Sunday 25th September 2016

Resource Clips


Athabasca Basin and beyond

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Hathor alumni reunite at NexGen

Showing some consistency in its hiring policy, NexGen Energy TSXV:NXE named Andriyko Herchak chief financial officer on May 31. Herchak held the same position with Hathor Exploration until Rio Tinto completed its $654-million takeout in 2012. During his five years of CFO-ing for Hathor the company “raised $100 million and acquired its major joint venture partners to consolidate ownership of its assets,” NexGen stated.

The previous week NexGen appointed two other former Hathorites who were also, by the way, ex-Rio people. They joined other Rio vets like NexGen directors Christopher McFadden and James Currie. The Roughrider deposit that Rio acquired from Hathor shows 17.2 million pounds U3O8 indicated and 40.7 million pounds inferred. NexGen’s flagship is its 70% earn-in on the Radio project, adjacent to Roughrider.

Private placements: Denison closes $14.95 million, Energy Fuels offers $5 million, Aldrin offers $1 million

The Basin will get another $14.95 million of work with the closing of a private placement announced May 28 by Denison Mines TSX:DML. The company flogged 11.5 million flow-through shares at $1.30 a pop in a bought-deal offer first announced May 9.

United States producer Energy Fuels TSX:EFR announced a $5-million bought-deal private placement on May 31. The deal offers 35.71 million units at $0.14, with each unit comprising a share and one-half warrant. Each whole warrant will be exercisable for $0.19 for two years. The underwriters may increase the offering by 15%. The previous week Energy Fuels announced a letter of intent to acquire Strathmore Minerals TSX:STM, which would create one of the largest uranium companies operating in the U.S.

In addition to announcing participation in the joint airborne survey, Aldrin’s May 28 statement opened a non-brokered private placement of up to 12.5 million units at $0.08 per unit for $1 million. Each unit consists of one share and one-half warrant. Each whole warrant will be exercisable for a year at $0.18.

Cameco, AREVA, natives sign agreement potentially worth $600 million

Cameco Millennium drilling

A lawsuit against Cameco’s Millennium project has been dropped following an agreement with the company, AREVA Resources Canada and the
English River First Nation.

Two years of negotiations ended in a signing ceremony that could bring a Saskatchewan native band $600 million over 10 years. On May 31 Cameco, AREVA Resources Canada and the English River First Nation announced a collaboration agreement that will “formalize how benefits from uranium mining will be shared with the ERFN community.”

The 1,400-member band will benefit mostly through business contracts and wages, the three parties stated. But “companies will also provide a signing bonus, milestone payments and annual community investment payments based on mine production for ERFN community development initiatives.”

The potential figure of $600 million is based on Cameco’s and AREVA’s existing Saskatchewan operations and “could be significantly higher if planned projects such as the Millennium mine are developed.” Cameco has a 69.9% interest in the southeastern Basin JV, with Japan Canada Uranium (JCU) holding the remainder. Under the collaboration agreement, the ERFN will drop a lawsuit opposing the project.

WRIC 2013 buzzes with uranium talk

Uranium proved a hot topic at Vancouver’s World Resource Investment Conference 2013 on May 26 and 27. The commodity was the subject of bullish comments from Rick Rule, a promotion by Casey Research and corporate presentations by Fission, UEX Corp and Lakeland Resources TSXV:LK, while Blue Sky Uranium TSXV:BSK and Skyharbour hosted booths. Click here for an article about energy metals expert Chris Berry discussing emerging markets, uranium and the Basin.

J.P. Morgan reduces price forecasts but remains optimistic

Higher uranium prices are coming but, until 2016, they won’t be as high as previously forecast, said J.P. Morgan. A May 30 Financial Post story reported the institution’s newest spot price predictions:

  • $43 per pound in 2013 (previously forecast at $46)
  • $58 in 2014 (previously $60)
  • $70 in 2015 (previously $90)
  • $90 in 2016 (previously $70).

The FP quoted metals and mining analyst Tyler Langton, who said this year’s end of the megatons-to-megawatts agreement “will likely result in a significant price spike with new mine supply requiring time to catch up after two years of project deferrals…. We continue to believe that prices of around US$80 per pound are needed to incentivize new supply that will be needed to meet slowly rising demand and make up for the expiration of the HEU agreement at the end of 2013.”

The May 27 spot price was $40.50, according to the Ux Consulting Company.

AREVA undeterred by terrorism in Niger

AREVA has reaffirmed its commitment to uranium mining in Niger despite the terror bombing of its Somair mine, the Voice of America reported on May 31. One employee died and 14 were injured in a May 23 blast that destroyed the operation’s grinding units. At least 24 soldiers died in a simultaneous attack on a military barracks in the same region.

“One of the two al-Qaida-linked militant groups that carried out the attack in Niger also hit a European-operated natural gas plant in Algeria in mid-January, killing at least 37 hostages,” the VOA stated. “There is concern that militants will continue to target high-value economic targets in the region.”

The French government owns a majority stake in AREVA. France’s 58 nuclear reactors generate about 75% of the country’s electricity, the VOA added, with a quarter of the country’s uranium coming from AREVA’s two Niger mines. According to the World Nuclear Association, those mines produce 7.5% of global supply.

Somair could be offline for up to nine months, while an even larger Niger mine might see further delays beyond its planned 2015 opening. The risk “will likely mean tighter security at work sites and hikes in insurance premiums for companies operating in the region,” the VOA explained. “But analysts don’t expect that to dampen investment in the oil, gas and mining sectors.”

Uranium and potash drive Saskatchewan investment

Some lagging mega-projects notwithstanding, the Saskatchewan Mining Association maintains the industry will invest $50 billion in the province between 2008 and 2028. On May 28 the Regina Leader-Post quoted SMA president Steve Fortney, who said growing demand for food and energy bodes well for Saskatchewan’s potash and uranium sectors.

He added that recent changes to the province’s royalties system will further encourage exploration and development.

See previous uranium news updates from the Athabasca Basin:

Read about uranium supply, demand and prices.

Disclaimer: Skyharbour Resources is a client of OnPage Media Corp, the publisher of ResourceClips. Neither OnPage Media nor its owner hold a stock position or options in Skyharbour Resources.

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