With approvals and cash in the bag, Norfolk’s path to uranium drilling at Orroroo is now clear
Special Report: Norfolk Metals is all set to start maiden drilling at its Orroroo uranium project after securing approval from the South Australian Department of Energy and Mining.
The timing is exquisite given that uranium prices have now surged past the US$80/lb mark for the first time in over 15 years, neatly meeting the price point that some say is the incentive needed to avoid a uranium shortage this decade.
It is also likely to trigger a flurry of activity over both mothballed and new uranium projects.
Projects such as Norfolk Metals’ (ASX:NFL) 659km2 Orroroo project over the Walloway Basin, which has never been explored for uranium despite having sediments with the same age as sediments from the Frome Embayment, which hosts several commercial deposits such as Honeymoon and Four Mile.
However, the company is not going into the project blind with uranium peaking at 650 parts per million in one of the historical coal drill holes tested February this year and all three of the historical coal holes tested delineated uranium presence.
Additionally, expert uranium geologist Mark Couzens – who will lead the first phase of drilling – has also defined a paleochannel model that opens up more than 20km of prospective uranium mineralised palaeochannel targets.
NFL has liaised with Watsons Drilling to contract the most suitable drill rig for an expedited program.
This is expected to be the Bourne 1000THD rig, the same model that is currently used by $230m capped Alligator Energy (ASX:AGE), as it can drill up to one hole a day while allowing time for downhole logging and grout/remediation work.
NFL says it is committed to drill as many metres as can be achieved while following all guidelines and safety procedures in this phase one pre-Christmas drilling program.
Results from this program will be reviewed and interpreted prior to subsequent exploration activities commencing along with further community and stakeholder engagements.
Professional and sophisticated investors have also demonstrated their confidence in the company’s plans amidst the positive sentiment for uranium by oversubscribing for a strategic placement of 5 million shares priced at 20c to raise $1m.
This was cornerstoned by several of the current major shareholders.
Proceeds from the placement will be used primarily for exploration at Orroroo.
“We are pleased to announce the company has secured additional capital via firm commitments in a placement corner stoned by our loyal major shareholders,” executive chairman Ben Phillips said.
“This strategy strengthens our structure and ensures we give the Orroroo project the best possible opportunities for success”.
This article was developed in collaboration with Norfolk Metals, 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.