GUE to drill US uranium project in August

Our North American uranium Investment, Global Uranium and Enrichment (ASX: GUE) just picked its drilling contractor for its exploration program planned for August.

GUE will be drilling its Maybell project in Colorado, USA.

Maybell is where GUE has previously announced an exploration target of 4.3 to 13.3Mlbs of uranium.

Maybell is also one of GUE’s projects that have produced uranium in the past - the project had previously produced ~5.3 Mlbs of uranium.

GUE’s plan is to go in and drill up to 40 holes for 4,500m of drilling - starting in August.

Following the drill program, GUE will be looking to put together a maiden JORC resource estimate for the project expected in Q4-2024.

Below is a map showing where GUE plans to be drilling (yellow dots).

(Source)

How does today’s news impact our GUE Investment Memo?

What we want to see GUE deliver:

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 Tallahasee 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

GUE’s drill program at Maybell will be higher risk exploration drilling and so there is a risk GUE find nothing.

If that were to happen then its likely GUE’s share price would re-rate lower.

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 expected to commence at in August 2024.

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