As a result of a confluence of factors, uranium is having a bit of a moment – from the release of the film about nuclear pioneer Robert Oppenheimer, to the rush to decarbonise the planet as we sweltered through the hottest June since records began, to the introduction of the Biden Administration’s ADVANCE Act, which strongly favours nuclear as a means to this end.
The heavy, naturally occurring element was discovered in 1789. Australia is the world’s third-largest producer of the yellow material, although we have a no-nuclear policy and no capability when it comes to enriched uranium – including the know-how required to maintain the submarines on order through the AUKUS deal.
Once uranium’s radioactivity and role in nuclear fission was discovered, its notoriety was assured and its path through the 20th century was paved with key historical events involving atomic weapons and nuclear reactors, which have been well-covered here and elsewhere.
But uranium has a number of uses beyond nuclear power and weapons, including in medical radiation therapies, diagnostic imaging and producing medical isotopes. It is used to date geological matter in archaeology and its weight also lends it to applications in aerospace engineering.
While there is ongoing anxiety about uranium – including concerns about nuclear proliferation, domestic accidents involving reactors, the storage and disposal of radioactive waste and the potential health risks to those working with it – it is fair to say that much has been done by proponents of nuclear energy to allay these fears, from exploration all the way through to energy generation. These measures include advancements in in-situ mining to minimise waste, and smaller, safer reactors.
Hydrogen in the mix
Alongside uranium, hydrogen is gaining attention as a key player in the future energy landscape.
Hydrogen doesn't have the historical baggage uranium does – its only brush with notoriety was when the hydrogen-powered Hindenburg airship exploded into flames in 1937 – and, needless to say, the naturally occurring and abundant gas has not been used for such a purpose since. Much like uranium, we've learned to harness its potential safely and effectively as the technology has matured.
Australia primarily uses hydrogen as a raw material for industrial processes, especially in high-temperature industries and certain transport sectors.
With increasing focus from global markets and governments, hydrogen has become a vital element in achieving a clean and secure energy future. Supportive policies in tier-one nations and a unique adaptability for transportation and distribution make hydrogen an attractive option.
Hydrogen is the most abundant chemical in the universe, a major advantage. It can exist in multiple states and can be produced from diverse resources, including natural gas, nuclear power, biogas and renewable sources like solar and wind energy.
The growing interest in hydrogen stems from its ability to be produced without direct emissions of air pollutants or greenhouse gases. Derived from renewables, it can be efficiently and sustainably stored and deployed.
This quality makes it a crucial player in building a resilient and sustainable energy future and opens doors to new applications, making it a promising alternative to current fuels and imports and complementing the expanding use of electricity.
Price predictions, market movements
Uranium prices, which like most commodities depend on demand, supply, geopolitical factors and investor sentiment, experienced oversupply after the Fukushima disaster and Kazakhstan's increased production in 2011.
A bear market followed, with an 85% drop in uranium prices and a significant reduction in industry participants.
Since then there has been a steady turnaround, which had an inflection point when the uranium spot price surged by 40% between April and November 2018. Experts predict growth in non-OECD nations' nuclear commitments, indicating a potential resurgence in demand.
The recent passage of the ADVANCE Act in the US is another boost for the industry – the Act aims to promote nuclear energy development and position the US as a global leader in nuclear technology and energy.
Hydrogen stocks are enjoying a growth phase too, as countries worldwide strive to reduce carbon emissions and invest in green technologies. The International Energy Agency (IEA) says that hydrogen demand has surged over the years as we shift away from traditional energy sources.
The global hydrogen generation market is valued at US$120.77 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 5.7% from 2021 to 2028, according to a March 2021 report by Grand View Research.
Small caps busy in the last quarter
Australian uranium and hydrogen exploration forges ahead, with several ASX-listers making inroads in the June quarter. Here’s what they did.
Peninsula Energy
Peninsula Energy Ltd (ASX:PEN, OTCQB:PENMF) is accelerating its definitive feasibility study (DFS) stage two plans for in-house plant expansion and resin processing to produce dry yellowcake to enable independent production.
Pre-production wellfield construction progressed during the quarter, with well patterns in Mine Units 1 and 2 (MU-1, MU-2) readied for production operations.
The company also made upgrades to the Lance process plant in the US to accommodate low-pH ISR and released an inaugural Sustainability Report which highlighted no lost time injuries (LTIs) for five years.
During the quarter it also oversaw rollout of ISO 14001 and ISO 9001 certification processes for environmental and quality management and rehabilitation of historical trial mining areas at the Karoo Project.
It was a busy time on the financial front, with the acquisition of strategic mineral rights in close proximity to Lance, and the company rounded out the quarter with a cash balance at June 30 of US$21.5 million and a strategic inventory of 210,000 pounds valued at US$11.8 million.
The company is now undertaking a detailed evaluation of the capital and timing requirements of the revised plan.
Gold Hydrogen
Gold Hydrogen Ltd (ASX:GHY) completed two significant surveys during the quarter. Xcalibur Multiphysics conducted an airborne geophysical survey, while the CSIRO carried out an experimental soil gas survey. The results of these surveys are set to be analysed and interpreted shortly.
In the meantime, at the Ramsay Project, the company has secured multiple land access arrangements in the mainland area, including the historic Ramsay Oil Bore 1 site. The company plans to twin the historic well, which previously encountered high-purity hydrogen.
Preparations for Gold Hydrogen's maiden drilling program are well underway, with the acquisition of services from Savanna Energy and SLB (formerly Schlumberger (NYSE:SLB)).
Over at headquarters, the company made a bid to strengthen its leadership team with the appointment of Dr Josh Whitcombe as COO, effective from July 1.
With a newfound focus on the potential for natural hydrogen in South Australia, some innovative exploration techniques and a strong team, the company says the quarter has positioned it to define and develop a new natural hydrogen gas province.
Hyterra
Over the course of the quarter, HyTerra Ltd (ASX:HYT) acquired operated leases on Nemaha Ridge, spanning 7,526 acres in Kansas, USA, a promising emerging natural hydrogen fairway with a history of notable hydrogen occurrences.
These include the Scott-1 well (up to 56% H2) drilled in 1982 and the Sue Duroche-2 well (up to 92% H2) drilled in 2008. An exploration program is now underway to mature a portfolio of prospects by the end of 2023.
HyTerra also completed a geophysical survey in the Nemaha Ridge area, providing valuable data to further calibrate its geological model and identify prospects within the hydrogen play fairway. The company is now progressing discussions with advisors to conduct an independent resource assessment.
Back at the office, Benjamin Mee was appointed as executive director for Strategy and Growth, bringing his extensive experience in the oil and gas industry to drive growth and support HyTerra's mission of becoming a leading producer in the natural hydrogen sector.
With a cash balance of $1.443 million, HyTerra is well-positioned to continue its strategic initiatives and exploration efforts.
Alligator Energy
During the quarter Alligator Energy Ltd continued with infill, extensional and water sampling test drilling at its flagship Samphire Uranium Project in South Australia, mobilising a second drill rig to the site from May.
Further significant resource-related drilling results were released during the quarter and there is an updated mineral resource estimate (MRE) on the horizon for the last quarter of the year, targeting increases in both the indicated category and the overall estimate. The company hopes the ongoing drilling will help with that.
It also inked a Native Title agreement for its Big Lake Project with the Yandruwandha Yawarrawarrka Traditional Landowner Aboriginal Corporation (YYTLOAC) on May 6. The agreement allowed for detailed planning of an inaugural investigative drilling program at Big Lake.
Meanwhile, 23 priority target areas have been picked out at Nabarlek North in the Northern Territory for field work, which started post-quarter.
The company rounded out the quarter with a cash balance of $18.5 million.
GTI Energy
It was quite the quarter for GTI Energy Ltd (ASX:GTR), which on April 5 declared an initial inferred mineral resource estimate (MRE) at the Thor and Teebo uranium prospects within GTI's Great Divide Basin (GDB) Project in Wyoming’s GDB uranium district.
The inferred MRE assumed mining by in-situ recovery (ISR) methods and was reported at a cut-off grade of 200 ppm U3O8 and a minimum grade thickness (GT) of 0.2 per mineralised horizon as: 1.32 million tonnes of mineralisation at an average grade of 570 ppm U3O8 for 1.66 million pounds of U3O8 contained metal.
The Lo Herma Project’s inferred MRE sits at 5.71 million pounds U3O8 at an average of 630 ppm, while the Great Divide inferred MRE is 1.66 million pounds U3O8, giving a combined Wyoming inferred MRE of 7.37 million pounds U3O8.
The company has staked 200 additional claims (some 4,000 acres) staked at Lo Herma to cover additional areas of trends and historical drilling – increasing the total project footprint to around 13,300 acres.
Provaris Energy
During the June quarter ending June 2023, Provaris Energy Ltd (ASX:PV1, OTC:GBBLF) completed a successful pre-feasibility study for a green hydrogen export site, signed collaboration agreements for two major projects and entered a partnership for a large-scale compressed hydrogen supply chain.
In terms of technology, Provaris is qualifying materials for its H2Neo carrier, developing a prototype tank and establishing a state-of-the-art production facility in Norway.
The company also advanced the Tiwi H2 project, made progress with environmental approvals and completed a new study on compressed hydrogen marine transport.
Illustration of hydrogen production facility at Ørskog in Ålesund municipality and compression facility and terminal with H2Leo storage and H2Neo carrier with direct access to the sea.
Managing director and CEO Martin Carolan said: “The establishment of a world-class technical collaboration to deliver final class approvals for the H2Neo carriers is a game-changer for Provaris to achieve class approvals and materially reduce the cost of tank construction for the H2Neo and H2Leo carriers and position the company for a substantial market opportunity for onshore static storage tanks.
“The scale and opportunity for Provaris in Europe is being realised given its unique approach to the production, storage and delivery of hydrogen that aligns with EU policy and funding to deliver energy security and the energy transition.”
Terra Uranium
During the June quarter, Terra Uranium Ltd (ASX:T92) completed the spring phase of its maiden exploration program, which focused on the discovery of major new uranium deposits under cover on its 100%-owned Athabasca Basin Projects.
Exploration permits on all of T92’s projects were granted for three years by the Saskatchewan Government covering trail building, base camp construction at Pasfield Lake, ground geophysics, and both RC and diamond drilling.
Field operations were undertaken from T92’s all-season Base Camp on Pasfield Lake. Diamond drilling was completed on the Parker Lake Project and reverse circulation (RC) hole geochemical analyses were received from the Parker and Pasfield Lake Project with seven of the nine holes drilled having a combination of uranium, pathfinder element and clay results that are above local and regional backgrounds for the upper Athabasca Sandstones.
There were also ground electromagnetics surveys over key uranium drill targets at Parker and Pasfield conducted during the quarter, with results indicating strong basement conductors.
The first diamond drill hole was completed at the Parker Project for a total meterage of 1083.2 metres. This was the first within this 25-kilometre zone of ZTEM basement conductors on this section of the Cable Bay Shear Zone and the first of five targets along this zone to be tested.
Terra Uranium leveraged Canadian Flow-Through-Share (FTS) to raise 1.4 times the share price for drilling and field operations during the quarter, an approach it may use again for funding of further fieldwork.
Aura Energy
During the quarter, Aura Energy Ltd (ASX:AEE, AIM:AURA) remained focused on fast-tracking the development of its Tiris Uranium Project in Mauritania and the advancement of the Häggån Polymetallic Project in Sweden.
The company made hay during offtake discussions with energy utilities while there was continued positive sentiment towards nuclear energy.
There also encouraging discussions with the Swedish Government in relation to mining project approval processes and the government’s policy to transition to 100% fossil-free energy production.
Aura also engaged with the Mauritanian Government and partners relating to export permits and the expansion of the resource for the Tiris Project.
On the office front, Aura Energy completed a A$10 million equity placement and a A$0.67 million share purchase plan to fund front-end engineering design (FEED), offtake and logistics plans for the Tiris Project.