GUE Puts out Further High-Grade U Drilling Results
Our US uranium Investment, Global Uranium and Enrichment Limited (ASX: GUE) has announced further high-grade drilling results from its maiden drill program at the Maybell Uranium Project in Colorado, USA.
Highlights include:
- Hole MB-005 intersected 4.6m at 0.30% (2,996ppm) U3O8 from 85m, including 2.4m at 0.539% (5,387ppm) U3O8
- Other thick, high-grade intercepts included:
- 4.8m at 0.095% (946ppm) U3O8 from 77.7m in MB-012
- 11.9m at 0.056% (565ppm) U3O8 from 85.3m in MB-012
- 2.5m at 0.164% (1,637ppm) U3O8 from 73.4m in MB-010
These latest results from GUE's maiden drill program at Maybell continue to deliver significant high-grade uranium intercepts outside of the historical mining areas.
The thick, shallow zones of high-grade mineralisation being intersected bode well for GUE's plans to establish a JORC-compliant resource estimate at Maybell.
This comes as a follow up to our most recent coverage of results at Maybell:
It also comes at a time where the macro environment for US uranium is rapidly improving.
Leaders from the United States, Canada, France, Japan, and the United Kingdom - “the Sapporo 5” on the sidelines of 68th International Atomic Energy Agency General Conference in Vienna committed US$4.2BN into improving nuclear fuel production capacity over the next 3 years.
With US$5.6BN already mobilised to date - it appears the group is ahead of schedule and backing words with action.
Meanwhile, data centre demand in the US has seen the owner of the shuttered Three Mile Island nuclear plant in Pennsylvania commit to investing US$1.6BN to revive it, agreeing to sell all the output to tech titan Microsoft Corp:
(Source)
All to power AI driven data centre demand.
At some point we believe this domestic energy demand will translate to higher uranium prices that can incentivise US production.
Another interesting uranium industry story also broke this week as well:
(Source)
Further evidence that momentum is building in the US uranium market.
How does this impact our GUE Investment Memo?
This drilling moves GUE towards satisfying Objective #3 from our GUE Investment Memo:
Objective #3: Drill at least two projects
GUE has a portfolio of US based uranium assets at different levels of maturity (3 projects across Colorado and Utah) it also has ground in the Athabasca Basin (6 projects), Canada, a prolific uranium region. We want to see GUE drill at least two of these projects. Drilling is what will ultimately build value and scale in its assets.
Source: 20 February 2023 GUE Investment Memo
We think more pounds in the ground should help underpin GUE’s valuation as the US domestic uranium industry gets back to significant production levels in the coming years.
What’s next for GUE?
Upon completing the current drill program, GUE plans to prepare a maiden mineral resource estimate for Maybell.
Depending on the resource size and economics, next steps could potentially include additional drilling in 2025 and a scoping study to evaluate development options.
Beyond that, a Scoping Study is due at GUE’s advanced ~52Mlb JORC resource in another part of Colorado this quarter.
