GTR hits extensions to its US uranium resource

Our US uranium Investment GTI Energy (ASX: GTR) just hit uranium in extensional drilling at one of its three projects in Wyoming.

GTR currently has a 7.37m lb uranium JORC resource across two of its three projects - most of that resource is at the company’s Lo Herma project.

(Lo Herma holds ~5.71M lbs of that of the total)

GTR is currently 66 holes into a 76-hole drilling program at its Lo Herma project, where the primary aim is to expand that resource.

Today’s results came from the Lo Herma project where GTR is now showing that its Resource extends to the north east.

We think the drill results bode well for a potential upgrade on GTR’s resource which CEO Bruce Lane mentioned in today’s announcement:

At the moment, GTR’s exploration target is for a JORC resource between 5.87m lbs and 10.26m lbs of uranium at Lo Herma.

We hope that GTR can increase its resources to something in the middle of that range. The closer it is to the 10.26m lbs maximum number, the better.

How today’s news impacts our GTR Investment Memo:

Objective #1: Drilling at first Wyoming Project - Lo Herma

We want to see GTR define drill targets and then drill its most advanced Lo Herma uranium project in Wyoming. We want GTR to upgrade its existing 5.71m lb JORC resource for the project.

Milestones
✅ Geophysics/Geochemical surveys
✅ Permitting/planning
✅ Define drill targets
✅ Drilling started
🔄 Drilling results

Source: “What do we expect GTR to deliver” Section - GTR Investment Memo 4 Aug 2023

Today’s results confirm that GTR is hitting extensions to its resource to the northeast of its current JORC resource.

We think there is a good chance that GTR is able to add lb’s to its resource at Lo Herma.

Existing JORC resource base and low enterprise value

GTR has an existing JORC resource base of 7.37m lbs of uranium. At our most recent Investment price of 0.9 cents, GTR trades at an Enterprise Value (EV) of $14M, giving it an EV/resource ratio of ~$1.90/Lb of uranium. Producers in Wyoming trade at >$15 per lb of uranium resources.

Source: “Why did we Invest in GTR” Section - GTR Investment Memo 4 Aug 2023

Since our Investment Memo in August last year, GTR’s share price has come down to ~0.3c per share.

GTR’s current market cap is ~$7.6M (at 0.3c per share) and the company had ~$3.1M cash in the bank at 30 June 2024.

That gives GTR a current enterprise value (EV) of ~$4.5M.

Based on GTR’s current JORC resources of ~7.37m Lb, GTR is trading at ~61c per lb of uranium JORC resource.

That is almost 1/3rd of the EV/Resource ratio from when we first put out our Investment Memo.

What’s next for GTR?

🔄 Drilling results

GTR still has another 10 holes to be completed at its drill program. We may see more results from the company between now and the drill program ending.

🔄 Rights issue

GTR is currently completing a ~$2.2M rights issue at 0.45c per share.

The rights issue is expected to close on the 23rd of September and has already been underwritten for ~$1.6M which should see GTR add to its already strong cash balance (relative to its current market cap).