by Greg Klein
Thirty-six years in key positions give Mark Lackey a well-rounded perspective on the uranium sector. Added to that is an investor’s outlook gained by experience in the brokerage industry. A prolific media commentator—with over 300 TV appearances—he’s frequently asked to discuss commodities, often focusing on uranium trends and uranium companies. Lackey spoke with ResourceClips.com on October 26, the day he joined ALX Uranium TSXV:AL as president/CEO/director.
Lackey has served as Bank of Canada economist responsible for U.S. economic forecasting and senior commodities manager at the Bank of Montreal. Stints with Gulf Canada, a uranium producer like many other oil companies of the time, and Ontario Hydro, a major uranium consumer, enhanced his supply/demand insight.
That uranium career includes his 16 years in the brokerage industry, serving with Brawley Cathers, Blackmont Capital, Hampton Securities and Pope & Company. More recently he’s been executive VP at CHF Investor Relations and technical adviser at Presmont Group.
To those who watch uranium, its underachieving price hasn’t just been an ongoing disappointment. It’s a source of frustration to those who’ve made bullish forecasts. Lackey has been less surprised than others, however.
“I spoke at a conference last year and might have been the only one who thought uranium was actually going to go down this year,” he recalls. “It did go down, but way more than I thought, which was about $29 or $28. I thought everybody else was too optimistic about Japan restarting all the units and we’ve seen excess supply coming out of places like Kazakhstan. So the weakness this year didn’t surprise me.”
History gives him a sense of perspective, not to mention optimism. “I’ve seen this from $8 in the late ’90s to $136 in 2007. It fell during the 2008 recession, then came back nicely to $72 in 2011, the day Fukushima was hit. So we’ve had some big moves both ways over the years but now we’re down to a price that’s not sustainable. How many new mines would you get at these prices? I can’t think of too many unless you find something huge in the Basin, because high-volume, low-grade projects in many other places have people looking for $50 to $60—not $21.”
He sees a number of price catalysts over the next few years: increased buying from utilities, a possible reduction in Kazakhstan supply, Japanese restarts and nuclear expansion elsewhere.
Kazakhstan provided 39% of world supply last year (compared with Canada’s 22%). But Lackey wonders whether low prices will force the global leader to cut output. Kazakhstan has been disregarding a 2011 self-imposed production cap of 20,000 tonnes per year, the World Nuclear Association states. WNA data attributes last year’s output to 23,800 tonnes.
As for Japan, it “will have to do something ultimately,” Lackey maintains. “There are 51 of the 54 reactors idled, that’s six or seven billion dollars a plant, roughly three or four hundred billion dollars of infrastructure. Thirty of the units have been tested positively. There are political concerns and the closer you are to Fukushima the more difficult it would be to restart them, but southern Japan doesn’t seem to have the same anti-nuclear view. Japan’s burning a lot of coal, they’re burning LNG and I hear from my sources that there are brownouts and blackouts. You can’t have that in an industrial country.”
Japan’s restarts would have a symbolic effect. But it is, after all, just one country. “There are about 60 plants under construction around the world right now, and more and more of them are coming into play,” Lackey points out.
“It’s cleaner than most baseload sources and relatively cheap. The planet has 1.2 billion people with no power and another two billion with just intermittent power.”
As someone who’s been watching uranium companies for 36 years, I’ve seen it’s the team you have, the projects you have and the jurisdiction you’re in.—Mark Lackey,
president/CEO of ALX Uranium
Although near-term price scenarios can certainly influence investors, there are other priorities in assessing junior explorers. “As someone who’s been watching uranium companies for 36 years, I’ve seen it’s the team you have, the projects you have and the jurisdiction you’re in. My favourite jurisdiction’s been the Athabasca Basin. It’s got the highest grades and Saskatchewan’s a great province to work in.
“I follow the companies in this space and I can see that ALX has a very strong board, management and technical staff,” he adds. “I’m extremely bullish about uranium and extremely excited about working with such an impressive team. It’s a great opportunity and I’m glad to be part of it.”
Lackey replaces Jon Armes, who steps down to pursue other opportunities but stays on as a consultant. During his six years of leadership at ALX and its predecessor Lakeland Resources, Armes helped build one of the Athabasca Basin’s largest and most prospective uranium exploration portfolios. Most recently he negotiated the Hook-Carter transaction that benefits ALX with the budget and experience of Denison Mines TSX:DML.
This story has been expanded and moved here.
by Greg Klein | October 13, 2016
ALX Uranium TSXV:AL gets 7.5 million shares of Denison Mines TSX:DML, retains a 20% stake in the Hook-Carter project and has its portion of $12 million in spending covered as Denison moves into the southwestern Athabasca Basin. Under a deal announced October 13, Denison becomes project operator, bringing its expertise to the 16,805-hectare property in the Patterson Lake South region.
“This is elephant country—a large property that has seen very little drilling on a geological trend with a precedent for large and high-grade uranium deposits,” commented Denison VP of exploration Dale Verran.
“The Hook-Carter property is uniquely situated on the Patterson Lake corridor, offering potential for both basement-hosted deposits, similar to Triple R and Arrow, and unconformity-hosted deposits which remain the largest and highest grade in the Athabasca Basin, namely McArthur River and Cigar Lake which are both operating mines. With Athabasca sandstone thicknesses similar to the Wheeler River project, the property plays to our team’s strengths and we are very excited to get started with exploration in 2017.”
So far Hook-Carter has undergone just eight historic holes, five of them on the property’s 15 kilometres of the Patterson Lake conductive corridor, which hosts Fission Uranium’s (TSX:FCU) Patterson Lake South, NexGen Energy’s (TSX:NXE) Rook 1 and Hook Lake, a joint venture of Purepoint Uranium TSXV:PTU, Cameco Corp TSX:CCO and AREVA Resources Canada. Hook-Carter also features additional potential along significant sections of the Derkson and Carter corridors.
Subject to approvals, Denison’s work requirement calls for $3 million over the first three years. Should the company fail to meet the commitment, ALX’s stake in the property increases from 20% to 25%. Additionally, Denison funds ALX’s portion of the first $12 million in spending. The companies plan a JV three years after closing the agreement.
“Denison has made a number of world class uranium discoveries within the Athabasca Basin and, given their experience, we believe that they will advance the project diligently and methodically,” said ALX president/CEO Jon Armes. “Knowing that Hook-Carter will see considerable exploration efforts over the next 36 months, the company will focus on exploration at its other high-quality exploration projects in and around the shallow margins of the Athabasca Basin, which include Gorilla Lake, Newnham Lake, Gibbon’s Creek and Lazy Edward Bay.”
by Greg Klein | August 9, 2016
This month has ALX Uranium TSXV:AL returning to two projects at opposite ends of Saskatchewan’s prolific Athabasca Basin. On the Basin’s northern margin, the Perch property undergoes ground gravity while the Hook-Carter project in the Patterson Lake South camp gets both gravity and drilling, the company announced August 9.
The 1,682-hectare Perch offers shallow targets along a four-kilometre-long conductor and coincident magnetic low running through the central area of the property. The 470-station gravity survey will consist of 24 900-metre lines at 100-metre spacing perpendicular to the conductor. Work begins in about a week with the crew heli-commuting from the community of Stony Rapids, 65 kilometres west.
At 16,458 hectares, Hook-Carter features northeastern extensions of three known conductive corridors, Carter, Derkson and Patterson Lake. The latter hosts at least seven discoveries on three properties, Fission Uranium’s (TSX:FCU) Patterson Lake South, NexGen Energy’s (TSX:NXE) Rook 1 and the Hook Lake JV of Purepoint Uranium TSXV:PTU, Cameco Corp TSX:CCO and AREVA Resources Canada. Cameco recently enlarged another property it holds bordering Hook-Carter to the northeast.
ALX now plans gravity on two areas over the Patterson corridor and one over Derkson. Weather permitting, up to two holes will follow on each of the corridors.
Previous geophysics show the Patterson corridor extending at least 12.7 kilometres along Hook-Carter, with depth to the sub-Athabasca unconformity estimated between 320 and 500 metres.
Derkson runs about 5.8 kilometres on the property, with the unconformity estimated to be 350 to 470 metres below surface. An historic hole on the corridor about 4.5 kilometres south of Hook-Carter found 0.24% uranium and 1.35% nickel over 2.5 metres in basement rocks about five metres below the unconformity.
The Carter corridor has undergone historic geophysics but remains relatively unexplored. Two separate portions of the corridor run through the property, each for about two kilometres of strike.
Plans for the Patterson and Derkson corridors follow a recent audio-magnetic transient EM survey as well as a study of the distribution of geochemical and radiochemical signatures against interpreted litho-structural features. As a result, the three priority targets were chosen.
ALX also announced an LOI to vend its Mikwam gold property to Galena International Resources NEX:GTO.H. The price tag comes to $20,000, two million shares and a 0.5% NSR, half of which Galena may buy for $1 million.
Last month ALX announced Lon Shaver’s appointment to its advisory board. His nearly 20 years of mining sector experience includes investment banking roles with Raymond James, Merrill Lynch Canada and Midland Walwyn Capital. Shaver has also held CFO positions with a publicly listed mining company and a private technology company.
In June ALX closed the second tranche of a private placement totalling $750,000, part of a strategic partnership with Holystone Energy. That month ALX also closed the final tranche of a separate private placement totalling $348,750.
With a number of active projects in its large, highly prospective portfolio, ALX reported highly anomalous radon values at its Lazy Edward Bay project on the Basin’s southeastern margin in April. The previous month preliminary geophysical results showed gravity lows on the company’s 80%-held Gorilla Lake project on the Basin’s west side.
by Greg Klein
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“There’s excitement in the air,” said Cambridge House International founder Joe Martin. That’s the mood he senses as junior explorers emerge from the downturn. And certainly optimism was evident on June 14 as more than 450 people converged on the Vancouver Commodity Forum for an afternoon of expert talks amid a showcase of two dozen companies. Keynote speakers included Martin, Chris Berry of the Disruptive Discoveries Journal, Jon Hykawy of Stormcrow Capital, John Kaiser of Kaiser Research Online and Stephan Bogner of Rockstone Research.
Lithium, not surprisingly, stood out as a commodity of interest. While cautioning against over-enthusiasm for the exploration rush, Berry and Hykawy each affirmed the need for juniors to find new sources of the metal. Cobalt and scandium featured prominently too, as did other commodities including what Kaiser called “the weird metals”—lesser known stuff that’s vital to our lives but threatened with security of supply.
Kaiser also noted he was addressing a crowd larger than his last PDAC audience, another indication that “we’ve turned the corner.”
Attendees also met and mingled with company reps. Potential investors learned about a wide gamut of projects aspiring to meet a growing demand for necessities, conveniences and luxuries.
Presented by Zimtu Capital TSXV:ZC, the forum’s success will make it an annual event, said company president Dave Hodge. Berry emceed the conference, holding the unenviable task of “making sure Dave stays well-behaved.”
Read interviews with keynote speakers:
Meet the companies
Most companies were core holdings of Zimtu, a prospect generator that connects explorers with properties and also shares management, technical and financing expertise. Zimtu offers investors participation in a range of commodities and companies, including some at the pre-IPO stage.
After sampling high-grade lithium on its Hidden Lake project in the Northwest Territories earlier this month, 92 Resources TSXV:NTY plans to return in mid-July for a program of mapping, exposing spodumene-bearing pegmatite dykes, and channel sampling. The company closed the final tranche of a private placement totalling $318,836 in April. Hidden Lake’s located near Highway 4, about 40 kilometres from Yellowknife and within the Yellowknife Pegmatite Belt.
With one of the Athabasca Basin’s largest and most prospective exploration portfolios, ALX Uranium TSXV:AL has a number of projects competing for flagship status. Among them is Hook-Carter, which covers extensions of three known conductive trends, one of them hosting the sensational discoveries of Fission Uranium TSX:FCU and NexGen Energy TSXV:NXE. ALX’s strategic partnership with Holystone Energy allows that company to invest up to $750,000 in ALX and retain the right to maintain its ownership level for three years. ALX closed a private placement first tranche of $255,000 last month, amid this year’s busy news flow from a number of the company’s active projects.
Arctic Star Exploration TSXV:ADD boasts one of northern Canada’s largest 100%-held diamond exploration portfolios. Among the properties are the drill-ready Stein project in Nunavut and others in the Lac de Gras region that’s the world’s third-largest diamond producer by value. North Arrow Minerals TSXV:NAR holds an option to earn up to 55% of Arctic Star’s Redemption property.
Aurvista Gold TSXV:AVA considers its Douay property one of Quebec’s largest and last undeveloped gold projects. The Abitibi property has resources totalling 238,400 ounces of gold indicated and 2.75 million ounces inferred. Now, with $1.1 million raised last month, the company hopes to increase those numbers through a summer program including 4,000 metres of drilling. Douay’s 2014 PEA used a 5% discount rate to forecast a post-tax NPV of $16.6 million and a post-tax IRR of 40%.
Looking for lithium in Nevada, Belmont Resources TSXV:BEA now has a geophysics crew en route to its Kibby Basin property, which the company believes could potentially host lithium-bearing brines in a similar geological setting to the Clayton Valley, about 65 kilometres south. Results from the gravity survey will help identify targets for direct push drilling and sampling.
A mineral perhaps overlooked in the effort to supply green technologies, zeolite has several environmental applications. Canadian Zeolite TSXV:CNZ holds two projects in southern British Columbia, Sun Group and Bromley Creek, the latter an active quarrying operation.
With a high-grade, near-surface rare earths deposit hosted in minerals that have proven processing, Commerce Resources TSXV:CCE takes its Ashram project in Quebec towards pre-feasibility. The relatively straightforward mineralogy contributes to steady progress in metallurgical studies. Commerce also holds southeastern B.C.’s Blue River tantalum-niobium deposit, which reached PEA in 2011 and a resource update in 2013.
Permitted for construction following a 2014 PEA, Copper North Mining’s (TSXV:COL) Carmacks copper-gold-silver project now undergoes revised PEA studies. The agenda calls for improved economics by creating a new leach and development plan for the south-central Yukon property. In central B.C. the company holds the Thor exploration property, 20 kilometres south of the historic Kemess mine.
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by Greg Klein | April 22, 2016
ALX Uranium TSXV:AL has signed agreements to pick up extra turf proximal to the Hook-Carter project in Saskatchewan’s Patterson Lake South camp, the company announced April 22.
Subject to approvals, ALX gets the new land for 250,000 shares at a deemed value of $0.115 each on the closing date. A 2.5% NSR applies.
Geophysical results released last month verified multiple basement conductors at Hook-Carter, which covers extensions of three known conductive trends, the Carter, Derkson and Patterson corridors. Drill targets have already been established on the latter two.
The Patterson corridor hosts Fission Uranium’s (TSX:FCU) Triple R deposit and three additional zones on the company’s Patterson Lake South project. NexGen Energy’s (TSXV:NXE) adjacent Rook 1 project includes the Arrow deposit, the Athabasca Basin’s largest undeveloped resource, as well as the Bow zone. Neighbouring NexGen is the Hook Lake JV of Purepoint Uranium TSXV:PTU, Cameco Corp TSX:CCO and AREVA Resources Canada, which hosts the Spitfire discovery. ALX’s Hook-Carter borders Hook Lake to the south and a Cameco property to the north.
In February Cameco signed an agreement to buy ALX claims peripheral to Hook-Carter.
Earlier this month the company reported highly anomalous radon values at its Lazy Edward Bay project on the Basin’s southeastern rim. A week earlier preliminary geophysical results showing gravity lows brought encouraging news for ALX’s 80%-held Gorilla Lake property in the western Basin. The ALX portfolio includes five active projects in the Basin region.
ALX closed a private placement first tranche of $318,000 from Holystone Energy last month, part of a strategic partnership in which Holystone would invest up to $750,000, retain the right to maintain its ownership level for three years and nominate a director.
by Greg Klein | April 13, 2016
How does one explain such a compelling story coinciding with such delinquent price performance? Chris Berry examines this peculiar yellow metal from a number of perspectives in his latest Zimtu Research report. Along the way readers gain a clear overview of nuclear energy, near- and long-term supply and demand, mining methods and jurisdictional risk, among other topics.
His SWOT analysis notes recent Asian investments in Fission Uranium TSX:FCU and ALX Uranium TSXV:AL that “demonstrate significant interest in developing future supply in Canada.”
Once again Berry applies his clarity and insight to a highly informative, readable report.