Marmota’s return to uranium is thrilling, here’s why
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With uranium prices hitting an 11-year high last week, Marmota’s decision to acquire the Junction Dam uranium tenement immediately adjacent to the Boss (ASX:BOE) Honeymoon uranium mine in October 2021 has come sharply into focus.
After all, Marmota (ASX:MEU) started life as a successful uranium explorer and actually cut its teeth at Junction Dam in South Australia, on which it had spent $8m and earned 100% of the uranium rights by 2014.
By that time, it had developed an JORC resource of 5.4 million pounds of U3O8 with an average grade of 557 parts per million (similar grade to the BOE Honeymoon resource on the adjacent tenement) within the Saffron deposit, and an exploration target of 22 to 33 million pounds, providing the company with immediate exposure to the increasingly bullish market.
As the impact of the Fukushima disaster in 2011 continued to affect the sector, further uranium exploration ground to a halt. Marmota wisely retained those uranium rights, and has now acquired ownership of the tenement.
Times, as they say, are a-changing.
Uranium prices started to really pick up around the middle of 2021 due to a combination of factors and things have really started to get toasty now that the US is reportedly considering a ban on the purchase of Russian uranium as further punishment for its invasion of Ukraine.
The bullish sentiment is also helped by Boss Energy (ASX:BOE), the owners of the Honeymoon plant – located immediately on the adjacent tenement – considering a fast-track restart of their plant, which is just one of four permitted plants in Australia. The Marmota ground book-ends both sides of the palaeochannel that passes through the Boss Honeymoon site. Boss now have a market cap of around $700 million.
Speaking to Stockhead, executive chairman Dr Colin Rose said, “The acquisition of the Junction Dam tenement makes Marmota, for the first time, masters of our own destiny in the uranium space. It is the first and critical step for the company to realise value of this outstanding asset for our shareholders”.
The company has good reason to be excited.
Not only does Junction Dam have an existing resource to the east of the tenement, the company’s previous work has already highlighted a clear path ahead. Over and above the existing uranium JORC resource to the east, there is also an obvious high-priority target to the north that was cleared for drilling but never tested.
Success here will add further to the existing exploration target of between 22Mlb and 33Mlb of U3O8 at grades of between 400ppm to 700ppm U3O8.
Marmota is currently evaluating a number of different options to realise value from its uranium assets for its shareholders, including direct exploration and/or moving the uranium assets into their own distinct vehicle for the benefit of Marmota shareholders.
This article was developed in collaboration with Marmota, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.