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Gold – A breakout is coming

Can the recovery continue? Gold has recovered strongly in recent weeks but it’s struggled for momentum since breaking above $1,800. The yellow metal…

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This article was originally published by Market Pulse

Can the recovery continue?

Gold has recovered strongly in recent weeks but it’s struggled for momentum since breaking above $1,800.

The yellow metal initially broke above here on Friday but failed to hold and gave back most of its gains to end the week below that important resistance level. This is a sign of weakness in the rally and suggested it may struggle when trading resumed this week.

While trading on Monday may have given the impression this was just a blip, as gold ended the day above $1,800, as we’ve seen today, those vulnerabilities remain as it once again plunged back below.

This leaves gold in a very strange position. It’s clearly still got plenty of support as it continues to push above the $1,800 handle but it’s having a hard time holding on and continues to be forced back. Something has to give.

At times today, it looked as though that may be a key support level around $1,780, which would have resulted in a bearish engulfing pattern on the daily chart and a break of the rising trendline formed during its recovery in recent weeks. But that support held and the price rebounded back.

Given such a tight range and one that’s becoming smaller by the day, one of these must soon fall, at which point we may have a much clearer view on the direction of travel for gold.

Author: Craig Erlam

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Who made the gains? Here are the top 50 resources winners for November

The top commodities in November were gold, copper and lithium. Copper, lithium, nickel and PGEs stocks increased their share of … Read More
The post…

‘Slow’vember certainly lived to its name, with only FIVE stocks making gains of 100% or more (the biggest movers being Tim Goyder-backed Devex Resources at 126% and  new copper miner AIC Mines (ASX:A1M) at 118%).

Compare that with October and September which had 14 and 19 stocks above 100%, respectively.

The biggest mover both months was Chinese rare earths stock Viagold, which is still suspended because it can’t explain some suspect trading action.

No Viagolds in November, just (mostly) quality stocks with good news to share.
 

What were our winners looking for?

The standout commodities in November were gold, copper and lithium.

Copper, lithium, nickel and platinum group elements (PGEs) increased their share of the top 50 month-on-month.


 

Here are the top 50 ASX resources stocks for the month of November >>>

Scroll or swipe to reveal table. Click headings to sort. Best viewed on a laptop

CODE COMPANY 1 MONTH RETURN % SHARE PRICE END NOV MARKET CAP COMMODITIES
DEV Devex Resources 126 0.7 $ 207,342,169.32 NICKEL, COPPER, PGEs, URANIUM
A1M AIC Mines 118 0.49 $ 152,813,933.91 COPPER, GOLD
HAW Hawthorn Resources 102 0.105 $ 31,683,983.24 IRON ORE, GOLD
ASQ Australian Silica 100 0.23 $ 50,918,805.28 SANDS, NICKEL, COPPER, PGEs
MRR Minrex Resources 100 0.04 $ 15,778,450.49 LITHIUM, GOLD, COPPER
AVZ AVZ Minerals 94 0.69 $ 1,995,267,061.60 LITHIUM, TIN
KWR Kingwest Resources 76 0.22 $ 55,570,420.75 GOLD
PGO Pacgold 76 0.545 $ 16,252,980.00 GOLD
KMT Kopore Metals 74 0.04 $ 24,524,778.20 COPPER, GOLD
TRL Tanga Resources 74 0.073 $ 32,362,250.76 GOLD
LCY Legacy Iron Ore 69 0.022 $ 153,713,724.41 IRON ORE, GOLD
CPN Caspin Resources 67 1.41 $ 83,435,748.45 NICKEL, COPPER, PGE
PSC Prospect Resources 64 0.69 $ 287,110,768.45 LITHIUM
TRT Todd River Resources 59 0.11 $ 59,261,788.22 NICKEL, COPPER, PGEs
MQR Marquee Resources 52 0.12 $ 21,366,813.26 LITHIUM, GOLD, COPPER
ATC Altech Chem 51 0.14 $ 180,441,939.58 HIGH PURITY ALUMINA
CDT Castle Minerals 50 0.027 $ 22,862,960.93 LITHIUM, GRAPHITE, GOLD, COPPER, LEAD, ZINC
PNR Pantoro 50 0.33 $ 465,134,570.34 GOLD, PGEs
CHN Chalice Mining 49 9.97 $ 3,347,550,801.00 NICKEL, COPPER, PGEs
LMG Latrobe Magnesium 49 0.094 $ 142,201,928.78 MAGNESIUM
EMT Emetals 47 0.022 $ 7,885,000.00 RARE EARTHS, GOLD, NICKEL, COPPER
LPD Lepidico 45 0.045 $ 261,258,367.69 LITHIUM
HIO Hawsons Iron 43 0.11 $ 68,645,083.20 IRON ORE
EFE Eastern Iron 41 0.076 $ 65,821,914.05 LITHIUM, IRON ORE
EGR Ecograf Limited 39 0.85 $ 373,776,770.97 GRAPHITE
STM Sunstone Metals 39 0.093 $ 214,744,413.98 COPPER, GOLD
JDR Jadar Resources 38 0.054 $ 39,298,937.66 LITHIUM, COPPER, TIN
RLC Reedy Lagoon 38 0.04 $ 21,601,046.64 LITHIUM, GOLD IRON ORE
E2M E2 Metals 36 0.32 $ 46,646,076.03 GOLD, SILVER
NIC Nickel Mines 36 1.42 $ 3,495,890,380.89 NICKEL
GW1 Greenwing Resources 34 0.45 $ 50,206,439.25 GRAPHITE, LITHIUM
M3M M3Mininglimited 34 0.295 $ 8,463,188.40 COPPER, GOLD
LOM Lucapa Diamond 33 0.084 $ 97,998,706.81 DIAMONDS
GLN Galan Lithium 33 1.68 $ 434,180,203.50 LITHIUM
MEP Minotaur Exploration 33 0.18 $ 87,734,350.90 KAOLIN, COPPER
MI6 Minerals260 33 0.62 $ 140,800,000.00 GOLD, NICKEL, COPPER, PGEs
SMI Santana Minerals 32 0.33 $ 39,791,186.40 GOLD
KRM Kingsrose Mining 29 0.08 $ 58,400,588.16 GOLD, SILVER, NICKEL, COPPER, PGEs
FNT Frontier Resources 29 0.0245 $ 16,675,045.72 RARE EARTHS, LITHIUM, GOLD
NXM Nexus Minerals 29 0.515 $ 145,417,789.60 GOLD, COPPER
SPQ Superior Resources 29 0.018 $ 24,609,234.26 GOLD, NICKEL, COPPER, PGEs,
WCN White Cliff Min 29 0.018 $ 8,275,142.38 RARE EARTHS, LITHIUM, GOLD
GL1 Globallith 28 0.62 $ 64,704,551.87 LITHIUM
DME Dome Gold Mines 28 0.23 $ 73,849,351.28 SANDS, COPPER, GOLD
STA Strandline Res 28 0.255 $ 257,691,885.46 SANDS
IR1 Irismetals 26 0.43 $ 17,531,249.58 NICKEL, GOLD
S2R S2 Resources 26 0.215 $ 74,838,719.55 GOLD, NICKEL, COPPER, PGEs
MGU Magnum Mining & Exp 26 0.087 $ 40,765,882.95 IRON ORE
ASM Ausstratmaterials 26 13.32 $ 1,738,244,834.76 RARE EARTHS, CRITICAL MINERALS
ASN Anson Resources 25 0.125 $ 132,781,906.40 LITHIUM
AVL Aust Vanadium 25 0.03 $ 91,879,454.97 VANADIUM, GOLD, NICKEL, COPPER, PGEs

 

‘The Chalice Effect’

The explosive impact of Chalice Mining’s (ASX:CHN) Gonneville discovery on surrounding explorers and other nickel-copper-PGE stocks is well documented.

Last month, CHN hit an all-time high after announcing a truly specular maiden resource of 10Moz Pd-Pt-Au, 530,000t nickel, 330,000t copper and 53,000t cobalt — the equivalent of 1.9Mt of nickel or 17Moz of palladium.

That’s the largest platinum group elements discovery ever in Australia, and the largest nickel sulphide discovery globally in 20 years.

Noted PGE expert Keith Goode told us Gonneville’s the best PGE discovery he’s ever seen.

 

It kicked off another run for surrounding high quality explorers like Devex Resources (ASX:DEV), Caspin Resources (ASX:CPN), Todd River Resources (ASX:TRT), and Minerals 260 (ASX:MI6).

DEV’s chairman is Tim Goyder, the same man who has stewarded Chalice and lithium explorer Liontown into positions as two of the ASX’s best performing stocks over the past year.

The visual indications from the first two stratigraphic holes at ‘Sovereign’ — a 50-50 JV with fellow November winner Australian Silica (ASX:ASQ) —  immediately to the north of Chalice’s Gonneville discovery are very promising.

“We are methodically ticking the boxes towards what we all hope will be a game-changing discovery at Sovereign,” DEV managing director Brendan Bradley says.

“The outcomes of these two widely-spaced stratigraphic holes have exceeded our expectations and given us confidence that we are very much on the right track with our exploration approach.


 

CPN was demerged from Cassini Resources, which was acquired by copper major OZ Minerals (ASX:OZL) in October last year for its ‘West Musgrave’ copper-nickel project.

What’s interesting about CPN is that it was one of the only explorers looking for nickel-copper-PGEs near Perth, WA, before Chalice moved next door and hit the motherlode in its very first hole.

That’s right — CPN is arguably the Julimar region OG.

Its main game is ‘Yarawinda Brook’, where drilling at the ‘XC-22’ anomaly last month intersected significant nickel and copper sulphides. Assays are pending.

 

TRT has one of the finest exploration teams in the business.

Managing director Will Dix was part of the team that discovered the ‘Waterloo’ nickel mine and the 2Moz ‘Thunderbox’ gold project, which is probably where he met non exec director Mark Bennett, best known for his leadership of small cap success story Sirius Resources.

Also on the board is Stu Crow, non-exec chairman at white hot lithium stock Lake Resources (ASX:LKE).

TRT has 5-6 projects, the most interesting right now being its ground near Julimar called ‘Berkshire Valley’ where 8,000m of drilling has now kicked off.

 

Liontown (ASX:LTR) spinout Minerals 260 has been a popular addition to the bourse.

Liontown had held the Moora gold-nickel-copper-PGE project near Julimar since 2018, with the asset now in the hands of MI6 and former Liontown CEO David Richards.

MI6 also holds an option to earn a 51% interest in the Koojan gold-nickel-copper-PGE project, the Dingo Rocks project and tenement applications at Yalwest.

A maiden gold drilling program at Moora kicked off early November.

 
 

The lithium wave strengthens

It had been another fantastic month for those veteran lithium stocks who did the hard yards when times were really bad.

Like, last year.

These near-term producers — like AVZ Minerals (ASX:AVZ), Prospect Resources (ASX:PSC), Lepidico (ASX:LPD), Galan Lithium (ASX:GLN) and Anson Resources (ASX:ASN) — have next dibs on this emerging and potentially very lucrative boom.

AVZ, PSC, LPD, GLN, ASN share price charts

 

But the November top 50 also contains a bunch of latecomers who are successfully riding this wave of supportive market sentiment.

Buying a couple of North American lithium and copper-gold projects  propelled Marquee Resources’ (ASX:MQR) share price to three-year highs.

The ‘Kibby Basin’ lithium project in Nevada is ~50km from Ioneer’s (ASX:INR) advanced Rhyolite Ridge lithium boron project, and 60km from MQR’s existing ‘Clayton Valley’ lithium project.

A drill campaign will begin in Q1 of 2022, MQR says.

Minrex Resources (ASX:MRR) is up ~100% since picking up a bunch of lithium projects in the Pilbara early last month.

This is all part of a strategy to become “an emergent lithium explorer with high-quality assets” within 70km of world-class lithium and tantalum producers Pilbara Minerals (ASX:PLS) and Mineral Resources (ASX:MRL), it says.

A further 97sqkm in exploration licence applications are currently subject to a ‘ballot’ (aka picking a name out of hat), including three tenements surrounding and adjoining Global Lithium’s (ASX:GLI) 10.1 million tonnes at the 1.1% Li ‘Archer’ project near Marble Bar.

MQR, MRR share price charts



The post Who made the gains? Here are the top 50 resources winners for November appeared first on Stockhead.












Author: Reuben Adams

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Galena Mining eyes solid and steady lead market as Abra mine heads to production in 2023

It was only months after listing on the ASX that Galena Mining (ASX:G1A) hit the proverbial motherlode at its Abra … Read More
The post Galena Mining…

It was only months after listing on the ASX that Galena Mining (ASX:G1A) hit the proverbial motherlode at its Abra lead deposit near Meekatharra, striking 31.4m at 14.5% lead and 2.7% zinc in its first assays in November 2017.

It became clear the company would be able to post a high grade resource very soon, as the underlying commodity recovered from a long bear market that had, along with environmental concerns, claimed the life of WA’s only other lead mine Paroo Station.

Galena confirmed the deposit’s world class resource in early 2018, with the lead sulphide mine delivering impressive high grades of 36.6Mt at 7.3% lead and 18g/t silver.

LME lead prices have improved since the pandemic began
Lead prices have improved since the pandemic began. Pic: LME

Although lead – strongly associated with its primary end use in lead-acid batteries for cars – has not enjoyed the fanfare other base metals have received from the new energy revolution, it has still seen a decent run since the start of the pandemic.

Lead is changing hands on a cash basis for US$2324.50/t, having dropped to around US$1600/t in mid-2020, and is up some 17% year to date.

It is good timing for Galena, which pushed the button on the Abra mine back in June, commencing the underground development in a 60-40 joint venture with Japanese smelter owner Toho Zinc.

Funded with a US$110 million debt package arranged by Taurus Mining Finance and US$90 million in equity from offtaker and JV partner Toho, Galena has commenced underground development and expects to begin commercial production in 2023.

Now containing a total indicated and inferred resource of 34.5mt at 7.2% lead and 16g/t silver, Galena says the mine will run for an initial 16 years, producing 95,000tpa of lead and 805,000oz of silver annually.

At 75%, Galena says Abra will produce the highest quality lead concentrate in the world, valued for its lack of impurities.

Despite being a quarter of the way through the construction of a major new WA mine, Galena is still worth under $100 million. Stockhead caught up with Galena managing director Tony James at the RIU Resurgence Conference in Perth to talk about Abra and the path ahead.

 

Tell me a little bit about the lead market. It hasn’t really received the attention of some of the other base metals of the battery metals thematic that we’ve seen this year. Why is it exciting to be building a lead mine at the moment?

“I think there’s a couple of things about this lead deposit that make it quite unique.

“One is it’s one of the cleanest lead concentrates in the world. If you compare it to other concentrates that will be made, it’s got 1/10th of the deleterious elements that other concentrates normally have.

“So the market has been very interested in our product because they really like to use it as a blending product into their smelters.

“It helps them with some of their environmental issues and also enables them to on-sell some of the lead as well through further marketing and sales.

“This mine will actually be in the top 10 lead mines in the world in terms of size and production. So that’s made it really interesting.

“I think what’s interesting about lead (as a product) is it’s quite an established market. So 400 million lead acid batteries get made a year in the world and even EVs, the commercial EVs that have been built, actually still have a lead-acid battery.

“So lead-acid batteries are here to stay. Even though 50% of lead going into batteries is recycled lead, 65% is how much lead (supply) goes into those batteries on an annual basis.

“So it’s a very stable market. Wood Mackenzie forecasts it’ll be a 24% increase in demand over the next 10 years. So the market looks pretty steady and pretty stable.”

 

We haven’t seen a lead project in WA for a while, probably not since Paroo Station shut down. Has it been difficult at all to get people in Australia over the preconceptions they might have about lead projects being dirty or being difficult?

“It is difficult and I think there is a mindset in the world that lead’s a dirty mineral and it doesn’t have a big future.

“And it’s a little bit of a misconception, I think, because it does have a major part in our society. But it certainly doesn’t have the lustre of gold or lithium or anything like that.

“So that is something we have to deal with. What I think is interesting is the people that have actually understood commercially this project and what this project can do economically understand the value of the project.

“One of the important things to remember is this is a lead sulphide deposit, not a lead carbonate deposit, and lead carbonate deposits are the ones that actually cause more issues environmentally and from a hazard point of view.

“Lead sulphide deposits actually are a much safer and more environmentally stable product to mine.”

 

So you’ve got about 7.2%. lead content in the resource. How does that compare to other projects?

“In terms of the head grades it can be high.

“Typically lead is mined with other elements, like it’ll be lead-zinc or lead will be one of the products that come out of the mine.

“But normally, what happens with a lot of mines is the lead component might be a lot lower percentage, it might be 2%, or 1%.

“The fact this is predominately a lead mine with a silver by-product, it’s at a higher grade. So it’s actually quite a good healthy grade.

“Now, what that means is that we can produce a concentrate that’s 75% lead. Most lead concentrates in the world sit between 55% and 65% lead. So that’s what makes this product so good, is we can get such a high concentrate back. And we’ll be producing effectively 130,000t of concentrate a year, which is 100,000t of lead.”

 

How much are you looking at in terms of a margin? And how is that going to be impacted by future lead prices?

“Depending on the supply and demand of lead, our forecast lead price that we’re using in our long term forecasts is sitting around between $0.90 and $1 a pound US.

“Our cost base is sitting at less than 50 cents a pound, so we’re sort of sitting in the 46 cents a pound type (margin) range. We think that the long term forecast is quite stable.

“And that holds us in good stead going forward. I think the other interesting thing about this project with our joint venture partner, Toho Zinc, they have a lead smelter that needs concentrate.

“So they need our lead. It’s a bit like a security for us to a degree.

“They are desperately keen to get their 40% of the concentrate that we produce in the long term.

“So I think the economics look very strong and very stable.”

 

Is there a lot of exploration potential outside of the main Abra deposit, and in terms of the lead market itself do we need to have a lot of new discoveries to cater for the demand?

“There are not too many new mines starting around the world in terms of new lead sources.

“So this project is certainly one that’s right up there in terms of being a dominant lead mine for quite a few years to come. In terms of exploration, we have a huge area.

“The joint venture has 100km2 sitting around the Abra deposit that has many targets that look very similar to Abra that we’ve done very little exploration on.

“They show the same rock types, they show the same stratigraphic horizons, they just need more drill holes or more exploration.

“Certainly from the joint venture’s point of view, there’s a lot of upside just around Abra.

“Immediately to the west of Abra there’s a package of 500km2 tenements that Galena is 100% owner of. There are multiple lead and other base metal targets there as well that need exploration.

“We even have copper targets, manganese targets there, gold targets there and also lead-silver targets. That’s called the Jillawara project, the level of exploration that’s gone into there is very minimal.

So certainly, our strategy at the moment is to focus on Abra, get the Abra mine up and running, learn from getting access to that ore body, take some of those learnings into the exploration program.

“We believe that the level of exploration work that’s been done in that area is very low. It’s very green. There’s a lot more work to do and a lot more knowledge to be had, but the potential is enormous.”

 

Galena Mining share price today:


 

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Author: Josh Chiat

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Marvel Discovery bolsters “multi-commodity” portfolio with acquisition of uranium project

2021.12.05
For over half a century, uranium has been one of the world’s most important energy minerals.
It is used almost entirely in nuclear reactors…

2021.12.05

For over half a century, uranium has been one of the world’s most important energy minerals.

It is used almost entirely in nuclear reactors for generating electricity; a small portion of the mineral is also used in radioisotopes for medical diagnosis and research.

Nuclear power is widely considered an efficient form of energy creation. One uranium pellet weighing just 6 grams produces the same amount of energy as a tonne of coal.

Today, nuclear power is the second-largest source of low-carbon energy used to produce electricity, following hydropower. During operation, nuclear power plants produce almost no greenhouse gas emissions.

According to the IEA, the use of nuclear power has reduced carbon dioxide emissions by more than 60 gigatonnes over the past 50 years, which equals almost two years’ worth of global energy-related emissions.

There are more than 440 nuclear power reactors currently in operation across 30 countries, with another 50 or so under construction. Together, these nuclear reactors account for around 10% of the world’s electricity and one-third of global low-carbon electricity.

As a zero-emission clean energy source, nuclear power has become a vital part of the global energy transition, which would see nations shift away from the use of fossil fuels as the main source of electricity generation.

Nuclear electricity production. Source: World Nuclear Association, IAEA PRIS

Last year, as many as thirteen countries produced at least a quarter of their electricity from nuclear plants. Prior to 2020, electricity generation from nuclear energy had increased for seven consecutive years.

In a recently updated outlook report, the International Atomic Energy Agency (IAEA) said it expects world nuclear generating capacity to double to 792 gigawatts (net electrical) by 2050 from 393 GW(e) last year.

This was about 10% higher than the 715 GW(e) projection previously given by the IAEA, citing that many countries are considering the introduction of nuclear power to boost reliable and clean energy production.

“The new IAEA projections show that nuclear power will continue to play an indispensable role in low carbon energy production,” IAEA Director General Rafael Mariano Grossi stated.

The prospects for nuclear power will likely grow higher in the next two decades and beyond with many countries now targeting net-zero carbon emission. Growth is projected at around 2.6% annually through 2040, according to the World Nuclear Association (WNA).

Uranium Market

Positive developments for nuclear energy have also served as a strong tailwind for the long-dormant global uranium market.

As all commodity markets tend to be cyclical, uranium has languished near historical lows for the better part of the last decade, but the tide is beginning to turn.

Since the third quarter of 2021, uranium prices have enjoyed a sudden revival, rising by about 40% just in September, outpacing all other major commodities.

The price surge coincided with a burst of demand in uranium investments, led by Sprott Physical Uranium Trust, which has amassed a uranium stockpile that is equal to about 16% of the annual consumption from the world’s nuclear reactors, reflecting a massive bet on nuclear’s rising prominence in a carbon-free future.

Since mid-August, the Sprott fund has been snapping up uranium from the spot market almost on a daily basis, sometimes buying more than 500,000 pounds in a single day, according to its website and social media account. That helped to drive uranium futures to its highest since 2012.

Two exchange-traded funds focused on uranium — NorthShore Global Uranium Mining ETF (URNM) and the Global X Uranium ETF (URA) — have also seen a resurgence, with investors having poured more than $1 billion into them so far this year.

However, even before the recent price rally started, demand for uranium from the investment sector was growing, claims John Ciampaglia, CEO of Sprott Asset Management, which oversees the physical trust.

ETFs that track uranium are some of the best performers of the last two years, reversing a downturn that came when investors shunned the commodity following the Fukushima nuclear disaster in 2011.

About 20 million pounds of uranium had already been locked up by buying from London investment firm Yellow Cake Plc, Toronto-based Uranium Participation Corp. and a few junior uranium development companies, according to Jonathan Hinze, president of UxC LLC, a leading nuclear fuel market research firm.

The Sprott uranium fund was formed out of an April takeover of UPC, which at the time held 18 million pounds of uranium. In March, Yellow Cake bought $100 million worth of uranium from Kazatomprom, the world’s top uranium miner. The Kazakh producer is also said to be in talks to supply uranium directly to Sprott, according to Bloomberg reports.

Although uranium demand from utilities has not increased much, Kazatomprom has warned of supply shortages in the long term as investors scoop up physical inventory and new mines aren’t starting quickly enough.

Years of persistently low prices have led to planned supply curtailments of existing production capacity, lack of investment in new capacity, and the end of reserve life for some mines. These factors are all likely to jeopardize the long-term security of uranium supply faced with a rising demand for carbon-free electricity.

To complicate matters, utilities normally do not come to the market when they need uranium; instead, the mineral must be purchased years in advance to allow time for a number of processing steps before it arrives at the power plant.

So as the spot market continues to thin, driven by investor purchases, there may not be enough uranium to adequately satisfy the growing backlog of long-term demand.

Not Enough Supply

According to the World Nuclear Association, for about 445 reactors with a combined capacity of over 390 GWe, this would require some 76,000 tonnes of uranium oxide concentrate containing 64,500 tonnes of uranium from mines each year. For context, total production from mines was about 47,700 tonnes last year.

More significantly, mine production as a percentage of world demand has been on the decline for the past five years, from 98% in 2015 to just 74% in 2020, WNA data shows.

World uranium production and reactor requirements. Source: OECD-NEA, IAEA, World Nuclear Association

While the balance is usually made up from secondary sources including stockpiled uranium held by utilities, recycled or re-enriched uranium, and ex-military weapons, their share of the total supply will decline over time and should not be counted on for electricity generation in the long term.

According to a report by WNA, primary uranium production from existing mines will decrease by 30% in 2035 due to resource depletion and mine closures, while new planned mines will only compensate for exhausted mine capacities.

With mine output seeing further declines due to the Covid-19 pandemic and now investors hoarding more physical uranium, the industry is in dire need of strategic investments on mine projects to assuage future supply concerns.

Uranium Mining Overview

Uranium is a naturally occurring element with an average concentration of 2.8 parts per million (ppm) in the Earth’s crust. Traces of it occur almost everywhere.

In fact, it is more abundant than gold, silver or mercury, about the same as tin, and slightly less abundant than cobalt, lead or molybdenum. Large amounts of uranium also occur in the world’s oceans, but in very low concentrations.

To make nuclear fuel from uranium ore, the uranium is first extracted from the rock, then enriched with the uranium-235 isotope, before being made into pellets that are loaded into assemblies of nuclear fuel rods. In a nuclear reactor, there are several hundred fuel assemblies containing thousands of small pellets of uranium oxide in the reactor core.

The nuclear chain reaction that creates energy starts when U-235 splits or “fissions”, which produces a lot of heat in a controlled environment.

Most of the ore deposits supporting today’s biggest uranium mines have average grades in excess of 0.10% of uranium (or 1,000 ppm), and even the low-grade ores must be 0.02% to support a mine. Therefore, uranium operations are constrained to just a few places with suitable orebodies that can be mined economically.

While uranium production occurs in 20 countries, more than half of the world’s total output comes from just 10 mines in five countries, with Kazakhstan leading the way as usual (over 19,400 tonnes). Other notable producers include Australia, Namibia and Canada.

The largest producing uranium mines in 2020. Source: World Nuclear Association

Some uranium is also recovered as a byproduct with copper, as at the Olympic Dam mine in Australia (BHP), or as byproduct from the treatment of other ores, such as the gold-bearing ores of South Africa, or from phosphate deposits in places like Morocco and Florida. In these cases, the concentration of uranium may be as low as a tenth of that in orebodies mined primarily for their uranium content.

Various types of uranium mines can be found throughout the world. Open-pit mining occurs where orebodies lie close to the surface, while underground mining methods are employed where orebodies are deeper.

Meanwhile, some orebodies may lie in groundwater in porous unconsolidated material (such as gravel or sand), and may be accessed simply by dissolving the uranium and pumping it out; this method is known as in situ leaching (or in situ recovery in North America). For some ore, usually those with very low-grade (below 0.1%U), it is treated by heap leaching, which is similar to in situ mining.

Canada’s Athabasca Basin

As one of the leading uranium producers, Canada is rich in uranium resources and has a long history of exploration, mining and generation of nuclear power. Up until 2019, it had mined more uranium than any other country (539,773 tU) in history, about one-fifth of the world total.

By 2021, Canada has known uranium resources totalling 606,600 tonnes U3O8 (514,400 tU), with exploration still continuing. A majority of these resources are in high-grade deposits, some one hundred times the world average.

Canada’s uranium mining industry is represented by the major discoveries in the Athabasca Basin of northern Saskatchewan, which have accounted for most of the country’s production since the 1970s. The region is known to host some of the largest high-grade uranium deposits in the world.

The McArthur River and Cigar Lake mines, jointly owned by Cameco and Orano, have been the two main producers.

Cigar Lake is currently the world’s highest-grade uranium mine with 97,550 tonnes U3O8 (82,720 tU) of proven and probable reserves. The McArthur River mine, an even bigger operation than Cigar Lake, was placed on care and maintenance in 2018 due to market weakness.

Uranium mines in Canada. Source: World Nuclear Association

Past production can also be found at the nearby McClean Lake operation, which in the last 10 years has mostly been used to process ore from Cigar Lake; and the Rabbit Lake deposit, most of which had already been mined out after more than 40 years of mining.

To this day, the northern part of Saskatchewan remains a world leader in uranium production, with several proposed mines waiting in the pipeline (i.e. Denison’s Wheeler River) and various projects in the advanced-exploration phase.

Marvel Discovery

The most recent development in Saskatchewan’s uranium industry involves Canadian-based emerging resource company Marvel Discovery Corp. (TSXV: MARV) (Frankfurt: O4T1) (MARVF: OTCQB) and its latest asset acquisition from District 1 Exploration Corp.

Last week, the company announced it will assume all obligations under District 1’s option agreement to acquire a 100% interest in the Highway North property located in the Athabasca region of Saskatchewan.

The Highway North property is located 70 km southwest of the former producing Key Lake uranium mine. Aptly named for its location along Highway 914, the property consists of five contiguous claims totaling 2,573 hectares.

The Key Lake deposit, which is northeast of the property, contains two mineralized zones that historically produced a total of 4.2 million tonnes of product at an average grade of 2.1% U3O8.

Only 21 drill holes have been drilled on the property thus far totaling 3,527m between 1980 and 2008. Surface exploration and drilling have verified the presence of uranium mineralization along the Highway zone, with grades up to 2.31% U3O8 over 0.29 m.

Regional Geology

The deposit model for exploration on the Highway North property is a basement-type unconformity-related uranium deposit, such as those found at Eagle Point (part of Rabbit Lake), Millennium, and Gaertner and Deilmann (Key Lake).

This deposit type belongs to the class of uranium deposits where mineralization is spatially associated with unconformities that separate Proterozoic conglomeratic sandstone basins and metamorphosed basement rocks. Although rocks of the Athabasca Group and the basal unconformity do not outcrop on the property, they likely once overlaid the basement gneisses and metapelites which now do, as the current erosional edge of the Athabasca Basin, and potential outliers, is about 50 km north of the property.

In Saskatchewan, uranium deposits have been discovered at, above and up to 300 m below the Athabasca Group unconformity within basement rocks. Mineralization can occur hundreds of meters into the basement or can be up to 100 m above in Athabasca Group sandstone.

Typically, uranium is present as uraninite/pitchblende that occurs as veins and semi-massive to massive replacement bodies. Mineralization is also spatially associated with steeply dipping graphitic basement structures and may have been remobilized during successive structural reactivation events.

Such structures can be important fluid pathways as well as structural or chemical traps for mineralization as reactivation events have likely introduced further uranium into mineralized zones and provided a means for remobilization (see below).

Representative sections of three well-known unconformity-related uranium deposits of the eastern Athabasca Basin: Cigar Lake, Key Lake (Deilmann pit) and Eagle Point

The Highway Property straddles the Key Lake fault zone, an important corridor for structurally controlled Athabasca Basin-type uranium deposits.

Critical criteria on the property for these types of uranium deposits include the presence of graphitic EM conductors within metasedimentary packages, major reactivated northeast-trending fault systems that have been disrupted by obliquely cross-cutting subsidiary structures and the presence of uranium-enriched source rocks (see figure below). Exploration to date on the property has been limited.

Commenting on the company’s latest acquisition, Marvel’s president and CEO Karim Rayani, said:

“The Highway North project is perfectly situated along the Key Lake shear zone with power, water and road accessibility. The geological setting is prospective for structurally controlled basement-hosted uranium deposits such as the Millennium zone and Key Lake deposits of Cameco. Marvel continues to present stakeholders a rare opportunity having exposure to multi-commodity – critical element opportunities under one umbrella.”

Conclusion

The Highway North property adds to the company’s diverse portfolio of Canadian exploration projects that already includes gold, silver, copper and rare earth elements.

In an interview with Proactive Investors to discuss the new deal, CEO Rayani said this uranium asset acquisition may have taken investors by surprise, but in a good way. “We’ve always been a multi-commodity play, so we felt it made a lot of sense to add this to the Marvel portfolio of projects.”

The Highway North project, which was put together by an ex-Rio Tinto team, shares similar characteristics to the largest development-stage uranium project in Canada being developed by NexGen Energy, the chief executive says.

According to Rayani, Marvel is headed towards more of a “mine bank”, having already completed one spinout over the last few months, and the uranium asset may follow the same path.

“Really, we’re leveraging our shareholder base, creating share dividends and an opportunity. So we’re going against the grains as a typical mining company with gold, especially with our market cap,” he added.

With an increasing focus on nuclear power as a reliable fossil fuel replacement, it is expected that uranium exploration in Saskatchewan will continue to thrive given the province’s vast resources. A recovery in uranium prices would also stimulate a fresh wave of investments from key players in the mining industry.

With uranium prices doing well at the moment, Rayani believes that Marvel’s new uranium property, as well as its gold projects, should pick up more steam heading into 2022.

Marvel Discovery Corp.
TSXV:MARV, Frankfurt:O4T1, OTCQB:MARVF
Cdn$0.09, 2021.12.03
Shares Outstanding 79.1m
Market cap Cdn$7.1m
MARV website

Richard (Rick) Mills
aheadoftheherd.com
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