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The other yellow metal’s time to shine

September 30, 2020
Warrick Lace

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The other yellow metal’s time to shine

Gold has grabbed investors’ attention in 2020 with dream outcomes for holders of a number of ASX-listed small-cap gold stocks. But there is another yellow metal where fundamentals are lining up for potentially a significant rerating of relevant stocks – Uranium.

Gold has grabbed investors’ attention in 2020 with dream outcomes for holders of a number of ASX-listed small-cap gold stocks.

But there is another yellow metal where fundamentals are lining up for potentially a significant rerating of relevant stocks – Uranium.

The Uranium sector was hard hit by COVID-19 taking out critical supply where a supply-side deficit already existed after years of a depressed Uranium price, which resulted in reduced production and led to a lack of investment into new Uranium mines. On the flip side demand for Uranium has strengthened, mostly as a result of continued construction of nuclear power plants throughout the world to generate low carbon emission and reliable base load power. As a result the Uranium price has responded positively in 2020 showing strong growth in the graph below.

Who is set to benefit

Uranium companies that have anticipated this and been actively progressing projects stand to benefit.  ~$10m market cap Marenica Energy Limited (ASX: MEY) is currently the largest uranium exploration tenement holder in Namibia, a world-class uranium country with an established mining industry.

Marenica is targeting uranium which has been deposited in near-surface palaeochannels (ancient river systems). The exciting part for Marenica is that the area at Hirabeb where a monstrous discovery was made this year had never been drilled, until now.

“The palaeochannel is mineralised for the majority of its length, providing Marenica with a multitude of follow-up exploration targets with the potential to host a significant uranium deposit,” managing director Murray Hill says.

 

First mover in breakthrough uranium exploration process

Marenica has a unique patented process developed in collaboration with the CSIRO, called U-pgradeTM, and it  has the potential to reduce Uranium mine CAPEX and OPEX costs by a massive 50%. 

This breakthrough provides Marenica with a first mover advantage at a lower uranium incentive price to their competitors and they are now perfectly positioned to be an early mover to fill that supply gap.

 

What is U-pgradeTM

  • Marenica’s 100% owned and patented breakthrough beneficiation process
  • U-pgradeTM rejects >95% of mass prior to leach
  • U-pgradeTM shown to increase Marenica Project ore grade from 93 ppm to ~5,000 ppm U3O8
  • U-pgradeTM in addition, rejects acid consumers and thereby reduces acid consumption

 

Significant Cost Savings

  • Potential to reduce CAPEX and OPEX by ~50% on surficial uranium ores, compared with conventional processes
  • Produces low-volume high-grade concentrate which reduces capital costs of processing plant and tailings; and operating costs for handling, processing and tailings
  • Provides optionality for project development 

 

Next to their large scale Namibian tenement holdings with successful uranium exploration in progress, MEY also has a large portfolio of under-developed high-grade uranium assets in Australia. The Company has resources of 94.4 Mlbs of uranium on its Australian and Namibian tenements. 

Headed by an experienced team with a proven track record in exploration and development of mining projects, MEY is an exciting first mover in the uranium exploration industry. If you would like to stay updated on their latest news, please register here.

 

 

Reach Markets have been engaged by MEY to help manage their investor communications.


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