If you want to see two sides to the uranium coin – just take a look at Canada and Australia.
North of the 49th parallel in North America, there is a hive of mining and exploration activity.
And the centre of that activity is the 100,000 square kilometre Athabasca Basin, which spans the northern parts of Saskatchewan and Alberta.
By contrast, down in the southern hemisphere, which has a vast uranium endowment, politicians — with the honourable exception of South Australia — have tried to outdo each other in erecting barriers to hinder uranium companies.
Western Australia is seeing a repeat of the ridiculous federal “three mines” policy of the 1980s: it will allow four advanced projects to go ahead, but no more.
And New South Wales allows exploration for uranium — but you can’t mine it if a discovery is made.
These Australian politicians remain unmoved by the fact that nuclear is currently the only non-carbon emitting form of base power supply and that the world is facing a looming shortage of uranium.
Moreover, it has now become a strategic commodity for the nuclear industry, particularly in the US which depends largely on Russia for enriched uranium needed to run the nation’s reactors.
Biden administration seeks US$4.3b to build enriched supply
The US has only one operating commercial enrichment plant, owned by Urenco, a British-Dutch-German consortium and located in New Mexico.
Washington is seeking to build replacement capability at home.
In the most recent development, the Biden administration is now seeking Congressional support to raise US$4.3 billion (A$5.95 billion) to get North American producers able to supply the enriched uranium.
It won’t be easy, or quick, to ramp up domestic processing but the move has already lit a fire under uranium prices.
Athabasca will be a key player in US nuclear future
While uranium exploration has been gearing up in the US, Americans will be looking to Canada — and the players in the Athabasca Basin — to do much of the heavy lifting.
The sandstones along the southern shores of Lake Athabasca were first mapped in 1888, which was the work of the Geological Survey of Canada.
These sandstones, while not being highly radioactive themselves, hid major uranium deposits.
That uranium was discovered in the 1930 by gold prospectors.
Canada’s first uranium supplies came in 1942 from the Northwest Territories. But, in the late 1960s uranium exploration began in earnest in northern Saskatchewan, and the full potential of the Athabasca Basin was revealed.
Since 1975, the Athabasca Basin has been a key uranium producer (and booster for the Canadian economy) and then in 1988 Eldorado Mining and Refining merged with Saskatchewan Mining to form today’s Cameco Corporation (TSX: CCO).
Australian players move in on Athabasca story
One of the new wave of uranium explorers in the Athabasca Basin is 92 Energy (ASX: 92E). The company owns a 100% interest in 21 mineral claims that make up its five projects — Gemini, Tower, Clover, Powerline Creek and Cypress River.
Last month, 92 Energy reported that two of the final drill holes at its GMZ discovery in Gemini had intersected mineralised zones areas with grades greater than 1% uranium oxide.
As the company explained, 1% is more than 10 times the average grade of mined uranium deposits elsewhere in the world.
Last week, the company began its summer drilling program at Gemini.
Also in the Athabasca picture is Perth-based Valor Resources (ASX: VAL), which this week reported it had identified seven high-priority targets at its Cluff Lake uranium project in the western part of the basin.
Meanwhile, Okapi Resources (ASX: OKR) has announced that its summer exploration program has begun in the Athabasca Basin.
The company has completed satellite image data analysis over its Newnham Lake and Perch projects and has now identified “numerous” prospective targets.
This current program is aimed at prioritising targets ahead of drilling in the upcoming North American winter drilling program.
Cameco still the Canadian uranium giant
Cameco, in partnership with the Orano Canada (a division of French uranium major Areva), own Cigar Lake mine, the world’s largest high-grade uranium mine.
Cameco president and chief executive officer Tim Gitzel has described Cigar Lake is “one of the best most prolific uranium producing assets on the planet”.
The 2022 production outlook for Cigar Lake is 15Mlbs, making it the largest uranium producer this year.
The mine has a reserve and resource base comprising 152.4Mlbs of proven and probable uranium oxide, 103.7Mlbs of measured and indicated resources, and 22.9Mlbs of inferred resources.
In February Cameco announced that its giant McArthur mine, mothballed in 2018, would be brought gradually back into production.
But plenty of juniors nipping at Cameco’s heels
There are 27 uranium companies listed on the Toronto exchanges.
While Cameco is capitalised at C$10.8 billion, there is a long tail of junior companies now picking up ground in the Athabasca Basin.
One of the advantages of the mineralisation in the Athabasca Basin is that most of the deposits are within 100m from surface, and so can be mined by open pit operations, which makes projects with average grades between 0.2% and 0.4% uranium oxide potentially economic.
It is only in the cases of deeper mine propositions, such as Cigar Lake and McArthur, that grades closer to 20% are required.
In the case of one of the early mines, located in the aptly named Uranium City, there was no overburden or sandstone cover, while Cigar Lake is 350m below surface.
Rook 1 mine project in engineering phase
Next in size to Cameco is NexGen Energy (TSX: NXE) which has reached the front-end engineering study stage for its proposed Rook 1 underground mine and mill.
The only other Canadian-listed player with a market capitalisation over C$1 billion is Denison Mines Corporation (TSX: DML).
Denison has a 95% interest in its flagship Wheeler River uranium project, which it describes as the largest undeveloped uranium project in the eastern portion of the Athabasca Basin.
Denison’s interests in Saskatchewan also include a 22.5% interest in the McClean Lake joint venture which includes several uranium deposits and the McClean Lake uranium mill which is contracted to process the ore from the Cigar Lake mine under a toll milling agreement.
In one of the more recent moves, Skyharbour Resources (TSXV: SYH) has entered into an option agreement with the Canadian subsidiary of Rio Tinto (ASX: RIO) to acquire up to 100% of the Russell Lake uranium project.
The property is located between Cameco’s Key Lake mill and that company’s McArthur mine.
There have been more than 200 holes drilled (for 95,000m) and numerous targets have been identified.
Of the other juniors, Purepoint Uranium Corporation (TSXV: PTU)— capitalised at C$30 million and with the slogan “capitalising on uranium’s explosive revival” — has been busy in the Athabasca Basin since 2002 and now has 10 wholly-owned projects as well as joint ventures with Cameco and Orano.
Other Athabasca players include Fission Uranium Corporation (TSXV: FCU), UEX Corporation (TSX: UEX), Fission 3.0 Corporation (TSXV: FUU), CanAlaska Uranium (TSXV: CVV) and Azincourt Energy (TSXV: AAZ).