Uranium stocks guide: Sit back and relax, here’s everything you need to know
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The uranium revival is underway, with market sentiment the most positive it’s been since the 2011 Fukushima disaster which sent stocks – and the price – tumbling.
Poor pricing in the past has led to no new mines being developed, and no funding into large scale exploration to find new resources, which led to the industry relying on existing inventory levels> That in turn has seen them drawn down to scarily low levels.
But all of that looks set to change.
Today the drive for clean energy has put nuclear power back in the spotlight, with consumers increasingly realising the role it can play in decarbonising the world.
Not to mention the need for energy security has been compounded by COVID, and Russia’s invasion of Ukraine, as the US and EU realised how dependent they had become on other countries.
Last month, the uranium spot price hit an 11-year high of US$60/pound – the magic number often touted by uranium players that would push them to get into production.
In this guide, Stockhead explains the factors that have been driving ASX uranium stocks, and what will spur demand — and stock prices — into the future.
Uranium is a very heavy metal that is primarily used as a fuel to provide nuclear power and is also used in nuclear weapons.
One kilo of uranium can produce about 20 terajoules of energy — as much energy as 1,500 tonnes of coal.
Australia has the world’s largest uranium resources, accounting for about one-third of the world total.
Production-wise, we rank just behind Kazakhstan and Canada, but all of our production is currently exported because we don’t generate nuclear power.
But beyond nuclear, uranium is also used in medical diagnostics, transport, the space sector and even conservation and carbon dating.
Right now, the uncertainty around supply is driving demand.
Energy security concerns have been front of mind since the start of the pandemic, but even more so since Russia invade Ukraine, and the US and Europe realised just how dependent they’d become on Russia energy.
Russia accounts for about 35% of global uranium enrichment and about 16-17% of that is imported into the US.
Added to this, Kazakhstan supplies around 40% of the world’s uranium which is shipped out of the Russian ports, so the threat of sanctions on Russia could directly impact supply.
So, uranium players around the world are swinging back into action, looking to restart mothballed projects and kick off new ones.
There are currently 450 nuclear reactors active worldwide, according to the International Atomic Energy Agency, and there are 55 new ones under construction – with 26 expected to come online next year.
Deep Yellow (ASX:DYL) announced it had secured support from the board of Vimy Resources (ASX:VMY) in March for an all-scrip takeover worth $658 million that will increase the chances of developing Vimy’s “world class” Mulga Rock uranium mine in WA.
The merger will create one of the largest independent multi-project uranium companies in the world, with uranium resources of nearly 400Ml. The combination of Vimy’s Mulga Rock Project and Deep Yellow’s Tumas Project will have potential production capacity of 6.5Mlb per annum.
In the meantime, Vimy has announced plans to kick off drilling at its 100%-owned Angularli Project in the Northern Territory in June, while Deep Yellow has completed drilling at Barking Gecko, part of the Nova Joint Venture Project in Namibia.
Paladin Energy (ASX:PDN) recently raised $200 million from investors to support the planned restart of the Langer-Heinrich uranium mine in Namibia by 2024.
Boss Energy (ASX:BOE) released the FEED study on the $113 million restart of its Honeymoon uranium mine in South Australia, paving the way for a final investment decision imminent with restart targeted for 12-18 months time.
Bannerman Energy (ASX:BMN) is progressing the Definitive Feasibility Study (DFS) for the 8Mtpa development1 of its flagship Etango Uranium Project in Namibia, which is due in Q3 CY22.
Lotus Resources (ASX:LOT) says it has strong support from the Government in Malawi to recommence production at its Kayelekera uranium project.
The project hosts a current resource of well over 46Mlb U3O8 and historical production of ~11Mlb of uranium between 2009 and 2014.
The Definitive Feasibility Study is on track to be released by mid-2022.
Aligator Energy (ASX:AGE) has two key projects – ‘Samphire’ and ‘Big Lake’ in South Australia and ‘Alligator Rivers’ in the Northern Territory.
At Samphire a scoping study is planned for Q3 and at Big Lake expanded exploration is planned after the company increased the project tenure by 92% last month.
Peninsula Energy (ASX:PEN) recently started a US$3.4 million early preparatory works program at the Lance Project in Wyoming which has been designed to facilitate an accelerated restart and ramp-up of production operations, should a final investment decision be approved.
Berkeley Energia (ASX:BKY) continues to appeal to Spanish authorities who rejected its plans to build its flagship uranium project at ‘Salamanca’, but it’s worth noting the company had $75M at the end of March – so certainly has the cash on hand to complete a solid acquisition or two.
Aura Energy (ASX:AEE), is on the fast-track to near term uranium production at the flagship Tiris Project in Mauritania, northwest Africa, where it plans to upgrade and expand the uranium resource to support an expansion of uranium production rate early in the project life.
NexGen Energy (ASX:NXG) is focused on the development of the Rook I Project located in the southwestern Athabasca Basin, Saskatchewan, which hosts Measured Mineral Resources of 209.6 Mlb of U3O8 contained in 2.18m tonnes grading 4.35% U3O8.
Toro Energy (ASX:TOE) is nearing completion of the engineering study for the re-optimisation of the Lake Maitland Uranium Project, part of its Wiluna project in WA.
Laramide Resources (ASX:LAM) holds the advanced Churchrock in-situ recovery project and Crownpoint in the US, Westmoreland in Australia and two development-stage assets, La Sal and La Jara Mesa, in the US.
Laramide also owns a large greenfield exploration opportunity – the Murphy Uranium Project – in the NT.
A-Cap Energy (ASX:ACB) was included in the Index Composition for the Global X Uranium ETF (NYSE:URA) earlier this year, joining one of the world’s best known and largest uranium Exchange Traded Funds (ETFs).
It was a vote of confidence for the company’s Letlhakane Uranium Project in Botswana which hosts one of the world’s largest undeveloped uranium resources – 365.7 million pounds of contained U3O8 (100ppm U3O8 cut-off).
Core Lithium (ASX:CXO) acquired the Shoobridge Project last month – which is prospective for lithium – but also gold and uranium.
Norfolk Metals (ASX:NFL) listed last month with drill ready targets at its Orroroo uranium project in South Australia.
Elevate Uranium (ASX:EL8) is the yellowcake stock formerly known as Marenica Energy. It’s currently the largest uranium exploration tenement holder in Namibia, and has an existing 61Mlb U3O8 resource at its ‘Marenica’ project.
DevEx Resources (ASX:DEV) is dusting off its highly prospective Nabarlek project centred at the historical Nabarlek uranium mine in the NT, which was considered Australia’s highest-grade mine with previous production of 24Mlbs grading 1.84% U3O8.
Marmota (ASX:MEU) is evaluating its Junction Dam uranium tenement immediately adjacent to Boss’s Honeymoon uranium mine in SA, which it picked up in October 2021.
Freshly listed Aurora Energy (ASX:1AE) raised $8m at 20c per share in an IPO to explore its ‘Aurora Energy Metals’ project in Oregon, US, which has a defined uranium resource and known lithium mineralisation.
92 Energy (ASX:92E) is focused on its GMZ uranium within the Gemini project in the Athabasca Basin, Saskatchewan, where it recently flagged high-grade uranium (> 1.00% U3O8) in two drill holes.
For context, 1.00% U3O8 is over 10 times the average grade of mined uranium deposits elsewhere in the world.
Energy Metals (ASX:EME) has eight mothballed exploration projects in the Northern Territory and WA, but the stock is tightly held, with only ~200m shares on issue.
Most of this (66.45%) is held by a subsidiary of the state-owned China Nuclear Power Group (CGN), one of the largest nuclear power providers in the world.
Valor Resources’ (ASX:VAL) initial drill program hit elevated radioactivity and associated alteration at its Hook Lake Uranium project in Canada.
The company continues to work on reviewing historical data from all seven of its uranium projects in Canada and aims to have these reported to the market in the coming three to four months.
GTI Resources (ASX:GTR) has started the approvals process for around 12,000m of follow-up drilling at the Thor ISR Uranium Project as well as 18,000m of maiden drilling at the Wicket, Teebo, Odin and Loki projects.
The company is also acquiring 13,800 acres of claims at Green Mountain in Wyoming, abutting Rio Tinto’s claims and adjacent to its existing Great Divide Basin (GDB) projects.
Okapi Resources (ASX:OKR) recently nabbed approval for up to 18,200m of drilling at its Tallahassee project, which the company hopes will further the development of the Taylor-Boyer Prospect to a mining decision.
Sabre Resources (ASX:SBR) acquired private company Chalco in Feb – which owns bunch of projects including uranium tenements in the NT, in Feb.
Thor Mining (ASX:THR) has three projects within a historic high-grade uranium-vanadium mining district in Colorado, known as the Uravan mineral belt, which has produced +85 million pounds of uranium oxide and 660 million pounds of vanadium over the past 100 years.
DELECTA (ASX:DLC) is compiling the historic drill information and mine layouts Rex uranium project in Colorado, with the objective of defining areas where there is a reasonable confidence of a continuation of uranium mineralisation beyond the old workings that can be drill tested.
Argonaut Resources (ASX:ARE) recently acquired a substantial package of uranium exploration licences in South Australia and the Northern Territory via a 100% held, unlisted public company, Orpheus Minerals.
Argonaut is planning to list Orpheus on the ASX as a uranium explorer sometime this year.
Gladiator Resources (ASX:GLA) has two key uranium projects in Tanzania, Minjingu and Mkuju, and is focused on updating the resource at Likuyu so it is JORC 2012 compliant.
Adavale Resources (ASX:ADD) has rejoined the uranium rush, planning for the next phase of exploration at its Lake Surprise’ project — ~90km from the Four Mile uranium mine in South Australia — which has been in the portfolio since 2006.
Cauldron Energy (ASX:CXU) stopped working at its Yanrey project in 2017 when the WA state gov implemented a ban on most new uranium mines, but the company is aiming to explore for uranium mineralisation amenable to extraction by in-situ recovery.
Resolution Minerals (ASX:RML) is mainly focused on finding monster copper-gold deposits, but it does have a couple of projects prospective for uranium in the NT – with its Benmara project highly prospective considering the 51.9Mlb Westmoreland uranium deposit is nearby.
Haranga Resources (ASX:HAR) listed on the ASX earlier this year with a bunch of uranium and gold projects in West Africa.
The company considers its ‘Saraya’ uranium project in Senegal to be both an advanced-stage exploration project and large greenfield exploration project.
Listing: 30 May
IPO: $6m at $0.20
The company plans to explore and potentially develop its East Canyon project in Utah.
The project is prospective for both uranium and vanadium, two minerals anticipated to play a key role in the generation and storage of low-carbon energy.
Listing: 31 May
IPO: $5.5m at $0.20
This company has four projects across the NT, including the Allamber uranium and copper project, the Shoobridge uranium and gold project, the Woolgni gold project and the Mt Davis copper and gold project.
Kingsland also holds the Lake Johnston nickel and cobalt project in WA.