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The US Uranium Renaissance is Coming, and GTI Energy is Sitting Pretty

Special Report: Wyoming’s sprawling Great Divide Basin is synonymous with US uranium, and with the domestic US nuclear resurgence in … Read More
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This article was originally published by Stockhead

Wyoming’s sprawling Great Divide Basin is synonymous with US uranium, and with the domestic US nuclear resurgence in full swing there may not be a better place to explore.

It seems remarkable that just one pure-play exploration company – GTI Energy (ASX:GTR) – sits among the region’s nuclear titans.

In the US uranium game, it doesn’t get bigger than names like Cameco, UEC, Energy Fuels, eEcore Energy, UR-Energy, Rio Tinto and Peninsula Energy. All with production assets in Wyoming which appears set to feed the US government’s insatiable desire for clean energy.

Among them sits ISR uranium explorer GTI, with around 9000ha across several groups of strategically located and underexplored mineral lode claims, and an extensive exploration drilling campaign kicking off soon.

It’s a prime locale with a busy work schedule lined up, right as the nuclear talk in the US reaches a critical point. Just take a look at these numbers.

There was the launch of a US$4.3 billion plan from the Biden administration to purchase domestic enriched uranium – a move designed to wean the US off Russian supply.

Uranium was also a beneficiary of the proposed $369 billion Inflation Reduction Act, which proposed investment in technologies needed for fuels to be produced in the cleanest ways possible.

That Act, still subject to revision, included major tax incentives to keep operating nuclear power plants running.

It’s all being done with a view to meeting the nation’s ambitious climate goals. Biden has set a target of a US power industry that would be emission free by 2035, providing power not only to the grid as we know it today but also an EV industry targeting 50% sales share by 2030.

Domestic uranium, which currently accounts for just 5% of the US annual requirement, looms as a key part of that future energy makeup.

“Because of where we see the nuclear energy story as a US-centric one, where there’s some real traction building from some of these funding decisions and the need to provide reliable, safe and clean energy for a reduced emissions future,” GTI executive director Bruce Lane told Stockhead.

“There’s a big US angle to it – the US is determined to regain the leading. But you can see it playing out globally, in Japan where there’s been a complete turnaround in thinking on nuclear and in Germany, where it looks likely that three nuclear plants scheduled for closure will remain running through the winter and China which is on track to have at least 150 reactors in service by 2035 – the US currently has 98.

“We’re seeing it play out strongly globally. And we’re going to need a lot more uranium to fuel it.”

Last month, the EU voted to include uranium in its list of green energy sources.

Underfeeding vs overfeeding

The other, lesser discussed side of the equation, according to Lane, is in the conversion and enrichment of uranium. To make nuclear fuel, natural uranium (U3O8) is turned into uranium hexafluoride (UF6) which is then enriched through the application of a process or service called a Separative Work Unit (SWU). The output from this process is called enriched uranium product, which is fabricated into the fuel rods for use in a nuclear power plant.

The previous decade long global over-supply of enrichment capacity looks like it is quickly turning into a shortage for the US due to Russian enrichment (43% of global capacity) now out of bounds for western utilities. This being the consequence of a pivot in utility supply strategies (& potential sanctions) associated with Russia’s invasion of Ukraine – in short, the western utilities are switching away from eastern (Russian) enrichment thus heralding a return to the old school east/west “bifurcated’ uranium market.

The move by western utilities to avoid Russian enriched uranium is requiring enrichment plants in the US, Canada and Europe to rapidly increase output. New skyrocketed demand for western UF6 enrichment feed and SWU is driving SWU and UF6 prices up significantly.

Western enrichers can’t quickly add more enrichment capacity so instead they are flipping from underfeeding their plants to overfeeding of the UF6 input material to deliver more enriched uranium product per SWU. Overfeeding involves feeding more UF6 uranium into centrifuges than is provided by the contracted nuclear fuel buyer, so the enricher needs to go to the spot market and elsewhere to try and buy the extra UF6 needed- this in turn drives higher prices along the entire value chain.

Ultimately this spike in demand for UF6 and U3O8 conversion is likely to quickly force buyers into the uranium spot market to buy up U3O8 feed stock as soon as possible – this will ultimately drive up the uranium price.

Lane said he thinks that the projected need to get more enriched product out faster in the west had not been fully considered in uranium forecasting.

“Some estimates consider that this switch could lead to 20–30 million pounds of uranium demand swing just on its own,” he said.

“Combine that with the forecast supply gap, and there’s a few interesting factors at play which could lead to significant price increases.”

Wyoming building

Much of the known uranium mineralisation in Wyoming is amenable to in-situ recovery (ISR) mining – ISR is regarded the lowest cost, lowest impact form of mining for the material and practised commercially in the state since the mid-1980s.

There are currently seven operable ISR facilities operable in Wyoming, with two more licensed for build. Ur-Energy’s Lost Creek ISR facility, about 5-10km from GTI’s Thor project, is claimed to be the lowest-cost facility of its kind outside of Kazakhstan.

GTI successfully drilled around 15,000m at Thor earlier this year, discovering some 5500m of uranium mineralised roll fronts which showed characteristics for ISR recovery success.

Of the 100 holes drilled in this program, 35 met or exceeded the targeted uranium cut-off grade.

The company will now embark on 40,000ft of follow-up drilling at Thor, with an additional 60,000ft at the Wicket East, Teebo, Odin and Loki projects nearby, targeting known roll fronts for ISR amenable uranium.

It’s a privileged position to be in. Lane said the company had benefited from a lack of exploration focus and spend by other operators in the area.

“Because we had such a dormant environment for uranium over the years, the bigger companies there pared back their ground holdings to the areas around either their defined deposits or production assets,” he said.

“When you look at the statistics for the last decade, very little was spent on exploration, because for a long time nobody was interested.

“Some very attractive area for exploration on the Great Divide Basin were lying there open.”

Over the last two years, GTI has set about growing its Wyoming project ground position and with two projects now on its books, 33,000m of exploration about to kick off and its gold projects divested into Regener8 Resources (ASX:R8R), it has set itself nicely to benefit from the US nuclear renaissance.

 


 

 

This article was developed in collaboration with GTI Energy, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

The post The US uranium renaissance is coming, and GTI Energy is sitting pretty appeared first on Stockhead.



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