Stars align for PLN in perfectly timed move into US uranium sector

News.com.au

20 hours ago

Pioneer Lithium has diversified into uranium at just the right time
Its Skull Creek project in the USA contains 17km of strike in north-western Colorado
Uranium developments are high on the agenda of US President Donald Trump
They say the best players make their own luck.
That certainly applies to Pioneer Lithium (ASX:PLN), which has engineered an incredibly well-timed shift from its namesake commodity into a corner of the resources market with serious momentum behind it.
With lithium prices dropping to four-year lows it made sense for the company from the stable of Robert Martin, a major early mover on the Canadian lithium, to diversify into a new commodity.
Gold may be the obvious choice right now, with prices recently running to record highs.
But there could be greater gains to make in markets yet to have their day in the sun.
The move was to acquire two intriguing uranium projects at a time when spot prices suggested a market in a lull.
Those assets – Skull Creek in Colorado and Warmbad in Namibia – came into the company with uranium at US$64/lb, down close to 40% from its January 2024 highs of US$107/lb.
But prices of the nuclear fuel staged a rebound since then. And the decision to pick up Skull Creek could be the best timed move of the lot.
Within four months, US President Donald Trump signed a wave of sweeping executive orders designed not only to dramatically increase the countries nuclear fleet – quadrupling its power supply by 2060.
But the EOs also included calls to majorly expand the country's domestic uranium production and enrichment facilities. Facing declining capabilities in each, the US' ~100GW nuclear fleet is now reliant on Russian supplies to remain operational – a deeply tenuous position.
"It gives you a lot of confidence to know that the Federal Government is 100% behind exploration and development of uranium projects," PLN CEO Michael Beven said.
"In other jurisdictions, even in Australia, we see governments change their mind on their attitude towards uranium really quite regularly.
"It's a real strong indicator the US has identified that uranium as an energy source and nuclear power as an energy source needs to be the primary focus in order to address climate change and provide green energy."
Up Skull Creek
Beven's ascension to the hot seat at PLN came after he consulted to the company, conducting due dilligence on the deals that saw Skull Creek and Warmbad picked up for a collective $850,000 in cash and $850,000 worth of PLN shares.
Along with small royalties, deferred consideration is also due of $1m should Pioneer outline a JORC resource of 30Mlb at 300ppm U3O8 or higher at Skull Creek and $1.5m if it outlines a JORC resource of 30Mlb at Warmbad of between 101-199ppm U3O8, and an additional $1m for a resource of 30Mlb at 200ppm or higher.
That suggests the sellers of the assets had a degree of confidence something of substance will be found.
The immediate focus is Skull Creek in north-western Colorado, where some 17km of strike has been identified based on historic rock chips containing anomalous uranium.
They have peaked as high as 1240ppm U3O8 in the Sego Sandstone and Carbonaceous Shales that make up the project's prospective geology.
Background uranium is just 2ppm U3O8, giving a glimpse of the promise at the project, which sits in a tier-1 province for in-situ recovery uranium production across Colorado and Wyoming.
There were reports of a claimed "40Mlb resource" at the site dating back to 1956 in the early days of the US uranium industry.
Beven says the definition of resource here is "very loose" compared to modern standards and certainly can't be relied on. But it does show strong ammunition the uranium mineralisation is widespread at the site.
It's early days, but rock chip sampling is generating super results.
"Rock chips have been really quite good. The highest grade we had there was 1240ppm," he said.
"The lowest we had was 10ppm. Background uranium is about 2ppm.
"So even the lowest rock chip that we got was 5x background radiation levels."
That's especially since the program wasn't planned to target only where the company thought the highest grades would be found.
"It was really just walk across the ground, map out where we find the Sego Sandstone outcropping, take samples of different types of rocks so that we can get the geochemistry of them so we can understand what the rocks are and where they're occurring, and get that very basis foundation," Beven said.
"So for a programme like that, which isn't designed to try and find high-grade mineralisation, to come back with rock chips from 10ppm to 1240ppm across pretty much the entire strike of the project is more reinforcement that we have a very large uranium bearing system there with elevated uranium far beyond background."
When to drill
The sandstone hosted nature of the mineralisation at Skull Creek suggests it will be amenable to ISR mining, a cheap recovery method for shallow, low grade resources common across the United States and particularly operations in Wyoming and Colorado.
In some ways it bears a resemblance to large deposits found in Western Australia, one of the world's best endowed uranium regions, with exploration geologist Mark Cousins remarking its similarities to the Bennet Well deposit in WA's north held by Cauldron Energy (ASX:CXU).
The distinction between Colorado and WA, or course, is that unlike in WA uranium mining where PLN is exploring is supported by local regulators.
Beven estimates it will take around two months to outline and prioritise targets for drilling with a two phase soil sampling program recently announced.
The first phase will target four prospect areas: County Line, Blue Mountain, Skyline and Railroad, which have been previously identified in radiometric surveys and rock chipping.
The second will see PLN collect samples along the project's 17km strike, with the goal of identifying uranium bearing Sego Sandstone and Carbonaceous Shales obscured by soils.
With the US aiming to recover its domestic uranium output – currently equivalent to only around 2% of its annual reactor demand – there is serious steam from lawmakers to get moving on defining new deposits like, potentially, Skull Creek.
But the jurisdiction is attractive for many other reasons, Beven added.
Early analysis suggests style of mineralisation bears strong similarities to mines in Wyoming and Colorado, something that will be teased out in further testing, while the project has relatively simple permitting ahead of it given it sits entirely on ground managed by the Bureau of Land Management.
A major highway runs just 400m from the edge of the project area, adding to its atractiveness.
A Rossing lookalike
Over at Warmbad in Namibia, some 30,000-odd metres of drilling have already been completed, outlining a deposit with similar characteristics to the world's longest continuously operating uranium mine, Rossing.
"A company called Zemplar, which was a TSX listed company back in 2007 to 2009, did about 30,000m worth of drilling there and actually found uranium mineralisation in the ground, which is a sort of low grade Rossing style mineralisation," Beven said.
" So it's hosted within Alaskalite granite. It's rare that you get to pick up an exploration project where you're able to look at the historic work and know you've got a deposit already sitting in the ground that you just need to build on.
"Some of the work that they did between 2007 and 2009 just wasn't quite up to the standards of today to be able to makea JORC compliant resource out of it. But that's the exciting bit – we know there's mineralisation in there. and we only really need to do a small amount of work to upgrade it to where we can have a JORC compliant uranium resource."
PLN is aiming to come out with an exploration target in the near future building off that historic drilling and run new geophysics to identify mineralised pods missed by previous explorers.
At the same time, Beven says the company's flagship lithium project Root Lake in Ontario, which sits between known pegmatite-hosted resources, remains a terrific options for when the lithium price begins to recover.