GUE starts uranium drilling program

Yesterday, our US uranium and enrichment Investment, Global Uranium and Enrichment Limited (ASX: GUE) announced that it has commenced its maiden 40 hole, 4,000m drill program at the Maybell Uranium Project in Colorado.

Here, GUE is targeting both shallow high-grade mineralization around historic open pits as well as deeper potential bulk tonnage mineralisation.

There are historical mine pits scattered all over the project area:

(Source)

So we think there is a good chance that GUE will be able to uncover some high grade mineralisation at the project in Colorado USA, which has an exploration target of 4.3 to 13.3Mlbs of uranium.

Today’s announcement noted that, “The Exploration Target was limited to areas around historic pits incorporating only a small portion of entire Project area.”

So there could be some hidden upside here for GUE, which is conducting the 40 hole, 4,000m program at a time when the uranium spot price remains sharply elevated:

(Source)

GUE's progress at Maybell comes at an opportune time as the U.S. government has stated its intention to revive and strengthen the domestic uranium mining industry, which is considered a national security priority to reduce reliance on foreign sources like Russia.

With its uranium projects across North America and a stake in a potentially disruptive uranium enrichment technology, we think GUE could emerge as an attractive strategic partner or acquisition target for major players looking to secure domestic U.S. capabilities.

How does this news impact our GUE Investment Memo?

Objective #3: Drill at least two projects

OKR 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 OKR drill at least two of these projects. Drilling is what will ultimately build value and scale in its assets.

Milestones
🔲 Drilling campaign delivered
🔲 Drill results reported

Source: GUE Investment Memo 20th February 2023

GUE has already drilled its most advanced project (Tallahassee) earlier this year.

Tallahassee is where GUE has a JORC 49.8 Mlbs uranium resource and where the company is looking to start a scoping study.

With this next round of drilling (Maybell) GUE would be drilling its second project this year and completing our objective.

Objective #4: Deliver at least one resource upgrade

We want to see OKR deliver a resource upgrade, which we think will most likely be at its most advanced project in Colorado, however priorities may change based on exploration success.

Source: GUE Investment Memo 20th February 2023

GUE could deliver a resource upgrade at both its Tallahassee project AND its Maybell project.

The drilling at Tallahassee was network drilling which means GUE drilled areas of the resource it knew there would be uranium so the likelihood of an upgrade is smaller.

With Maybell, there is no existing JORC resource so if the company can deliver a resource estimate here GUE would be completing this objective also.

What are the risks?

Exploration Risk

There is no guarantee that OKR’s upcoming drill programs in North America are successful and OKR fails to find economic uranium deposits.

Source: GUE Investment Memo 20th February 2023

What’s next for GUE?

Scoping study at Tallahassee uranium project (advanced JORC resource) 🔄

GUE recently finished drilling this project and has already put out all of the drill results. Next we want to see a scoping study for the asset which is due for completion in Q3-2024.

Drilling at Maybell project in the US 🔄

Drilling is has commenced.

At Maybell, GUE has an exploration target of 4.3 -13.3Mlbs of uranium and historical intercept grades are high enough that we think any surprise drill results could be a share price catalyst for GUE.

Further updates on uranium enrichment technology (Ubaryon) 🔄

• 🔄 Further validation and extend the enrichment performance (show how well it works)
• 🔲 Achieve continuous operation at bench scale (scale up process)
• 🔲 Regulatory approvals