Standard Uranium Ltd.
- TSX-V: STND
- Shares Outstanding: 45M
- Share price C$0.30 (21.02.2020)
- Market Cap: C$13M
The uranium space was incredibly saturated before it crashed after Fukushima in 2011, with c. 50 companies growing to 400 players, all vying for a piece of the yellowcake market. However, the vast majority of these producers sank because of plummeting uranium demand and plummeting uranium prices after 2011, leading to a much lower number of active uranium players today.
In recent months, there have been numerous macro-catalysts that have instilled an undeniable sense of bullishness into the hearts of uranium investors. Before the COVID-19 pandemic, there was mounting speculation that utility companies were close to depleting their uranium inventories. This was evidenced by a skyrocketing EUP and UF6 conversion price. Once COVID-19 induced lockdowns in countries around the globe, these supply frailties became even more exposed.
In recent weeks, the U.S. Department of Energy’s long-awaited Nuclear Fuel Working Group report was released, which outlines policies to help restore America’s competitive nuclear energy advantage. The shutdown of Cameco’s Cigar Lake uranium mine and Port Hope uranium conversion facility, in addition to Kazatomprom announcing significantly impaired uranium production that it will not make up the tonnes for, evoked even more bullish sentiments. While Port Hope has recently gone back online, Cameco clearly appears to want uranium inventories to be de-stocked no matter the cost. Kazatomprom has talked a similar language, stating that the carry-trade of uranium has become increasingly obsolete.
Baby-faced uranium players are seeking to capitalise on this positive momentum. Uranium investors will be hoping they don’t flood the market again!
Standard Uranium (TSX-V: STND)
Today, Jon Bey, President & CEO of Standard Uranium (TSX-V: STND), joined us to provide an exclusive announcement to our viewers. Standard Uranium is the first of this new wave of junior uranium miners.
Matthew Gordon interview Jon Bey, 2nd June 2020
Standard Uranium (TSX-V: STND) is a Canadian uranium early-stage exploration company. The company conducted its IPO on the 29th of April. Standard Uranium’s primary focus is on its Davidson River flagship project, which lies within the Southwest Athabasca Uranium District; however, the project itself lies just outside the Athabasca Basin (renowned for uranium discoveries). I wanted to know if Bey could deliver a highly-prospective plan to investors in a reasonable timescale. It’s early, super early, but they are in the right postcode.
The Business Model
Standard Uranium’s first port of call is to make a uranium discovery. Standard Uranium does not want to develop Davidson River and flip it. Instead, Bey thinks he has assembled a team that can take the project all the way through to production in a new uranium bull market. That is the stated intent. The team appears to have the specific locational experience needed, and the Davidson River project itself is untouched; Bey regards it as highly-prospective.
Prior to 2012, the Southern Region of the Athabasca Basin was unavailable for exploration courtesy of coal/oil & gas reserves. However, when radioactive boulders were discovered in the region, it was opened up for exploration. The Triple R deposit was uncovered as a consequence, which was eventually taken about by Fission Uranium. Fission’s flagship project, The PLS project, is host to the Triple R deposit. Standard Uranium acquired its project in mid-2017 after a 3-year long legal dispute. NexGen and Fission Uranium were making exciting discoveries in the surrounding area at the time while Davidson River went untouched, and Bey felt confident Standard Uranium could replicate the success of his uranium peers. After all, Davidson River sits in the same conductor as these existing uranium projects: the Patterson Lake conductor. The company spent the next 2-years studying geophysics to see if the patterns indicated the existence of the conductor.
As we began to ask questions about how Bey intends to finance the development of Davidson River, he dropped the news that his company has signed an engagement letter with Red Cloud and Eight Capital to raise C$3M. The capital will consist of a combination of combined hard dollars and flow-through dollars. C$2M has immediately been assigned to drilling operations at Davidson River. The drilling should start in mid-July 2020. This should get the Standard Uranium train rolling. With generalist investors looking at uranium again, it will be interesting to see how the market reacts to this new wave of uranium juniors entering the fray. Bey hopes the deal will be closed by the end of June, notwithstanding continued COVID-19 disruption.
Moving onto the G&A side of things, Standard Uranium practices a “very low” remuneration policy. The monthly remuneration burn rate is c. C$25,000. This is aided by certain management members being contracted on a part-time basis. Bey himself claims to have spent the entirety of 2019 taking a salary of next to nothing in order to cover costs. He has instead been paid via shares. It appears at this point that he is quite well aligned with shareholders, as is the rest of the management team and board.
I think that Standard Uranium is just the beginning of a wave of new uranium junior entrants. Thor Mining announced its entrance this past week: a team with little uranium knowledge and a business that has failed to deliver its tungsten/molybdenum project and presided over 2-years of falling share price. The uranium space needs teams who understand uranium and aren’t switching horses mid-race. The uranium space is starting to really heat up and generalist investors are coming back. However, not all uranium companies will work, even in favourable market conditions. It’s important to keep yourself locked into CruxInvestor.com for the latest news and insights into the wild and opaque world of uranium.
As for Standard Uranium, what did you make of Jon Bey? Do you think his company has what it takes to compete in this new era of uranium interest? Comment below and we will respond.
Company Website: https://www.standarduranium.ca/
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