As prices for commodities like iron ore, coal, lithium, nickel, and gold fell in February, uranium emerged as the sole winner. Apart from the nuclear revival taking place across the globe, there are several other factors driving uranium prices. For one, Sprott Physical Uranium Trust continues to be a large buyer of spot pounds, assuring utilities will be less able to satisfy their order books through an arbitrage between spot and contract pricing. Sprott’s CEO says uranium will see repricing soon as the demand continues to grow. Secondly, a number of utilities are projected to fall short of contracted requirements very soon, necessitating the acquisition of additional supplies from suppliers and third, Western producers are seeing demand from untapped markets previously served by Russia’s vast enrichment sector. Fortunately, higher prices will bode well for uranium development companies like Fission Uranium Corp. (TSX:FCU) (OTCQX:FCUUF), Denison Mines Corp. (TSX:DML) (NYSE-A:DNN) and NexGen Energy Ltd. (TSX:NXE) (NYSE:NXE) and producers like Uranium Energy Corp. (NYSE:UEC), and Ur-Energy Inc. (NYSE:URG).
Fission Uranium Corp. (TSX:FCU) (OTCQX:FCUUF), a Canadian resource company, is focusing on developing its Patterson Lake South (PLS) property, which comprises a proposed high-grade uranium mine and mill.
PLS is located in the renowned Athabasca Basin uranium district and is home to the region’s only major, high-grade deposit discovered at shallow depth – a considerable advantage in terms of construction time, technical risk, and competitive cost. In truth, this advanced uranium project could become one of the world’s most cost-effective uranium mines.
On March 2, Fission Uranium hit an exciting milestone, announcing that it has filed a technical report for PLS, summarizing the Feasibility Study in accordance with the National Instrument NI 43-101 standards.
The expanded ten-year mine life, with a LOM production of 90.9 million lbs of U3O8, the operating costs of just C$13.02, the after-tax NPV 8% of C$1.2 billion and the after-tax IRR of 27.2% are some of the most crucial elements of the report.
Fission also noted that neither Patterson Lake nor the Clearwater River will be physically impacted by the underground mine design – an important factor that undoubtedly has helped the company to successfully sign engagement and capacity agreements with the local rights holders and stakeholders.
Uranium Companies Boost Production and Expand Exploration
North American-focused Uranium Energy Corp. (NYSE:UEC) just announced that it will be supplying 300,000 pounds of uranium concentrates of US origin to the Department of Energy’s National Nuclear Security Administration (NNSA) for $17.85 million. The funding was made in response to a request for proposals issued by the National Nuclear Security Administration to develop its strategic national Uranium Reserve program. Uranium Energy also recently acquired a 100% stake in Rio Tinto’s Roughrider uranium project in Saskatchewan.
Ur-Energy Inc. (NYSE:URG) has increased the quantity of uranium to be delivered under the company’s sales agreement announced on August 8, 2022. The agreement, which originally called for 200,000 pounds of U3O8 delivered annually over a six-year period, has been revised to raise the yearly supply by 100,000 pounds of U3O8 commencing in 2024 at the same pricing levels. Beginning in 2024, the Company’s total sales amount under contract will be 600,000 pounds U3O8, plus or minus a minor, optional flex. Ur-Energy has decided to immediately ramp up production at its operating Lost Creek uranium mine to levels sufficient to deliver into these current contracts, having obtained these sales commitments.
Exploration company NexGen Energy Ltd. (TSX:NXE) (NYSE:NXE) announced last month that it has commenced its expanded 2023 exploration project at 100% owned Rook I property in the Athabasca Basin. The program is designed to follow-up on positive results from the 2022 exploration drill program and to test prospective areas that have been highlighted by detailed 2022 geophysical surveys.The company has also planned a substantial geophysical program this year for drill target generation across high-priority areas at the property.
Denison Mines Corp. (TSX:DML) (NYSE-A:DNN) is also making progress at its 95% owned Wheeler River project, announcing the completion of the neutralization phase of the Phoenix in-situ recovery Feasibility Field Test (FTT) in late December 2022. The neutralization phase was initiated in October after the successful completion of the FTT leaching phase and was designed to confirm certain environmental assessment assumptions and verify the efficiency and effectiveness of the neutralization process planned for ISR mining at Phoenix.
Fission Uranium recently appointed Beatriz Orrantia, a sustainable mining expert, to the Company’s Board of Directors.
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