Special Report: The US government is considering a raft of new options to help strengthen its domestic uranium industry, a move that puts GTI Resources in a very nice position indeed.

You see, GTI is one of just three ASX-listed uranium players in the US, and this is the second look by bureaucrats at the US uranium industry in a matter of months as the country looks to boost its domestic supply.

The US currently imports more than 90 per cent of its annual domestic uranium demand, with a large percentage supplied from Russia and Kazakhstan.

But now President Donald Trump is seriously considering a plan that would see the government directly purchase uranium from local producers.

Bloombergreported last Friday that a group set up by President Trump was mulling a request by the nuclear industry to use the Defense Production Act, a 68-year-old Cold War-era statute once invoked by President Harry Truman to help the steel industry.

Paul Goranson, the chief operating officer of US-based uranium producer Energy Fuels, said the government seemed receptive to the idea of directly purchasing uranium.

“The president intends to take bold action on this. It’s got his attention now,” Goranson told Bloomberg.

Energy Fuels was one of the two companies that previously called on the government to impose a restriction that required US utilities to source 25 per cent of their supply from freshly mined US uranium.

Although that suggestion was knocked back, the industry is not backing down and has requested “federal actions facilitating domestic uranium production” of at least 7.5 million pounds per year by 2025 and 10 million pounds per year by 2030, Bloombergreported.

And there is optimism that the measures the government might implement could include a potential minimum guaranteed price.

“Obviously it is about getting some security around the uranium price for miners and producers,” GTI managing director Bruce Lane told Stockhead.

“I think that is clearly understood by everyone — unless there is a certain price paid for uranium, no one is going to bother digging it up.

“That’s just one possibility, obviously there’s a whole raft of initiatives they could put in place.

“But it seems pretty clear that the US government wants to support the industry and they understand how important it is to have a good solid nuclear fuel and uranium supply.”

Best US uranium jurisdiction around

GTI recently picked itself up eight highlyprospective uranium and vanadium exploration projects in Utah, one of the most mining friendly states in the US.

The projects are located in the Henry Mountains mining district of south eastern Utah – a region that has produced 92 million pounds of uranium and 482 million pounds of vanadium.

The Henry Mountains are located within Garfield County — the fourth largest producer of uranium and vanadium in Utah.

The region forms part of the prolific Colorado Plateau uranium province which has historically provided the most important uranium resources in the US.

Energy Fuels owns the only operating uranium mill in the US — the White Mesa Mill — located within trucking distance of GTI’s newly acquired projects.

“It is a very significant mill with a lot of capacity and it’s not really running as an ongoing concern to support mining operations,” Lane said.

“So, if the US government implements a minimum price or guaranteed direct government purchasing, that would give Energy Fuels enough confidence to then be able to put their mill into production.

“And when they put their mill into production, they do not have enough uranium supply to feed it.”

Lane said that gave nearby explorers and miners, including GTI, the short-term, low-cost opportunity to supply feed to the mill.

“Whether or not that means toll milling or purchase agreements, or even the sale of projects to Energy Fuels or joint venturing, we obviously don’t know, but all those things become possibilities.

“Once the price is set and there’s enough confidence for Energy Fuels to restart production at the mill, then they’re obviously going to want feed to keep that thing running at capacity.”

 

This story was developed in collaboration with GTI Resources, a Stockhead advertiser at the time of publishing.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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