After years of ebb, millions of dollars are flowing into the exploration and development of new uranium deposits. Despite uranium prices holding stable at low levels, one can sense the start of a new exploration and discovery boom, however limited to the Athabasca Uranium Basin in Canada. And there is a reason for that.
The Athabasca Basin is a class of its own
Without a doubt, the Athabasca Basin is on the way to becoming the point of call for future uranium supply. Already today, it is home to both the world’s largest and richest uranium mines: McArthur River and Cigar Lake. While the worldwide average mining grade is between 0.10% to 0.15% U3O8, Athabasca’s mines operate with grades of around 20%. The difference is a factor of 200. This geological distinctiveness, coupled with the stable mining jurisdiction of Canada, is the fundament of the Athabasca Basin’s special position in the world making it the place to be for both investors and mining companies.
New uranium exploration methods are boosting the success rates
Uranium has been searched for in the Athabasca Basin since more than 60 years, however it was during the last decade only that the distinct geology and genesis of these types of uranium deposits were better understood. At the same time, the classic exploration techniques were fine-tuned so strongly with innovative high-tech that downright quantum leaps were made. The initial new discoveries happening around the Athabasca Basin since 2000 prove that case.
The most recent sensations about the exploration successes of Fission Uranium Corp (CVE:FCU) (OTCMKTS:FCUUF) and Nexgen Energy Ltd (CVE:NXE) would have not been made without the improved exploration methods that are in action since a few years only. A festival for its shareholders: After their spectacular discovery, Fission jumped to a market valuation of more than $400 million – virtually overnight. NexGen, which is at an earlier stage of exploration, already enjoys a market cap of $60 million. Behind Lakeland Resources Inc. (CVE:LK) (OTCMKTS:LRESF) are the same people that were originally involved with the discovery of Fisson’s Patterson Lake South Deposit. Lakeland owns 14 properties in the Athabasca Basin, whereas one has been optioned to a joint venture partner. On this property, one of the largest drill programs in the entire Athabasca Basin will start in a few weeks.
Learn with this Rockstone Report first-hand from an expert who knows the reasons, and calls a spade a spade, why the Athabasca Basin hosts some more major uranium deposits that are just waiting to be discovered: Project Geologist Neil McCallum from Dahrouge Geological Consulting Ltd. explains imposingly in an exclusive interview on what investors should pay attention to when looking at potentially prospective properties. With such information you may put any uranium explorer under the microscope yourself and come to the same conclusion as we do.
In our most recent article “Uranium is Ready to Roar Back”, we presented our highlights of fundamentals that we anticipate to dominate the uranium market in the upcoming years and that substantially higher uranium prices are on the horizon.
As laid out, the Canadian Athabasca Basin is the place to be for future uranium supply. That is the reason why foreign mining companies like Rio Tinto plc (ADR) (NYSE:RIO) have been forcefully trying to put a foot in that door during the last few years. The Athabasca Basin is home to the largest and highest grade uranium mines in the world, however most importantly, it is still largely underexplored and hosts many deposits yet to be discovered.
“I think we’re going to have more investment in Canada, more mines being developed, especially in the Athabasca area. That investment will inevitably lead to quicker production from Athabasca and other Canadian uranium sources that are dotted across the country.” (Thomas Drolet in an interview with The Energy Report on December 3, 2013)
As the last uranium price boom cycle showed, it is the junior/exploration companies that appreciate the most as it was the case with JNR Resources Inc. (CVE:JNN) (OTCMKTS:JNRRF) and senior Cameco Corp. for instance:
JNR was taken over by Denison Mines Corp. (TSE:DML) (NYSEMKT:DNN) in November 2012. In May 2012, JNR started drilling its Black Lake Project located along the north rim of the Athabasca Basin (approx. 20 km southeast of Stony Rapids). Richard Kusmirski, former President & CEO of JNR, was involved with JNR since 1999 and was previously the exploration manager for Cameco Corporation (NYSE:CCJ) (TSE:CCO)’s uranium projects in the Athabasca Basin for 15 years managing all their exploration activities. He directed the exploration program that led to the discovery of the Maverick Zone on the Moore Lake joint venture with Kennecott.
Today, Rick Kusmirski sits in the Advisory Board of Lakeland Resources Inc., a new entrant in the Athabasca Uranium Basin that we follow closely and which company we consider as a prime example in the Athabasca Basin’s exploration space of today, or as Rick himself once emphasized that he calls it – what is necessary to be successful in the Basin – the 3 P’s:
“People, Properties & Partnerships”
Below we will look into each of these 3 aspects more closely, yet we would like to add one more point at this stage, namely Structure: Without the right structure of a company and its shareholders, an explorer may have all 3 P’s in place in an outstanding manner – yet when it does not have the right structure, it will likely be taken out by seniors for peanuts, and thus not creating shareholder value to the maximum amount.
We are convinced that Lakeland has been structured diligently to create maximum shareholder value, and the company has all 3 P’s into place in an unparalleled fashion. We will look first into the aspect of a prospective property which includes an exclusive interview with Neil McCallum, Project Geologist with Edmonton-based Dahrouge Geological Consulting Ltd.
To read the full research report please download the PDF with the following link:
Link to Live Chart (15min delayed): http://scharts.co/1kbTbEk
On a side note: Mining Analyst Stephan Bogner will be attending the world’s largest mining exhibition PDAC in Toronto next week. On the agenda is a visit at Zimtu Capital Corp. (CVE:ZC) to find out more what this project generator has in its current pipeline. We will report in due course with a research report.
DISCLAIMER: Neither Rockstone Research Ltd. nor the author was remunerated by Lakeland Resources Inc. to produce or publish this content. However, the author holds shares of Lakeland Resources Inc. and therefore would financially benefit from volume and price appreciation. The author may buy or sell securities of the featured company at any time, without notice to the market. Please read the full disclaimer in the PDF and on www.rockstone-research.com as none of this content is to be construed as an “investment advice”.