construct monitoring wells for groundwater data collection. Drilling is expected to resume by July 2024 with an enlarged program, and the mineral resource estimate and exploration targets are expected to be updated in the fourth quarter of 2024.
The company began initial exploration on Thor in 2021, and in 2022, it completed an additional 103 mud rotary exploration drill holes. The drilling of 70 holes was previously reported at the Thor prospect and an additional 33 holes combined have now been completed at the Odin, Teebo and Loki prospects. These 33 holes have discovered an additional combined 4.26 kilometers of ISR amenable uranium mineralised roll front trends increasing the total trend length for GTI’s projects in the Basin to 12.07 kilometers.
In February 2023, GTI Energy secured, by staking, approximately 3,500 hectares of unpatented mineral lode claims known as the Lo Herma project, about 16 kilometers from Cameco’s Smith Ranch-Highland ISR Uranium facility and Energy Fuels Nichols Ranch ISR plant. Lo Herma also lies within 97 kilometers of the companies leading the restart of uranium production in the USA, including Uranium Energy, Ur-Energy, Energy Fuels, Encore Energy and Peninsula Energy.
The company subsequently, secured a material historical data package for the project, which allowed GTI Energy to report a maiden uranium resource and exploration target update at the Lo Herma ISR project, including a cut-off grade of 200 parts per million (ppm) uranium oxide and a minimum grade thickness (GT) of 0.2 per mineralised horizon as 4.12 million tonnes of mineralisation at an average grade of 630 ppm uranium oxide for 5.71 million pounds (Mlbs) of uranium oxide contained metal. The inferred mineral resource estimate is 5.71 Mlbs uranium oxide at an average of 630 ppm.
The company also completed collection of aerial geophysical data at its Lo Herma, Green Mountain and Loki West ISR uranium exploration projects in Wyoming. The survey was conducted using a twin-engine aircraft loaded with a suite of sensors that provide detailed radiometric, magnetic and electromagnetic data, allowing for correlation between the three products.
The airborne geophysical survey at its Green Mountain project consequently updated its drill plan with 16 potential drill holes. The permit application process is underway for the 2024 drill program which aims to test the validity of the historical Kerr McGee drill hole maps, as well as the interpreted mineralised regions as determined from the airborne geophysical survey.
Henry Mountains Uranium Project
GTI’s uranium/vanadium projects in Utah are considered suitable for conventional mining and are located on the east flank of the Henry Mountains, covering 3,860 acres. The permits host historical production, open underground workings and have an exploration permit in place. The projects saw significant work from 2019 to 2021 including two drill programs totaling 52 drill holes and geophysical logging of an additional 76 historical drill holes. GTI subsequently elected to prioritise work at its newly acquired Wyoming ISR projects until such time as activity and investment in the region improves. The company’s projects lie within ~100 miles of Energy Fuels’ (NYSE American: UUUU) (TSX: EFR) White Mesa Mill and within a few miles of Anfield Energy’s (TSX.V: AEC) Shootaring (Ticaboo) mill site. The owners of both of these mills are actively pursuing mill re-starts.
In addition, Western Uranium & Vanadium (CSE:WUC) (OTCQX:WSTRF) has announced the purchase of a mill site in Green River Utah and work to design and permit the facility for processing uranium and vanadium. The plant, which will be located ~80 miles from GTI’s projects, is intended to process feed from Western's recently restarted Sunday Mine Complex over 160 miles away. Western advised of a mine operations restart at Sunday in February 2024. Western stated its new "mineral processing plant" will recover uranium, vanadium and cobalt from ore from Western's mines and that produced by other miners. Western said, on February 13, 2024, it expects the plant to be licensed and constructed for annual production of 1 million pounds U3O8 and 6 million pounds of V2O5, with initial production in 2025.
Based on the renewed interest in exploration, mining, and processing of uranium ore in this region, GTI is currently evaluating potential paths for further exploration, resource development, or other value creating activities with its Utah projects.
Management Team
Bruce Lane - Executive Director
Bruce Lane has significant experience with ASX-listed and large industrial companies. Lane has held management positions in many global blue-chip companies as well as resource companies and startups in New Zealand, Europe and Australia. He holds a master’s degree from London Business School and is a graduate member of the Australian Institute of Company Directors. Lane has led a number of successful acquisitions, fund raising and exploration programs of uranium and other minerals projects during the last 15 years most notably with ASX listed companies Atom Energy Ltd & Stonehenge Metals Ltd & Fenix Resources Ltd (FEX).
James (Jim) Baughman - Executive Director
James Baughman is a highly experienced Wyoming uranium geologist and corporate executive who will help guide the company’s technical and commercial activities in the US. Baughman is the former president and CEO of High Plains Uranium (sold for US$55 million in 2006 to Uranium One) and Cyclone Uranium.
Baughman has more than 30 years of experience advancing minerals projects from grassroots to advanced stage. He has held senior positions (i.e., chief geologist, chairman, president, acting CFO, COO) in private and publicly traded mining & mineral exploration companies during his 30-year career.
He is a registered member of the Society of Mining, Metallurgy, Exploration and a member of the Society of Economic Geologists with a BSc in geology (1983 University of Wyoming) and is a registered professional geologist (P. Geo State of Wyoming). Baughman is a registered member of the Society of Mining, Metallurgy, and Exploration (SME) and a qualified person (QP) on the Toronto Stock Exchange (TSX) and Australian Stock Exchange (ASX).
Petar Tomasevic - Non-executive Director
Petar Tomasevic is the managing director of Vert Capital, a financial services company specializing in mineral acquisition and asset implementation. He has worked with several ASX-listed companies in marketing and investor relations roles. Tomasevic is fluent in five languages. He is currently appointed as a French and Balkans language specialist to assist in project evaluation for ASX-listed junior explorers. Most recently, he was a director at Fenix Resources (ASX:FEX), which is now moving into the production phase. He was involved in the company’s restructuring when it was known as Emergent Resources. Tomasevic was also involved in the company’s Iron Ridge asset acquisition, the RTO financing, and the development phase of Fenix’s Iron Ridge project.
Simon Williamson - Non-executive Director
Simon Williamson was general manager and director of Cameco Australia until late 2023 and has significant uranium industry experience, networks and skills from his 13 years at Cameco. During his tenure with Cameco, Williamson managed relations with key government ministers and departments and community stakeholders. He managed project approvals processes, including negotiations with State and Federal agencies and reviewing the PFS for the Yeelirrie project.
Williamson was intimately involved in obtaining environmental approval for the Kintyre and Yeelirrie uranium projects, including developing and implementing a program of environmental baseline studies, government and community consultation and negotiating land access. Prior to his appointment as general manager, he led the government and regulatory affairs, environmental and radiation safety activities of Cameco in Australia. He also held roles with minerals industry participants in Australia and the US including various positions at Cliffs, Sons of Gwalia the WA Chamber of Minerals & Energy and WMC where he negotiated the mine closure criteria for a gold project near Sacramento, California.
Matt Hartmann - Director
ISR uranium specialist Matt Hartmann is an executive and technical leader with more than 20 years of international experience and substantial uranium exploration and project development experience. He first entered the uranium mining space in 2005 and followed a career path that has included senior technical roles with Strathmore Minerals and Uranium Resources. He is also a former principal consultant at SRK Consulting where he provided advisory services to explorers, producers and prospective uranium investors. Hartmann’s ISR uranium experience has brought him through the entire cycle of the business, from exploration, project studies and development, to production and well field reclamation. He has provided technical and managerial expertise to a large number of uranium ISR projects across the US including, Smith Ranch – Highland ISR Uranium Mine (Cameco), Rosita ISR Uranium Central Processing Plant and Wellfield (currently held by enCore Energy), the Churchrock ISR Uranium project (currently held by Laramide Resources), and the Dewey-Burdock ISR Uranium project (currently held by enCore Energy).
Matthew Foy - Company Secretary
Matthew Foy is an active member of the WA State Governance Council of the Governance Institute Australia. Foy has more than 14 years of experience in facilitating ASX-listing rule compliance. His core competencies are in the secretarial, operational, and governance disciplines for publicly listed companies. Foy has a working knowledge of the Australian Securities and Investments Commission and Australia Stock Exchange reporting. He has document drafting skills that provide the basis for valuable contributions to the boards on which he serves.
Rigs Secured For Wyoming Uranium Drilling & Utah Fieldwork Completed
Henry Mountains Utah Uranium & Vanadium Projects
GTI also completed a field reconnaissance exploration program at its Henry Mountains project. The program aimed to enhance GTI’s understanding of uranium & vanadium mineralisation within Section 2 at the southwestern end of the 5.5km mineralised strike including Section 36 between the Jeffery & Rats Nest areas (Figure 2). The data collected will help guide any further exploration drilling at the project area.
Read the full article here.
When Will Uranium Prices Go Up? (Updated 2024)
This most recent rally was sparked by a confluence of global and market events, including the Russia-Ukraine war and uranium supply challenges related to conversion and enrichment.
The drive for nuclear energy to be a part of the fight to combat climate change is also having an oversized impact on the uranium price outlook as governments look to nuclear as a carbon-free energy source. Even Sweden is considering lifting its ban on uranium mining in an effort to support growth in it own nuclear power industry, for which it currently imports nuclear fuel.
"Sweden currently uses 2.4 million pounds U3O8 annually in its three nuclear power plants and has committed to building two additional nuclear reactors by 2035," World Nuclear News reported.
Although prices have since pulled back to the US$78 to US$80 range as of mid-September, there are notable signals that the market may be in for plenty of upside to the uranium price forecast in the years ahead.
For many years, the uranium market's back-and-forth struggle to move out of a rather entrenched trough had investors asking, "When will uranium prices go up?" Now that they have, the questions that remain are whether they are up enough to spur uranium mining activity and whether or not they have further to go.
Before we try to answer those questions, we'll have a look at what's moved the uranium spot price in the past, including the energy metal's supply and demand dynamics.
How have uranium prices traded historically?
As briefly outlined above, uranium has experienced a wide price range this past century — while its highest level was nearly US$140, the lowest U3O8 spot price came in at just US$7.
In 2003, the price of uranium began an upward trend as demand for nuclear power rose alongside the world's need for energy, especially in growth economies such as China and India. These increasing energy demands came at the same time as significant supply-side disruptions. For example, in 2006, Cameco's massive Cigar Lake mine in Saskatchewan flooded, stalling production for several years at one of the largest uranium deposits in the world.
The inability to move this uranium ore to market was a huge setback for the uranium industry, and translated into explosive price growth for the metal in 2007. However, those impressive gains were soon undone by the 2008 economic crisis, which sent uranium on a downward spiral, slipping below the key US$50 level in early 2009 and to the US$40 range in 2010, as is shown in the uranium price chart below.
Uranium's price history, 2000 to 2024.
Uranium price chart via Trading Economics.
At the start of 2011, uranium got a serious push to the upside along with other energy metals as the global economy began to recover. The tight supply situation, heightened by years of low prices, also played a part in pushing the spot price past the US$70 level.
The rally was short-lived, however, as Japan’s Fukushima nuclear disaster in March shook confidence in the sector. The uranium spot price began a slow slide to lows not seen since the start of the century, ultimately bottoming out at US$18 in November 2017.
Although COVID-19-induced supply disruptions at the world's top uranium mines briefly sent the commodity to a four year high of US$33.93 in May 2020, it wasn't until the fall of 2021 that uranium started to find its footing again.
In September 2021, uranium began to show signs of life as it shot up to a nine year high of US$50.80. The 2021 uranium price rally came after supply cuts from major producers, including Kazakhstan's Kazatomprom and Canada's Cameco( TSX:CCO,NYSE:CCJ), alongside the emergence of the launch of the Sprott Physical Uranium Trust (TSX:U.UN).
Prices were soon see-sawing between US$38 and US$48 in October and November, but the start of 2022 brought civil unrest in Kazakhstan, as well as Russia's invasion of Ukraine. These events proved price positive for the uranium market, and by mid-April, uranium prices had reached an 11 year high of US$64.61.
Looking at the demand side, utility companies had once again returned to the table to sign new long-term uranium supply agreements to secure price and supply. This coincided with uranium supply challenges related to conversion and enrichment. The result was that from April 2021 to April 2022, the price of uranium soared by an eye-popping 106.47 percent.
By H2 2022, uranium prices had begun to slide back to the US$50 range. Much like the broader commodities market, uranium felt the squeeze of higher interest rates as central banks, including the US Federal Reserve, sought to curb rising inflation.
While the uranium price remained stuck in the low US$50s range for much of 2023’s first half, positive fundamentals born out of the view that nuclear energy is critical to reducing global carbon emissions sparked another major price rally beginning in the fall. By January 2024, as the uranium spot price hit US$106 per pound, many market analysts were loudly proclaiming that the next uranium bull market is finally here.
However, uranium prices went on to consolidate in Q2 2024 to the US$80 range, which many experts see as a natural part of the nuclear fuel's emerging bull market cycle. Although the spot price has pulled back this year, the long-term contract price has increased. Term prices are considered by industry insiders to better reflect uranium market fundamentals.
What factors impact uranium supply and demand?
Uranium prices are mainly influenced by aboveground mine supply and demand for nuclear energy. To understand where those stand, investors in this sector typically look to:
- output from uranium mines
- the number of nuclear reactors online, under construction or planned
- the signing of long-term contracts between uranium suppliers and utilities companies
Analysts with a bullish lean believe the uranium market cycle has reached its bottom and that a break to the upside for uranium prices is supported by positive supply and demand fundamentals.
On the demand side, nuclear energy generated from 440 reactors around the globe supplies about 9 percent of the world's energy requirements. Russia is constructing four with another 14 confirmed or planned, and India has seven nuclear reactors under construction. Meanwhile, China alone is constructing 30 new reactors at the moment. In fact, Bloomberg reported in August 2024 that the Chinese government is investing US$31 billion in building 11 new reactors across five sites over the next five years.
A World Nuclear Association (WNA) report forecasts that nuclear generation capacity will grow from 391 gigawatts electric (GWe) in 2023 to a total of 686 GWe in 2040. About 83,840 metric tons (MT) of uranium will be required to feed reactors in 2030, up significantly from the 65,650 MT of uranium required in 2023, according to the WNA's uranium forecast. The firm projects that nearly 130,000 MT will be needed in 2040.
On the supply side, major uranium producers are still not producing at full capacity, and new uranium exploration and development projects are few and far between. The WNA points out that world uranium production dropped from 63,207 MT of uranium in 2016 to 47,731 MT of uranium in 2020. Although that figure ticked up slightly higher in 2021 to 47,808 MT and again in 2022 to 49,355 MT, the organization notes that only 74 percent of 2022's reactor requirements were covered by primary uranium supply.
Huge cuts to global uranium production have come from Kazakhstan, the world's largest uranium-producing country. Responsible for 43 percent of global uranium production, the Central Asian nation began reducing its annual production levels in 2018.
In its 2023 financial report, Kazakhstan’s state uranium firm Kazatomprom warned that it sees a major supply deficit in the uranium market post-2030. “In the current pricing environment, another Kazatomprom-sized supply source will be needed to cover future market needs," said Kazatomprom CEO Meirzhan Yussupov.
In early 2024, the company reduced its production guidance for the year due to several challenges, including difficulties obtaining sulfuric acid.
However, after its H1 2024 production totals showed a 6 percent increase over total production in the same period last year, Kazatomprom increased its production guidance for the year from a range of 21,000 to 22,500 MT of uranium to the new guidance of 22,500 to 23,500 MT of uranium. The company's sales guidance for 2024 remained unchanged.
Canada, Namibia, Australia and Uzbekistan are also among the world's biggest uranium producers. In Canada, Cameco shuttered the Saskatchewan-based McArthur River mine in 2018 and temporarily closed Cigar Lake — the world's top uranium mine — in response to the COVID-19 pandemic. In November 2022, the mining giant brought the McArthur River/Key Lake operation back online.
In 2023, Cameco produced 17.6 million pounds of uranium, falling short of its original production target of 20.3 million pounds for the year. The company’s 2024 guidance is set at 22.4 million pounds. In its H1 2024 report, the company shared that production for the first half of the year had come in at 12.9 million pounds.
As for Australia, Boss Energy (ASX:BOE,OTCQX:BQSSF) announced in April 2024 that it had produced the first drum of uranium out of its Honeymoon project in South Australia as part of its commissioning process. The current mine plan only uses 36 million pounds of the project's total JORC resource of 71.6 million pounds. Boss’ goal is to scale up production at Honeymoon to 2.45 million pounds of U3O8 per year.
In the US, Boss Energy began uranium production at its South Texas-based Alta Mesa in-situ recovery (ISR) central processing uranium plant in June 2024. “With operations now ramping up at both Honeymoon and Alta Mesa, we are on track to hit our combined nameplate production target of 3 million pounds of uranium per annum," said Managing Director Duncan Craib.
Uranium Energy (NYSEAMERICAN:UEC) announced the restart of uranium production at its Wyoming-based Christensen Ranch ISR operations in August 2024. The first shipment of yellowcake from the mine is projected later in the year. Scott Melbye, executive vice president at UEC, told INN during a March 2024 interview that the Burke Hollow ISR project in Texas will be company’s next project to come online.
Despite this positive news, the WNA reports that supply deficits are likely to continue in the years ahead as current global production levels are not enough to meet forecasted demand.
"To meet the Reference Scenario requirements from early in the next decade, in addition to restarted idled mines, mines under development, planned mines and prospective mines, other new projects will need to be brought into production,” the WNA report states. “Considerable exploration, innovative techniques and timely investment will be required to turn these resources into refined uranium ready for nuclear fuel production within this timeframe."
When will uranium prices go up?
So when can investors expect to see further gains in the uranium price? And how far can we expect uranium spot prices to climb?
A good gauge for which way the winds are blowing is utilities contracts, as these entities are traditionally the greatest sources of uranium demand. In fact, only about 10 to 15 percent of uranium trades happen on the spot market — the vast majority of uranium is sold through large long-term contracts between producers and utilities.
It's also useful to watch the rest of the nuclear fuel cycle. Russia controls about 50 percent of global conversion and enrichment capacity — this dominance amid the country's war with Ukraine has spiked prices for these services. Recent moves by the United States may impact this dominance. In mid-May 2024, Biden signed into law a US bill banning Russian uranium imports through the end of 2040.
Speaking to the Investing News Network in a June interview, Ben Finegold, director at Ocean Wall, referred to this as one of the most significant events for the uranium market since Russia's invasion of Ukraine.
"I think that we're going to start to see a move much higher both in terms of term volume and in terms of term prices," he said. "Fuel buyers have got the clarity that they need, particularly in the west now, on the US' stance on the future procurement of Russian uranium."
In the month following the launch of the ban on Russian uranium imports, the US Department of Energy announced plans to invest up to US$2.7 billion to stimulate the development of the country's uranium enrichment capacity and nuclear fuel supply chain.
Not to be outdone, in September Russian President Vladimir Putin put forth the threat of limiting exports of uranium to western nations. The news gave a bump to the share prices of uranium miners such as NexGen Energy (TSX:NXE,NYSE:NXE), Cameco and Denison Mines (TSX:DML,NYSEAMERICAN:DNN).
Uranium stocks have languished in recent months as the winds have left the sails of uranium prices. But plenty of optimism remains for the sector. Speaking to INN in September 2024, Mart Wolbert, analyst at Contrarian Codex, shared his thoughts on supply and demand fundamentals in the uranium market, why uranium prices have dropped, if uranium stocks will go up and what's next for prices.
Even though uranium spot prices have receded down around the US$80 level, Wolbert remains bullish on the market going forward and thinks higher prices could be in the cards. He points to the 42.5 million pounds that have been signed into long-term contracts this year, and advises uranium market watchers to look at term prices rather than spot as a truer indication of where the market is going.
As Reuters reports, long-term uranium prices are coming in at 16-year highs, and are expected to increase further. "With a stronger market environment, we're currently locking in ceilings of about $125-130/lb and floors at about $70-75/lb in market-related contracts," according to Cameco.
Looking over at spot uranium price prediction for 2025, as of mid September 2024, analysts at Trading Economics were forecasting that uranium would trade at US$82.60 in 12 month's time.
This is an updated version of an article first published by the Investing News Network in 2020.
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
High-Grade Uranium Interval of 1963ppm at Likuyu North at the Mkuju Uranium Project; Commencement of Initial ISR Work
- Drill-hole LNDD020 drilled at the Likuyu North deposit, part of the Mkuju Project, returns 6 mineralised intervals including 7.1 metres averaging 1,963ppm eU3O81, from 63.1 metres depth. This hole was drilled central to the deposit to provide core for an assessment of In Situ Recovery (ISR) of the uranium.
- ISR is the preferred method for mining uranium deposits. ERM Australia Consultants Pty Ltd (ERM) are undertaking an initial ISR assessment for Likuyu North.
- Drill-hole LNDD015 down-dip of the deposit has a ~5m mineralised interval; samples have been dispatched to the lab. This interval is 100m south of the current Mineral Resource Estimate (MRE).
- The 2022 JORC compliant MRE for Likuyu North (4.6 Mlbs U3O8) was based on a pit- shell assuming conventional open-pit mining methods; adoption of ISR may support expansion of it.
Commenting on the drill results, Gladiator’s Chairman Greg Johnson said:
“Drillhole LNDD020 demonstrates the quality of the Likuyu North deposit, and we are excited by the potential opportunity the area provides. Grade and other characteristics appear to be well-suited to ISR. With that in mind, Gladiator has appointed ERM (formerly CSA Global) to help advance this strategy, and if the ISR study is encouraging the Company will consider larger-scale exploration at Likuyu North, Likuyu South and at the Mtonya deposit area, with an aim of maximizing the resource available for a potential ISR operation”.
Drillhole LNDD020
This hole was drilled to provide fresh drill-core to assist with initial assessment of the potential of ISR as a mining method for the Likuyu North deposit. The deposit has a JORC compliant Mineral Resource Estimate of 4.6Mlbs U3O8 with an average grade of 267ppm U3O8. The hole was positioned in an area relatively central to the deposit known to have thick and high-grade mineralisation, hosted by medium to coarse grained sandstone beds. Figure 1 is a cross-section and shows LNDD020. The hole contains 6 mineralised intervals (Table 2) including:
- 2.5 metres with an average grade of 438 ppm eU3O8 from 17.1m depth.
- 7.1 metres with an average grade of 1,963 ppm eU3O8 from 63.1m depth.
Figure 1: North-south cross-section showing the downhole logged eU3O8, mineralized layers and oxide/transitional zones. LNDD015 and LNDD020 are shown.
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This article includes content from Gladiator Resources Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
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