In March 2011, a massive 9.0 earthquake rocked the Fukushima Prefecture, Japan.
The quake and ensuing tsunami set off a chain of events that derailed the nuclear power industry for nearly a decade.
But things are turning around now.
And with the push for decarbonization around the world, nuclear power — and demand for uranium — will skyrocket.
But for the last 10 years, uranium prices fell hard, thanks to that disaster.
The Fukushima Daiichi nuclear power plant is one of the fifteen largest nuclear power plants in the world. When the earthquake struck, it damaged the giant plant, but it also spawned a massive tsunami.
The combination of the enormous earthquake and tsunami severely damaged the nuclear reactor. And it caused a panic among nuclear nations around the world.
Germany unilaterally pulled all of its nuclear power plants offline – even though they are nowhere near an ocean prone to tsunamis or on any major faults.
It was a panic response that fueled other countries to do the same.
Demand for nuclear fuel, uranium, plummeted. You can see the trend:
The same thing happened with uranium and nuclear stocks, with the Global X Uranium ETF losing as much as 90% of its value over the past ten years.
As you can see, the charts put in bottoms in 2016/17, then began to recover. In July 2020, the uranium price hit a nearly five-year high.
The world’s plan to decarbonize electric power hinges on a return to nuclear power.
As the fear of the Fukushima disaster fades, governments are looking at nuclear power again. That will drive demand for uranium.
In addition, we are on the doorstep of a commodity tailwind due to global money printing.
Uranium prices will soar as inflation creeps higher on the enormous volume of new money used to fight the current economic crisis.
It’s the start of a new uranium bull market. The first one in a decade.
It’s early days, but the trend is there. And it’s the perfect time for investors to take positions for the big run to come.
It’s time to buy.
And while you could buy a company that owns physical uranium, the best way to play rising uranium prices is through the mining companies.
Emerging discoveries get a lot of market attention during a bull market. And there’s a fantastic new district emerging in Argentina. And you don’t need to buy a dozen companies to pick the winner. One small mining company holds the entire 7,250 square kilometer area. That’s larger than the state of Delaware.
Blue Sky Uranium (TSX V: BSK)(OTC: BKUCF) is a C$30 million uranium explorer focused on the Rio Negro and Chubut provinces in Argentina.
The company is part of the Grosso Group, which has 28 years of experience in mineral exploration in South America. The group’s well-documented success stories include three multi-million-ounce gold and silver deposits:
It partners with industry leaders like Barrick Gold, Yamana Gold, Teck Resources, Rio Tinto and Areva.
The founder, John Grosso, is the Chairman and director of Blue Sky Uranium.
The company holds the largest uranium resource in Argentina. The Amarillo Grande project could be the first low-cost, domestic uranium supplier in Argentina.
The deposit is sandstone-hosted, a well understood style of uranium deposit. The largest uranium deposits in Kazakhstan, the world’s largest uranium producer, are this type.
The giant Inkai uranium mine in Kazakhstan contains 270 million pounds of uranium at a grade of 0.03%. Amarillo Grande has a comparable setting and higher grade.
The project has all the critical attributes of a successful mine. It has power, water, rail and road infrastructure. It’s less than a three-hour drive to major cities and airports.
The area supports mining, including gold, coal, and copper. The area is semi-arid with low environmental risk.
The deposit is near-surface, which reduces mining cost. And the host rock is loosely consolidated sediments, which means it doesn’t require blasting or crushing to recover the metals.
Amarillo Grande is a huge uranium/vanadium district.
The company discovered the Ivana deposit on the south end of the trend in 2017. It currently holds an inferred resource of 28 million metric tons at 0.037% uranium and 0.019% vanadium. It contains about 22.7 million pounds of uranium and 11.5 million pounds of vanadium.
The current preliminary economic assessment (PEA) shows an after-tax net present value on Ivana of $135.2 million. It will cost roughly $128 million to build and pay for itself within 2 years.
With all-in sustaining costs estimated at just $18.27 per pound of uranium, it ranks among the lowest cost uranium mines in the world.
It’s important to understand that the present value of the project is roughly 4.5 times the value of the company. This is a huge value proposition that won’t last long.
It’s clear that Amarillo Grande will continue to grow for Blue Sky. Geologists already identified seven new exploration targets. That includes four areas around the existing Ivana deposit.
Drilling commenced on February 1, 2021 at three high-priority targets at Ivana West, Ivana Central, and Ivana North. The goal at Ivana West is the potential expansion of the Ivana deposit. Ivana Central and Ivana North programs will follow up on potential analogues to the main Ivana deposit.
This is an exciting time for the team at Blue Sky Uranium.
Our own Gerardo Del Real sat down with the President and CEO, Niko Cacos so you can hear directly from the company. Check out the interview below.
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of Blue Sky Uranium, Mr. Niko Cacos. How have you been?
Niko Cacos: I've been doing very well. And right now that I'm on your program, Gerardo, I'm a very happy person.
GDR: I'm excited to have you back on. You had some really important news recently in regards to your Amarillo Grande uranium project in Argentina. This is one of the most consequential I believe, and important projects, uranium projects, in Argentina, in South America frankly. And I would love for you to provide a brief overview of the project for those that might not be familiar with it.
NC: Absolutely. And I think you hit it right on the button when you said it's a very important project.
There's not many new uranium discoveries around the world, let alone a new uranium district. This is an enormous district that spans over 145 kilometers, about 50 kilometers wide. Blue Sky owns all the land package in between. And there are uranium occurrences throughout this entire region.
You know, our management team, the Grosso Group has been pivotal. They’ve been the team behind Blue Sky that's been able to identify this and manage it and bring it to its head. We have an initial discovery there of just under 23 million pounds of uranium and 11 million pounds of vanadium. And I think there are two takeaways to this. Our prime objective is to make this amongst the largest and amongst the lowest cost uranium productions in the world.
|Mineral Resource Statement for Ivana Deposit, Amarillo Grande Project.
Refer to News Release dated 2/27/2019 for details
|Inferred Resources — Base Case at 100 ppm Uranium cut-off grade|
|Contained U3O8 (Mlbs)||1.1||21.6||22.7|
|Contained V2O5 (Mlbs)||1.5||10||11.5|
And we're on route to that path because our preliminary economic study that we did just about a year and a half ago demonstrates that if this were in production today, it would rank amongst the lowest producers in the world simply because the uranium occurs close to surface. And the second takeaway is we plan... you know 23 million pounds is not shabby, but we think that the district contains an enormous potential. Just like the districts in Kazakhstan, in Australia that grow up to be a hundred to 200 million pounds of uranium. And I think with the drill program that we announced today, this is what we're going to demonstrate over the next couple of months, how quickly and easily we can expand this uranium discovery.
GDR: You mentioned the group and the team, the Grosso Group obviously. Can you explain how the group, frankly, pioneered exploration and resource development in Argentina. The group has been there for decades and is largely responsible for re-inventing exploration and development in that part of the world.
NC: Absolutely. Prior to 1993, exploration and mining industry as a whole in Argentina was essentially non-existent. It wasn't until '92, '93, the Grosso Group went there, one of the pioneers of opening up mining and mining exploration in Argentina. Since that time, the Grosso Group has been responsible for uncovering four major discoveries. The Gualcamayo gold mine, which is still in production today, the Navidad silver deposit, which is one of the largest silver deposits in the world, the Chinchillas silver-lead deposit, which is currently in production and we were in partnership with SSR Mining until we sold our stake recently, and the last and most current discovery that we have that we're working on is the Amarillo Grande uranium vanadium discovery in southern Argentina. Argentina is a vast country, the eighth largest country in the world. And it’s seen very little exploration. So the discovery potential there is huge. Joe Grosso actually identified that back in 1993. And I think his record has proven correct.
GDR: Agreed. You recently raised an up-sized financing of $5.46 million. I say up-sized because that wasn't the original amount, but the interest was so high that you had to increase it. Can you speak to that a bit? And then let's get right into the recent news, which obviously is where a lot of that money is going to go. You announced a pretty comprehensive drilling program and engineering studies to advance the Amarillo Grande Project.
NC: That's right. Well, we embarked on raising some money between Christmas and New Year's, which is typically the slowest and quietest time of the year. And we initially wanted to raise to C$3 to C$3.5 million. And we received such an overwhelming interest that we expanded that to up to C$5.5 million dollars, and we still turned away millions of dollars. It was absolutely incredible. And the quality of the investors that were requesting, I'm talking about smart money, institutional investors, funds, very sophisticated family money. So this wasn't just our buddies down the street here. This was global money and smart money, so it was very, very encouraging to see.
We're well cashed up now. We have a big upcoming drill program. We've got 4,500 meters of drilling that we're about to start. It's going to take course over the next three months and we're going to test four different targets. And the idea is to take the 23 million pounds of deposits that we currently have, and our internal objective is to double it or do better than that. And that will definitely put Amarillo Grande on a world scale that will be too big for anybody to ignore.
GDR: A lot of people smarter than I am have been calling for a bull market for years on end. I called for it last year and I'd love to get your take, Nico. It appears that we finally have price action, volume, timing and fundamentals on our side for 2021 to really be a breakout year. It's being led by the equities, not so much the spot price yet. I'd love your take on the uranium market.
NC: Oh, absolutely. We've been hearing that for a long time, but being on the corporate side, we know that we have a good project. We have always focused on having a project that could be economic in the current times. Not if the price of uranium takes off like the experts say, that would just make our company that much more profitable. So yes, I agree. You know, timing is key. I think we're at an excellent time right now to embark on this drill program.
Cameco is starting to create a multi-year high. This is very exciting. I think Blue Sky and its shareholders, their time has come and we're going to see some great returns, hopefully.
I think we've seen a wholesale change in society the way uranium is viewed. I mean, uranium is a new clean type of energy. We know that it's safe. We know that it's cheap to produce and it's sustainable. And especially these small modular reactors are proving to be a real game changer globally right now. So yes, the uranium demand is definitely here. We're seeing a gap in demand over the supply that is available. And I think we're seeing that initial rise here with the equities and the spot price is also beginning to make a move in the right direction.
GDR: Niko, thanks for your time. I can't wait to have you back on and talk about the results from this drill program.
NC: Be happy to. Thank you for having me.
It’s Time to Buy Blue Sky Uranium Ahead of this Massive Emerging Bull Market
According to the World Nuclear Organization, there are fifty new reactors under construction around the world today.
Another 100 plants are in the planning stage or on order.
Thirteen new nuclear plants begin construction this year, in Argentina, China, Finland, India, Korea, Pakistan, Slovakia, UAE, and here in the U.S.
Another thirty begin construction by 2025.
As the world moves to eliminate fossil fuels like coal, nuclear power will continue to be the choice for large, baseload needs. Nuclear power is the world’s second largest source of low-carbon power. These new plants are safer and more efficient than ever before.
Over fifty countries use nuclear energy from 440 power plants. It supplies about 10% of the world’s electricity needs.
And it's growing.
Blue Sky Uranium (TSX-V: BSK)(OTC: BKUCF) is a fantastic way to speculate on uranium as the new bull market emerges.
It has a new deposit that could become a highly profitable mine. And it has outstanding exploration potential, with drilling underway right now.
Even if it never finds another pound of uranium, its current price is a fraction of the net present value of its Amarillo Grande project.
The market forces are coming together to create a powerful bull market in this non-carbon energy source.
And Blue Sky Uranium is poised to explode higher.
This is a must-own for any commodity bull investor.
Learn more about Blue Sky at its website here.
— Resource Stock Digest Research