Special Report: TNT Mines has signed the formal agreement to acquire the high-grade East Canyon uranium-vanadium project in Utah and is poised to explode into action in June.

This comes after the company completed due diligence on Vanacorp Aust Pty Ltd and the 200 unpatented lode claims that collectively make up the East Canyon project.

A review of further historical exploration results will be fast tracked ahead before TNT Mines (ASX:TIN) proceeds with the initial exploration program of sampling and mapping of priority targets.

“We will now proceed with planning for the initial program of exploration following up on the high-grade samples collected in recent fieldwork and the noted occurrences of visible mineralisation in historic workings on the property,” executive director Brett Mitchell said.

“This exploration will not be expensive and will be comfortably funded through the company’s existing cash reserves.”

East Canyon features numerous historic workings — including the None Such Mine — within the Dry Valley/East Canyon mining district that is in the wider Uravan Mineral Belt, an important source of uranium and vanadium ore in the US for more than 100 years.

Many of the workings remain open and appear to be in good condition, with samples collected by Vanacorp over 2018 and 2019 returning results of up to 0.47 per cent uranium and 9.21 per cent vanadium with multiple occurrences of visible mineralisation.

The project is also within trucking distance of TSX-listed Energy Fuels’ White Mesa mill, the only fully licensed and fully operating conventional uranium/vanadium mill in the US.


Uranium demand

TNT’s move to acquire East Canyon and start exploration might be timed just as the uranium sector makes what is looking increasingly like a revival.

While uranium spot prices took a short breather in mid-May, the impact of COVID-19 supply disruptions sent prices up more than 35 per cent prior to that.

Prices have since resumed their upward tick on renewed concerns about uranium supply.

S&P Global Platts senior managing editor William Freebairn noted that uranium demand remained “relatively inelastic” regardless of production declines as the end users were nuclear plants that typically operated at full power.

He added that uranium must be secured up to two years before it is needed in a reactor, so a steady supply was needed even during tough economic times.

TNT Mines’ Mitchell expressed his belief that the COVID-19 pandemic was the catalyst sparking a turning point in uranium demand and pricing.

“COVID-19 was the catalyst which led Cameco to suspend production at its flagship Cigar Lake, which could take out ~10 per cent of global supply while Kazatomprom also announced it would be lowering production at their properties,” he told Stockhead.

“So with large-scale supply disruptions, supply deficits, inventory being depleted, new reactors coming online, US government initiatives, and utilities the most under-contracted in decades, I believe we are entering a perfect storm for a large sustained move in uranium prices.”


This story was developed in collaboration with TNT Mines, 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.