Resources Top 5: Sprott and Amazon send uranium stocks upstream

• Uranium stocks rise on the back of Amazon’s rising nuclear ambitions
• Deep Yellow and Lotus Resources have both shot up the bourse as Sprott increases its shareholdings
• Koonenberry Gold and Global Uranium and Enrichment rise on proposed Enmore gold project transaction

Here are the biggest small cap resources winners in morning trade, Thursday, October 17. Prices accurate at time of writing.

As the great Kevin Costner once said in arguably his best ever movie Field Of Dreams, “If you build it, they will come.” And come they did – investors that is, into uranium stocks, which have shot up on news that Amazon will join Google and Microsoft in using nuclear energy to power the world’s growing necessity for data centres.

The almost US$2 trillion NASDAQ-listed tech behemoth has thrown its hat in the nuclear ring with investments into projects that are developing small modular nuclear reactors (SMRs).

Amazon is leading a US$500m funding round for X-Energy Reactor, an SMR developer that together plan to bring online >5GW worth of projects by 2039.

It’s also working with utility companies in Washington state and Virginia, where its data centres are planned to integrate SMRs into those areas.

The news comes on the back of Google’s decision earlier this week to purchase energy from multiple SMRs developed by Kairos Power, which are due to come online by 2030.

That move also follows Microsoft’s recently announced 20-year deal to purchase power from Constellation Energy’s currently being redeveloped Three Mile Island nuclear facility, the site of an infamous 1979 reactor meltdown.

Shares in US uranium companies shot up, too, >$US$24bn Cameco rose 8% mid-week, as did Denison Mines with a 14% gain and Energy Fuels with a 17% lift in value.

Prices of the nuclear fuel are up at about US$82.95/lb, a 40% increase since the start of last year.

Deep Yellow (ASX:DYL) and Lotus Resources (ASX:LOT)

(Up on global tech major news)

Shares in DYL are up a significant 12% at time of writing after it notified the ASX that global metals investment manager Sprott increased its shareholding in the yellowcake hunter from 5.96% to 7.82%.

Sprott did the same with Lotus, which rose 16.67% after the metals investor took up a greater position in the junior from 7.32% up to 8.32% on the back of a reduction in held shares by JP Morgan earlier in the month.

Overall, Lotus is up >30% for the month as it looks to accelerate the restart of the 19.3Mlb Kayelekera mine in Malawi after reducing capex to production from US$88m down to US$50m.

DYL on the other hand is progressing development of its two advanced projects: its flagship 121Mlb Tumas project in Namibia and the 104.8Mlb Mulga Rock in WA.

Its stock has soared 42% in the past month, including 12% today at time of writing, to trade at $1.61 with a market cap of an impressive $1.55bn for a ressie that’s not yet in production.

Global Uranium and Enrichment (ASX:GUE) and Koonenberry Gold (ASX:KNB)

GUE and KNB are rocketing up the charts this morning via KNB’s proposed acquisition of the Enmore gold project in NSW’s Lachlan Fold Belt, 20km from Larvotto Resources’ (ASX:LRV) 1.7Moz Hillgrove gold-antimony mine.

KNB is also snapping up 10 granted exploration licences and one exploration licence west of its current projects through the acquisition of Gilmore Metals.

It will pay GUE 35 million shares for the Enmore project and will issue Gilmore Metals’ shareholders with 95 million shares, as well as grant GUE a 2% net smelter royalty.

Enmore covers 134km2 about 30km from Armidale town and sits within the New England Fold Belt that holds large deposits such as the 8Moz Ravenwood mine, the 7.7Moz gold and 0.36Mt copper Mt Morgan mine, and the 2.5Moz Cracow project.

Despite this, the region remains underexplored, with the NSW segment considerably less explored than the Queensland segment.

In tandem with the acquisitions, KNB is raising $4.5m through a share placement supported by major shareholder Lion Selection Group (ASX:LSX) and incoming Lowell Resources Fund (ASX:LRT).

The sale of Enmore will likely fund further exploration at GUE’s historical Maybell uranium project in Colorado as a maiden drilling program continues to impress, with grades of up to 5377ppm U3O8 and thick mineralisation up to 8.2m wide having been recently intersected.

Cygnus Metals (ASX:CY5)

CY5 shares are on fire following an $11m raise via a share placement to institutional and sophisticated investors.

Priced at 72c per share, the placement represents a 10% discount to the last sale price of A$0.08 and was so well-supported with strong demand from existing and new investors that applications had to be scaled back heavily.

The raise follows news of a proposed merger with TSX-V listed Doré Copper Mining Corp, owners of the Chibougamau copper-gold asset where a 10.8Mt at 3.5% copper equivalent resource would easily be one of the highest copper grades on the ASX if the transaction receives conditional approval by December 2024.

Funds from the placement will be used to cover exploration, resource development and study advancement at Chibougamau following completion of the Merger, which is subject to a Plan of Arrangement.

Already unanimously approved by the board of directors, the Chibougamau project includes a 900,000tpa processing facility – the only milling infrastructure within a 250km radius in Quebec – and a 2022 completed preliminary economic assessment (PEA) demonstrating attractive metrics with post-tax NPV of C$193m and 22.1% IRR.

CY5 has affiliations to major goldies in the Richardson Group, a loose affiliation of like-minded explorers involving Steve Parsons and others, including Bellevue Gold (ASX:BGL) and Ramelius Resources (ASX:RMS), as well as FireFly Metals (ASX:FFM) and Andean Silver (ASX:ASL).

Speaking with Stockhead, CY5 exec chair David Southam said the upside potential of Chibougamau is a game changer, with high-grade intersections outside the current resource including 5.9m at 26.4% copper equivalent from 115.8m.

At Stockhead we tell it like it is. While Koonenberry Gold is a Stockhead advertiser, it did not sponsor this article.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.