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A Patch Of Green In The Commodity Sea Of Red: What's Driving The Outperformance In Uranium?
- Uranium spot prices have rebounded from lows of $28/lb earlier this year to almost $42/lb currently. Transaction volumes have been low, but it appears sellers are becoming more selective on price.
- The first sign of Japanese restarts has surfaced, with reports of a positive vote to approve the start-up of two reactors at the Sendai nuclear plant in early 2015.
- Long-term fundamentals remain unchanged, with limited recent supply growth as a result of prolonged depressed uranium spot prices and the resulting limited investment in new sources. Inventories remain high.
- Western hemisphere reactor fleet projections are fairly flat, while Eastern hemisphere growth projections are material. China leads in reactor build figures, with plans to match the entire U.S. reactor fleet.
- In this article I also briefly revisit Fission Uranium as investors await the maiden NI 43-101 compliant resource estimate for the company's Patterson Lake South uranium deposit.
Firebag River - A Red-Hot Canadian Frac Sand Deposit?
- Athabasca Minerals is currently awaiting final permits for the Firebag River frac sand project, north of Fort McMurray, Alberta; a potentially highly strategic project with access to road and rail.
- Over an area covering 500 acres, the unconsolidated sand layer at Firebag has been auger-tested down to 50 feet, and has only 2-3 inches of overburden on top.
- Independent testing by Oklahoma-based Stimlab indicates that Firebag sand meets or exceeds API/ISO specifications for use as a proppant in hydraulic fracturing operations, and compares favorably with industry-standard sands.
- The deposit is roughly 1200 miles (almost 2000 kilometers) closer to key Canadian markets than competing Midwestern U.S. sources, potentially offering a $36-$48/tonne transportation cost advantage.
- This unknown and profitable aggregate producer may be positioned to become a key supplier of frac sand in the rapidly-growing Canadian market, with upside of ~200% from current levels.
Canacol Energy: Successful Shale Oil Test Underscores Compelling Value Proposition
- Canacol has tested up to 590 bopd from the high-impact MA-1 La Luna shale-oil well where the company is partnered with ExxonMobil.
- Importantly, the quoted flow rates are under natural flow conditions without pump assistance. The MA-1 was a vertical well and was not fracture stimulated.
- The company has 545,000 net acres of exposure to the play; Shell and Conoco are partners on two of Canacol's adjacent blocks.
- Canacol is trading at ~60% of my extrapolated NAV, adjusted for new discoveries, and provides leverage to material upside optionality even assuming zero oil-shale value. The risk-reward appears excellent.
- A Jewel In The Crown? Hoyada Exploration Well Finds Vaca Muerta Oil
- From Frac Sands To Oil Sands: Athabasca Minerals Has It Covered
- A Diamond In The Rough In Argentina's Energy Sector?
- BNK Petroleum's Latest Caney Well Demonstrates Further Operational Success
- Patterson Lake Asset Consolidation: Fission Aims For Fusion With Alpha
- Has Patterson Lake Become Too Good To Ignore?
- A Primer On Uranium Revisited: The Patterson Lake Project Has Come A Long Way
- BNK Petroleum: Cheap Exposure To An Emerging U.S. Tight Oil Play
- Q1 Drilling Shows Patterson Lake Makes The Grade: Literally
- Patterson Lake: Is The Past The Key To The Present?
- Pan Orient Serves Up A Mixed Bag
- Patterson Lake Speaks Again: What The Geology Is Saying
- Patterson Lake Project Valuation: Using History As A Guide
- Patterson Lake Delivers... Are Investors Home?
- The Anatomy Of A Uranium Deposit
- Game-Changer: The Athabasca Uranium Discovery Everyone Is Talking About
- The Athabasca Basin Uranium Discovery That's Starting To Get Some (Warranted) Attention
- Pan Orient Energy: Out Of The Frying Pan And Into The Fire
- Choo-Choo! The (Pan) Orient Express Adds More Barrels To Its Cargo
- The Athabasca Basin Heats Up - Fission Gets A Bid And Patterson Lake Drilling Is Underway
- The (Pan) Orient Express - A Highly Skewed Risk/Reward Situation
- A Primer On Uranium And The Athabasca Basin Discovery You Haven't Heard Of - Yet