The United States Congress recently passed the bipartisan Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy (ADVANCE) Act, and the bill is expected to be signed by President Biden. It is intended to encourage and manage development of new nuclear power projects as the US seeks to create carbon-free energy sources. Considering the bill in tandem with several programs recently launched by the White House, it is clear the US is committed to responsibly advancing nuclear power as a clean alternative to fossil fuel based energy production.
America is not alone, as nuclear projects are being developed across the globe at a record pace. The International Atomic Energy Agency (IAEA) publishes yearly estimates of nuclear power growth over the next few decades. The most recent report anticipates 25% more nuclear energy capacity installed by 2050 than the one just three years prior, in 2020. The high case scenario now sees global nuclear capacity increasing 141% by 2050. The low case scenario puts the increase at 24% by 2050.
“Climate change is a big driver, but so is security of energy supply,” IAEA Director General Rafael Mariano Grossi said in describing the reasons for the improved outlook. “Many countries are extending the lifetime of their existing reactors, considering or launching construction of advanced reactor designs and looking into small modular reactors (SMRs), including for applications beyond the production of electricity.”
Canada is moving forward with an aggressive expansion plan of its own. John Wilkinson, the country’s Energy and Natural Resources Minister, recently pledged that the government would expedite the approval process for new nuclear projects (including uranium mining projects) without bypassing the necessary environmental reviews.
The economic effect of just a few new reactors is not small. A recent study by the Conference Board of Canada found that the construction of a four unit nuclear power plant would boost the country’s GDP by more than US$66 billion, with the construction phase alone generating the equivalent of 20,000 full time, well-paying jobs. These economic numbers, combined with carbon-free electricity and an ever-increasing level of safety in the industry, mean nuclear energy development is only going to grow over the coming years.
But what does it take to fuel a nuclear reactor? Uranium. And that market has been going wild over the last few years due to supply constraints and increasing demand. Fortunately for the Western world and its allies, Canada is currently the world’s second largest producer of uranium. In particular, the Athabasca Basin is home to the world’s largest high-grade uranium deposits, featuring grades up to 100 times greater than the average global ore deposits. The Athabasca Basin covers about 39,000 square miles, mostly in northern Saskatchewan. There are three uranium mines operating there currently, with three more proposed projects in various stages of review.
Still, Canada is encouraging further uranium exploration. Both the federal and provincial governments are offering tax incentives and credits to companies developing prospective uranium deposits. There is plenty of room in the market for future projects and a robust domestic supply of uranium is a matter of national security.
A Promising Start
One company to keep an eye on in the region is Stallion Uranium Corp. (TSX.V: STUD) (OTCQB: STLNF) (FSE: FE0). Stallion Uranium has assembled one of the largest land packages in the southwestern region of the Athabasca Basin, historically less explored than the more developed eastern area but home to several recent discoveries. Stallion used airborne electromagnetic surveys to identify seven named project areas across its 3,000+ square kilometers of claims.
The company recently drilled three exploratory holes in one of the most promising areas of the Coffer Project, called the Appaloosa Target. Each hole intersected anomalous radioactivity, and Stallion has a good idea from the results and the geology of the area where to focus next. With the Shea Creek Project and its indicated/inferred resource of 95 million lbs. of uranium just 13 km away and sitting on similar underground structures, the company feels optimistic about its chances for a discovery.
Figure 1 – Cross section of CF24-003. The figure is an interpretation of the geological structure that includes an example of an Unconformity Type Deposit similar to Shea Creek
“Stallion’s maiden drill program was a big step towards a discovery hole for the company. We now know the location of the targeted structure, we know the structure is fertile from anomalous radioactivity in all 3 drill holes, we know the structure is large enough to host a significant deposit, and we know where to target next,” said Stallion CEO, Drew Zimmerman.
This is the company’s first shot, having acquired the claims about a year and a half ago, and the next drill holes will go a long way toward knowing whether it’s a success or not. But there are many more chances at discovery for Stallion, both on the Coffer Project and across its expansive and promising claim package. The demand is not going to go away, and for those in search of large upside potential Stallion’s ~$7 million market cap points the way toward plenty of headroom should one or more of these areas hold a significant uranium deposit.
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Forward-Looking Information
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Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking information contained in this document are made as of the date hereof and the Company and its directors, officers and employees disclaim any obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, you should not place undue reliance on forward-looking information due to the inherent uncertainty therein.
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Certain of the “risk factors” that could cause actual results to differ materially from the Company’s forward-looking statements include, without limitation risks relating to the following: risks related to the receipt of all necessary third party approvals, including environmental approvals; changes in project parameters as plans continue to be refined; fluctuations in prices of commodities, including uranium; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes, title disputes, claims and limitations on insurance coverage and other risks of the mining industry; delays in the completion of exploration, development or construction activities; health and safety risks; climate change risks; risks related to potential opposition from non-governmental organizations and public interest groups; changes in national and local government regulation of mining operations, tax rules and regulations, and political and economic developments in the United States; reliance on management and dependence on key personnel; competition in the mining industry; risks related to international operations; fluctuations in foreign currency exchange rates; substantial capital requirements and liquidity; uninsurable risks; litigation; risks related to and uncertainty associated with general economic conditions, actual results of current exploration activities, unanticipated reclamation expenses; and other factors beyond the control of the Company.
This document contains future-oriented financial information and financial outlook information (collectively, “FOFI”) as defined under Canadian securities laws, prepared by management about the Company’s reasonably estimated prospective results of operations, revenue, cash flows, and components thereof, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. Readers are cautioned that FOFI are not guarantees of future performance, and should not be considered as such, since actual results may differ materially from those expressed in FOFI. The Company and its management believe that FOFI has been prepared on a reasonable basis, reflecting management’s best estimates and judgments. The Company disclaims any intention or obligation to update or revise any FOFI contained in this document, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this document should not be used for purposes other than for which it is disclosed herein.
Third Party Information
Statements made are as of the date or this document. Delivery of this document does not at any time create an implication that the information contained herein is accurate as of any date subsequent to today’s date. This document includes market and industry data which was obtained from various publicly available sources and other sources believed by the Company to be true. Although the Company believes it to be reliable, the Company has not independently verified any of the data from third-party sources referred to in this document or analyzed or verified the underlying reports relied upon or referred to by such sources, or ascertained the underlying assumptions relied upon by such sources. The Company does not make any representation as to the accuracy of such information.
