4 days ago
Australian uranium explorers are shaping up for a tectonic shift in sentiment
Despite boasting the world's largest resources Australia's policies around uranium mining are uneven
Queensland could be ready to soften its stance if the right project comes along
Greenvale Energy is preparing to explore the high-grade Oasis project near Townsville, as it aims to become the state's yellowcake flag bearer
Australia's uranium potential is often a topic of contention, with some states having moratoriums around mining yellow cake.
That's despite a shift in sentiment across the globe, with other countries across the OECD pivoting towards nuclear energy in a bid to shore up both net zero targets and energy security.
The United States has been doing much of the heavy lifting there. President Donald Trump has big dreams to quadruple nuclear energy capacity in the US to 400GW by 2050.
It wants domestic, or at least friendly, sources of supply, as the US competes with Russia and China to claim its status as an "energy superpower".
That macro demand picture and relatively stable prices of US$70/lb for spot and US$80/lb for term contracts, has exploration activity rising in Australia even without a nuclear industry of our own.
Greenvale Energy (ASX:GRV) is one company gearing up to start drilling at its newly acquired Oasis project in Queensland, and CEO Alex Cheeseman told Stockhead that uranium mining the state might not always be in the doghouse.
'The understanding we have from engagement with government is that the current Queensland government will look to and consider overturning the uranium mining ban if and when a project of merit is put forward,' he said.
'I don't want to anchor the company's hopes on the whims of government, so we spread our risk by having projects in other states and territories as well.
'But Queensland is a mining state, and with the demise of coal mining they're going to need to start looking at other commodities and a sensible approach to uranium mining I think is definitely on the cards.'
It also comes down to a marked change in sentiment globally towards nuclear energy, especially if we want to hit net zero targets.
'Australia has been mining and exporting uranium for 50-60 years. We don't have a nuclear industry in Australia but it feeds into a global market,' Cheeseman said.
'The US, China and even Europe are doubling down massively on nuclear energy for future energy requirements to achieve net zero, and for zero carbon emissions energy supply into the future.
'And Australia has always been involved in digging things out of the ground, concentrating them and then sending them off elsewhere to feed into a global supply chain – whether it be iron ore or lithium. I think uranium is part of that.
'I think there's a misconception that if you're mining uranium you need to have a nuclear industry in Australia, but we don't have battery manufacturing in Australia (and) make a lot of money selling lithium off to China, for example.'
Value proposition
As for Oasis, if it eventually gets into production, GRV sees similarities to the monstrous Rossing uranium mine in Namibia, once owned by Rio Tinto (ASX:RIO) and now the longest running uranium mine in the world.
Originally found in Australia's original uranium exploration rush in the 1970s, Oasis hosts historical intercepts up to 1m at 0.72% U3O8 (15.8 lbs/t).
Cheeseman said the main appeal was picking up a project that already had some known mineralisation, 'and the potential for a defining a resource that warrants a future mine.'
A recent $1.8m cap raising for the company, which features Pilbara Minerals (ASX:PLS) founder Neil Biddle as its chair, will support Greenvale's plans to drill the project and will also drive the next phase of exploration across its Elkedra and Douglas River Uranium Projects in the Northern Territory.
'The value proposition we have is that we've been investing in securing uranium projects and starting early-stage work for a good 9-12 months so we're really an early mover,' Cheeseman said.
'We're not waiting until the market gets super-hot and then piling into it like most juniors do.
'We think there's a long-term structural deficit of uranium supply, that's putting upwards pressure on pricing, so we've decided to invest early in early stage exploration and then we'll advance projects to make discoveries, define resources and be ahead of the pack as the price really starts to gain traction.
'We see something coming and we want to be ahead of the curve.'
Who else has an Aussie uranium project?
Boss Energy (ASX:BOE)
The most notable player in Australia is Boss with its Honeymoon mine in South Australia, where production kicked off at the start of 2024 after it was closed by previous owner UraniumOne back in 2013.
Honeymoon is now one of three active uranium producers in Australia alongside BHP's (ASX:BHP) Olympic Dam (where it is a by-product of copper and gold mining) and the Beverley uranium mine.
Boss' first full year of operations was a good one, delivering 872,607lb of drummed U3O8. Second half costs clocked in at $35/lb (US$23/lb) on a C1 basis.
But the long term outlook for the mine was significantly written down. While a ramp up to 1.6Mlb at C1 costs of $41-45/kb (US$27-29/lb) and AISC of $64-70/lb (US$41-45/lb) is expected in FY26, the company warned that it may be unable to hit the previously assumed 2.1Mlbpa nameplate capacity of the mine.
Boss shares have tumbled from $4.67 on June 30 to $1.77, with MD Duncan Craib already announcing before the guidance update that he would step aside for former IGO executive and company COO Matt Dusci.
Deep Yellow (ASX:DYL)
The company's merger with Vimy Resources included the 7.1Mlbpa Mulga Rock project in WA, which could start production as soon as 2028.
Rising uranium prices have sent Deep Yellow's shares some 32% higher since it announced a merger with Vimy Resources.
The project was the only future mine approved by the pro-uranium Barnett Liberal-National Government in WA before the entry of the anti-uranium McGowan Labor Government in 2017 which also beat a five-year substantial commencement deadline set out in its environmental approval.
A DFS on the ~15-year Mulga Rock is currently underway.
Deep Yellow also owns the more advanced Tumas project in Namibia.
Core Energy Minerals (ASX:CR3)
Last month CR3 kicked off maiden drilling at its Cummins uranium project in South Australia targeting 'roll front' style mineralisation.
Historical drilling data – validated by French state-owned uranium exploration company Areva in 2009 – points to several broad, shallow zones of radioactive mineral concentrations over an area of more than 10km.
CR3 has since interpreted several areas to host roll front mineralisation prospective for uranium, representing high-priority areas for the maiden drilling campaign.
The company also owns the Brooker project, which sits directly to the northeast of Cummins along the western margin of the Port Lincoln Uplands in an area with several uraniferous granite source rocks and uranium occurrences.
Koba Resources (ASX:KOB)
KOB has notched up three new high-grade uranium finds at its Yarramba project in the past 12 months, right next to producing operations in South Australia.
The latest find, the Everest prospect, is immediately north of Boss' 10.7Mlb Jasons Deposit and the Honeymoon uranium mine.
That addition takes the count to three high-grade discoveries for KOB, all grading above 1000ppm, joining Berber (1.6m at 1026ppm) and Chivas (0.5m at 1028ppm).
With heritage approvals now in hand, the company is set to begin infill and extensional drilling in September.
Heavy Rare Earths (ASX:HRE)
Since pivoting towards uranium last year with the acquisition of three uranium projects in South Australia near established mining operators, Heavy Rare Earths has been positioning for potential M&A interest if a major find emerges.
Until that point, the company was focused on its Cowalinya rare earths project near Esperance, WA, a deposit comparable in style to the massive ion-adsorption clay types found in southern China and Myanmar, where most of the world's heavy rare earths are sourced.
But, with an eye on the long-term value of critical minerals, the company viewed the opportunity to acquire three assets from Havilah Resources (ASX:HAV) – in one of the world's premier uranium producing jurisdictions – as highly compelling.
