Uranium prices are well positioned to rise further in 2023 as nuclear energy continues to regain favor, according to industry experts. In the midst of an energy crisis exacerbated by the Ukraine war, countries such as Japan, France, South Korea, India, the United Kingdom, and the United States, have announced new nuclear power projects as well as increased incentives and funding. According to Goviex Uranium CEO, Daniel Major, demand will rise while supply will remain tight. In the first two weeks of the year, spot uranium rose from $48.66 per pound to above $50, while long-term contract pricing continued to grow, hitting $53 per pound. . According to Rick Rule, Kazakhstan may provide some additional supply, but at a new price of about $70 per pound. The seasoned investor says the outlook for the next 10 years is also bright. The regained interest in nuclear energy is exciting news for uranium mining companies like Fission Uranium Corp. (TSX:FCU) (OTCQX:FCUUF), NexGen Energy (TSX:NXE) (NYSE:NXE), Cameco (TSX:CCO) (NYSE:CCJ), Denison Mines (TSX:DML) (NYSE-A:DNN), and Energy Fuels Inc. (TSX:EFR) (NYSE-A:UUUU).
Fission Uranium Corp. (TSX:FCU) (OTCQX:FCUUF) is a Canadian uranium project developer focused on the development of its advanced Patterson Lake South (PLS) uranium project, comprising a proposed high-grade mine and mill, in Canada’s world-class Athabasca Basin.
The company just commenced a winter program to advance its PLS property by conducting geotechnical testing of key areas identified in the Feasibility Study (FS), including mill locations and proposed stockpiles. The company will also be drilling five holes to guarantee groundwater models for portions of the R780E zone are accurate.
Fission Uranium also announced that it has staked a new 11,148-hectare property in the western Athabasca Basin. The West Cluff property is a high-grade uranium prospect located 75 kilometers north of its flagship PLS project and less than three kilometers west of the former Cluff Lake mine.
“With the superb results of our feasibility study (FS) now in hand, we will continue to develop our PLS uranium project at a strong, steady pace,” said Ross McElroy, President and CEO for Fission. “As we move towards the Environmental Impact Statement, we will also be carrying out a number of work programs, including this new round of geotechnical drilling for the mine and mill facilities.”
The January 2023 Feasibility Study highlighted greatly enhanced economic potential of Fission Uranium’s PLS property, including a longer mine life of 10 years, significantly increased after-tax NPV of $1.204 billion at 8% discount, and a higher after-tax IRR of 27.2% that still offers a very low OPEX of C$13.02 per pound, which is less than US$10 per pound. The construction timeline is set at three years with initial capital cost of $1.155 billion being marginally lower (2%) than the Pre-Feasibility Study.
Uranium Miners Expand Operations to Meet Rising Demand
NexGen Energy (TSX:NXE) (NYSE:NXE) has started an expanded 2023 exploration program to follow-up on positive results from the 2022 exploration drill program and test prospective areas identified by detailed 2022 geophysical surveys. In addition, NexGen has scheduled a significant geophysical program in 2023 for the production of drill targets throughout high priority areas of NexGen‘s mineral tenure (SW1, SW2, and SW3) in Saskatchewan’s southwest Athabasca Basin. As part of Ideon Technologies’ early access programme for the first use of new muon detection instrumentation in boreholes, cosmic ray muon tomography, which is included in the geophysical program, will start in 2022 on NexGen‘s 100% owned Rook I site.
Cameco (TSX:CCO) (NYSE:CCJ) recently announced results for 2022. The company’s strong market fundamentals are captured in record long-term contracting of 80 million pounds uranium and 17 million kgU of conversion services. Cameco has a controlled return to tier-one run rate with exposure to increasing prices. The company secured a record amount of contracts in 2022 in its uranium division, adding 80 million pounds to its portfolio of long-term uranium contracts. About 58 million pounds have been concluded under contracts, with the remaining 22 million pounds accepted with important commercial terms such as pricing mechanism, volume, and tenor agreed to but still awaiting contract finalization. Cameco also has a sizable and expanding uranium business pipeline under consideration.
Denison Mines (TSX:DML) (NYSE-A:DNN) has reported that the neutralization phase of the Phoenix in-situ recovery (ISR) Feasibility Field Test (FFT) at the Company’s 95% owned Wheeler River project has been completed successfully. According to the necessary regulatory permissions for the FFT, monitoring well sampling at the FFT site has verified the effective restoration of the Leaching Zone to pH levels that are acceptable to the environment. The neutralization phase began in mid-October 2022, following the highly successful completion of the FFT’s leaching phase, and was intended to confirm certain environmental assessment assumptions as well as to verify the efficiency and effectiveness of the neutralization process planned for ISR mining at Phoenix.
On February 15, Energy Fuels Inc. (TSX:EFR) (NYSE-A:UUUU) announced the completion of the sale of three wholly-owned subsidiaries holding Energy Fuels’ Alta Mesa ISR Project to enCore Energy Corp. for a total consideration of $120 million. Furthermore, immediately after the Closing, enCore is obliged to replace the existing reclamation bonds for the Alta Mesa project, which will result in Energy Fuels obtaining an extra $3.6 million cash as a return of collateral from those bonds. The Purchase also saves the Corporation approximately $2 million per year in Alta Mesa holding fees. The Transaction provides Energy Fuels with considerable extra liquidity and working capital, allowing the company to increase its industry-leading uranium and rare earth element (REE) production in the United States while avoiding shareholder dilution. Plus, through potential conversion into enCore common shares, the Note provides Energy Fuels with significant exposure to uranium market upside.
Fission Uranium recently took part in the Pre-PDAC 2023 Mining Showcase hosted by Red Cloud. The Sheraton Centre Toronto Hotel hosted the annual conference in person on March 1-2, 2023. The company was also present at this year’s PDAC conference March 5-8.
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