Thor powering up with US uranium and vanadium acquisition
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The tide continues to turn for uranium and Thor Mining (ASX:THR) is keen to ride this wave with its move to acquire a private Australian company with interests in uranium and vanadium-focused projects in Colorado and Utah.
It’s certainly a well timed move given the positive sentiment that uranium has enjoyed in past months and the US Energy Department indicating that the government will soon start buying uranium to build the country’s reserves.
President Donald Trump’s 2021 budget set aside $US150m ($224m) to purchase uranium from US mines to create a national reserve.
Investors certainly agreed with this sentiment, with shares doubling at one point to 1.4c before settling at 1.3c.
Thor will pay $100,100 in cash and shares to secure the exclusive option to acquire American Vanadium.
The company has wholly owned interests in 199 contiguous claims (the Wedding Bell and Radium Mountain projects) in the famed Uravan Mineral Belt in southwestern Colorado and 100 claims (Vanadium King project) in southeastern Utah.
The Uravan Mineral Belt has been an important source of uranium and vanadium in the US for more than 100 years, producing more than 85 million pounds of uranium and over 660 million pounds of vanadium.
Average production grades from the 1940s to January 1979 are reported to be 0.25 per cent uranium and 1.29 per cent vanadium.
Should its due diligence work be satisfactory, Thor can acquire the company by issuing $144,000 worth of shares and future payments of performance rights for the issue of up to 102 million shares over three stages on the achievement of project milestones.
The company is also raising a total of $970,000 to fund exploration at the new US uranium and vanadium projects, invest further in EnviroCopper with the goal of drill testing the gold potential at Kapunda as well as follow up field work at its Pilbara project, where visible gold and anomalous nickel have been encountered in early work.
This consists of a $700,000 placement of new shares priced at 0.5c each while the company’s largest shareholder, Metal Tiger, has agreed to acquire $130,000 worth of shares in a conditional placement subject to shareholder approval and to invest a further $120,000 on the same terms.
Company directors Mick Billing and Richard Bradey have also committed to investing $10,000 each in the conditional placement.
Billing told Stockhead that early due diligence work carried out by the company had been positive.
“We liked the look of this. It is an opportunity, we believe, to get into some relatively high-grade uranium and vanadium deposits in the US in an area that is in very close proximity to an existing uranium and vanadium processing plant that has historically taken ore from third parties for toll treatment,” he explained.
All three projects are located within trucking distance of Energy Fuels’ White Mesa mill, the only fully licensed and operational uranium and vanadium processing plant in the US that has substantial available capacity for toll treating.
“That obviously lowers the environmental and financial hurdles to get into production,” Billing added.
“It doesn’t mean there is none, but you don’t have to try and licence a tailings dam, processing plant and you don’t have to finance those things to get the operation into production.”
Billing noted that the Utah claims had been drilled by the mineral division of Hunt Oil back in the early 80s and while that was before the establishment of JORC standards, Hunt Oil had nonetheless made an internal estimate of over 5 million pounds of uranium and over 6 million pounds of vanadium.
“Not particularly high-grade but it is certainly enough to say this is worth following up,” Billing said.
He added that the 199 claims in Colorado contained historical adits where some of the material had obviously been mined out.
“They were being mined until about 1981 and then the price of uranium fell through the floor as happens from time to time with all commodities and they stopped,” Billing explained.
“Not because they ran out of ore but because the price at the time made it uneconomical.”
Thor has engaged a Colorado-based team to commence a sampling program from the historical mines around Wedding Bell and Radium Mountain along with other due diligence activities.
Billing says the work includes searching records for environmental issues and historical data.
He also noted that uranium demand appeared to be on an upward trajectory while operations had been suspended at several major projects.
COVID-19 has been blamed for Cameco suspending production at its flagship Cigar Lake project, while Kazatomprom, the world’s largest uranium producer, ceased production at all its projects for a three-month period to slow the spread of the virus.
“There are new nuclear reactors being built right now, one or two in the US, a bunch in China some in various different parts of Asia that will all require uranium fuel,” Billing said.
“Some of these will obviously take a while to construct and that’s acknowledged but the uranium industry is not going away.”