Atomic Harvest
A bright future for uranium
Ontario Premier Doug Ford’s government has been enthusiastic about nuclear power, announcing its desire to nearly double production at the Bruce Power plant and conducting feasibility studies to refurbish Toronto’s aging Pickering nuclear plant. Canada’s only uranium refinery is located at Blind River, Ontario, where uranium ore concentrates from Canada and abroad are refined to produce uranium trioxide. Ontario’s refineries need not look far to fuel these future reactors, as Canada is endowed with the fourth largest uranium reserves in the world, after those of Australia, Kazakhstan and Russia. Cognizant of this fact, Latitude Uranium, headquartered in Toronto, has had a busy year investing around C$8 million in 18 drill holes, including at its flagship Angilak project in Nunavut. Latitude Uranium’s CEO, John Jentz, explained why he took the approach of exploring in Nunavut, rather than more established uranium mining destinations like Saskatchewan’s Athabasca basin: “While the Athabasca region offers even higher grades, it is a challenging and costly environment for mining. Angilak falls somewhere in between; it is high-grade, but not quite as high as Athabasca.”
Saskatchewan’s famous Athabasca basin is already home to the big Canadian uranium producers, Cameco and Orano, who rank among the largest producers of uranium globally, with Cameco’s Cigar Lake mine being responsible for 14% of the world’s total uranium production in 2022, making it the largest-producing uranium mine globally. Baselode Energy, another Toronto headquartered junior, has been exploring the Athabasca basin looking for near-surface, basement-hosted, high-grade uranium deposits, avoiding the sandstone that is prevalent in the Athabasca basin.
Uranium mining is an integral part of northern Saskatchewan, to such an extent that the provincial government established a small town named ‘Uranium City’ to service the mines in the region. “Canadian uranium mining is different from Saskatchewan uranium mining. Uranium is ingrained in Saskatchewan mining, nothing needs to be re-invented here, everything has been in place since the 1950s,” said James Sykes, Baselode Energy’s president and CEO.
The Uranium spot price has more than doubled in the last three years, and Toronto-based Denison Mines has been working hard to take advantage of the bull market, raising US$55 million in October 2023 to fund the development of its flagship Wheeler River project, the largest undeveloped uranium project in the eastern portion of the Athabasca Basin. After a five-year de-risking process, Denison Mines announced the results of its feasibility study of Wheeler River’s Phoenix deposit in June 2023. “We pivoted to engineering design efforts, focusing on readying for project execution and early procurement. It is an exciting time for Denison Mines, as a final investment decision on Phoenix approaches,” shared David Cates, president and CEO, Denison Mines.
Toronto’s juniors are rushing to take advantage of the renewed interest in uranium and ramp up their activities. Latitude Uranium is no different, having recently announced a merger with ATHA Energy Corp and 92 Energy. However, the record uranium spot prices come with a caveat; most uranium is frequently traded through long-term contracts directly between producers and utilities and lacks a centralized exchange, unlike many other commodities.
“Marketing uranium projects can be challenging due to fears surrounding nuclear power. Effective communication and community education are key to addressing these concerns.”
John Jentz, CEO, Latitude Uranium
Purepoint Uranium (Purepoint) will spend the 2024 field season drilling at its flagship Hook Lake JV project with Cameco and Orano, following up on promising results from the 2023 season. Purepoint’s president and CEO, Chris Frostad, is optimistic that spot and contract prices will continue their upward trend but cautions that uranium is quite unlike other commodities: “While it is an exciting time to be in uranium, it is crucial to note that, although the spot price has just surpassed US$100/lb, the long-term price remains significantly below the threshold required to activate new mining projects. To trigger mine development or construction, the long-term contract price needs to sustainably reach and stay above the US$80/lb range.”
Geo-political turmoil, while detrimental for some of Ontario’s juniors, creates opportunities for others. The 2023 Niger coup and the ongoing war in Ukraine have forced buyers away from the usual uranium suppliers like Russia. With the USA struggling to incentivize domestic uranium production, the number of stable uranium jurisdictions is narrowed down even further. “As geopolitical instability persists, there is great potential for Canadian supply to be seen as a premium source,” pointed out Cates.
With geopolitical factors increasingly jeopardizing uranium supply chains around the world, buyers are unlikely to be able to be as cost sensitive as in the past: “The current concern for utility buyers is not price; it is about securing a stable supply. These dynamics collectively maintain upward momentum and support the buoyancy of uranium prices,” explained Frostad.
With the number of viable suppliers dwindling, and the push for green energy growing stronger, the fundamentals for a uranium bull run seem to all be in place – but uranium is not gold, and it presents its unique challenges for juniors seeking investment. “Marketing uranium projects can be challenging due to fears surrounding nuclear power. Effective communication and community education are key to addressing these concerns,” explained Jentz.
Across most commodities, it is apparent that the fallout of the Covid pandemic and the current volatile geopolitical situation in many regions is pushing buyers to emphasize stability and safety when deciding where to purchase their minerals. For Toronto-headquartered tungsten producer Almonty Industries, which operates mines from Portugal to South Korea, selecting safe jurisdictions is a core component of their strategy: “When it comes to the jurisdiction of our mines, we place high importance on transparent territories with a strong rule of law. We favor democracies, even though they come with regulations and occasional challenges. Our customers value the transparency democracies offer, and it simplifies the supply audit process,” shared Lewis Black, president and CEO, Almonty Industries.
Toronto’s miners and prospectors seeking to make their fortunes abroad know a stable jurisdiction when they see one, as their home province is renowned worldwide for its stability and equitability.
Article header image by TTstudio at Adobe Stock