Uranium appears to have some serious positive momentum right now, with investors scrambling to get exposure to further upward movement in the commodity price.
There are a number of factors at play here, however a key one is that the US government has recently announced substantial new support for domestic uranium producers.
The Trump Administration is seeking $1.5BN over 10 years to buy uranium from US mines and shore up a domestic stockpile.
We have just come across a $5M capped micro-cap ASX stock that appears highly leveraged to these macro forces – plus its own imminent exploration campaign.
This company is gearing up to undertake exploration in a region which historically provided the most important uranium resources in the USA – the prolific Colorado Plateau uranium province.
This tiny ASX stock has 1,500 hectares of ground within trucking distance to the White Mesa Mill, operated by Energy Fuels Inc (TSE: EFR) – which is the only conventional fully licensed and operational uranium / vanadium mill in the US.
Capped at $289M CAD, Energy Fuels is a well-established, leading US uranium producer with a proven track record.
Given the pent up US government demand for uranium, Energy Fuels is going to need to keep finding more local uranium and keep feeding its White Mesa mill.
That brings us back to our $5M capped ASX explorer – it needs to find “pounds in the ground” first, enough that would be of interest to the local mill owner.
To that end, this company appears well positioned.
It is of course in the right region – which has historically produced in excess of 17.5 Mt of ore averaging 2,400 ppm (92 mlbs U3O8) and 12,500 pp, V2O5 (482 mlbs V2O5).
It has walk up drill ready targets in its possession, and the company will soon be running down hole logging of historical drill holes to help target new drilling.
This will follow up previous high grade assay results of 1.39% U3O8 and 2.46 V2O5 and 0.12% U3O8 and 3.89 V2O5. The ground has sandstone hosted mineralisation with a shallow ore horizon, which bodes well for further exploration.
It is very early days here, the stock is highly speculative – however it looks to be breaking out, and given its current low market cap and the potential of its ground we couldn’t ignore it.
With Bill Gates supporting nuclear as an efficient emission free energy source, and the US government pouring billions of dollars into the industry – the macro forces look right for uranium once again.
Alongside a number of high profile mining investors, we have just taken a position in this stock and intend to be long term holders – we are looking forward to seeing how this company’s strategy plays out.
Read the full article here – https://www.nextminingboom.com/5m-asx-micro-cap-launches-uranium-exploration-near-only-us-processing-facility/