GUE confirms high grade uranium, scoping study next
Today, our North American uranium Investment, Global Uranium and Enrichment (ASX: GUE) put out positive uranium drill results from its JORC resource project in Colorado, USA.
The headline result was a hit of 24.9m at 0.12% Uranium (1,168 ppm) from 154m.
Both this hole and a second hole hit mineralisation that was higher grade than historical holes at the project and the existing resource grade of 0.061% uranium (610ppm):
We see these results as an added bonus at a project that remains one of the largest undeveloped uranium projects in the US.
In short - this drilling confirms to us that this is a large, high quality project, which is in the right jurisdiction at the right time.
This drilling was designed to support a scoping study which is due in Q3 of this year, which should provide more detailed information about the economics of GUE’s project.
That scoping study, we think, will incorporate a significantly elevated uranium price:
(Source)
We remain bullish on uranium, amid recent news that the US government is banning Russian imports of uranium:
Click here to read our latest note on the the US ban on Russian uranium
This should place additional emphasis on the US cultivating a more secure domestic supply chain for its fleet of nuclear reactors - the largest fleet in the world.
We are Invested in GUE to see it contribute to securing US uranium supply and this forms part of our GUE Big Bet:
“GUE re-rates to a +$250M market cap by achieving a major technological breakthrough with its uranium enrichment technology and/or is acquired at multiples of our Entry Price by a US focussed uranium major looking to gain access to its assets and technology”
NOTE: our “Big Bet” is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is a lot of work to be done, many risks involved, and it will require a significant amount of luck. There is no guarantee that it will ever come true. Some of these risks we list in our GUE Investment Memo.
GUE’s Managing Director Andrew Ferrier noted in today’s announcement that GUE is expecting a strong period of newsflow in the second half of this year - here’s what we’re looking for next…
What’s next for GUE?
Drilling at Tallahassee project (advanced JORC resource) 🔄
Drilling has commenced in the Tallahassee project, with GUE expecting this drilling to be completed in June.
Results from the drill program will then be incorporated into the Scoping Study which will be completed in Q3 2024.
Drill permits pending for Maybell project:🔄
Drilling is expected to commence at this brownfields uranium project in August 2024, where GUE has an exploration target of 4.3 - 13.3Mlbs.
Historical grades and intercepts at this project are high and we think large enough to warrant a significant drill program (one hit was 7.3m at 2,200ppm).
GUE is planning for a 40 hole program at Maybell.
Good hits from this project shape as a potential catalyst for GUE and may catch the market off guard, if positive.
Further updates on uranium enrichment technology (Ubaryon) 🔄
At the fundamental level we want to see Ubaryon de-risk its enrichment technology both operationally and from a regulatory perspective:
🔲 Further validation and extend the enrichment performance (show how well it works)
🔲 Achieve continuous operation at bench scale (scale up process)
🔲 Regulatory approvals
We are hoping Ubaryon is successful in getting funding either from the Australian Federal government grant or through the US$700M program made available by the US Department Of Energy (DOE) .
