Sprott Physical Uranium Trust Continues Buying Physical Uranium at a Historical Pace
Vancouver, BC
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December 05, 2023 01:23 PM Eastern Standard Time
The recent rise in uranium prices is a telling indicator of the current state of the world, marked by climate change and geopolitical instability.
Uranium has emerged as a standout in the Bloomberg Commodity Index this year, witnessing a dramatic 68% increase.1 This surge comes amid a complex global scenario where the demand for clean energy intersects with geopolitical uncertainties.
Financial markets, including funds like the Sprott Physical Uranium Trust, have added volatility to the uranium market. These funds, backed by physical uranium, grew substantially, accumulating significant stockpiles. Sprott has bought another million pounds of uranium since October, with a total near 63 million currently held by trust.2
Despite the challenges faced by nuclear power in the US and Europe, such as France's power outages and the wavering future of projects like NuScale Power's small modular reactor, the price of uranium has leaped from $30 per pound in 2021 to over $80 today.
The nuclear industry's landscape is mixed: while global nuclear output dipped slightly in 2022, positive developments, such as the new reactor in Georgia and potential continuation of California's Diablo Canyon plant, offer a glimmer of hope. At the same time, China's aggressive nuclear expansion and Japan's reactor restarts signal a robust future for nuclear power, particularly in Asia.
The immediate strength of uranium prices, however, seems more connected to current supply chain concerns than to its long-term growth prospects. The reliance on inventories, which have met about 15% of the uranium demand over the past decade, highlights the precariousness of supply. Uranium mining also faces potential disruptions, as exemplified by the recent geopolitical unrest in Niger.
Russia's role in the global nuclear landscape is complex. While not a major uranium supplier, its vast reserves and influence in the nuclear industry make it a key player, particularly amidst growing US bipartisan support for nuclear power and increasing concerns over Russia's geopolitical actions. This has led to legislative moves in the US, including the 2024 National Defense Authorization Act which aims to boost domestic uranium production and limit imports from Russia and China.
Canada’s Athabasca Basin, which hosts the world's largest high-grade uranium deposits, positions Canada as a key player in global uranium supply. Among the companies staking their claim in this prolific region is Cosa Resources Corp. (TSXV:COSA) (OTCQB:COSAF) (FSE:SSKU), a newly-listed uranium explorer with an accomplished and exceptional team that has made multiple discoveries in the Basin. Cosa boasts a highly underexplored land package located close to some major Athabasca discoveries.
Developing Significant Projects in the Uranium-Rich Athabasca Basin
On November 21, Cosa Resources Corp. (TSXV:COSA) (OTCQB:COSAF) (FSE:SSKU) announced the successful acquisition of permits from the Saskatchewan Government, enabling ground-based geophysics and diamond drilling exploration activities on their fully-owned Ursa uranium project in the Athabasca Basin.
These permits, valid until June 2025, encompass various activities such as constructing access trails, establishing camps, and conducting diamond drilling and geophysical surveys. The operational timeline includes trail construction starting in Q4/2023, followed by ground-based geophysics and diamond drilling in Q1/2024, offering flexibility for multiple seasons of drill testing.
Cosa Resources’ President & CEO Keith Bodnarchuk expressed excitement about the progress, highlighting Saskatchewan's status as a favored uranium exploration district due to the Athabasca Basin's history of Tier 1 uranium deposits and the province's stable political environment. Bodnarchuk stated, "We are pleased to have progressed Ursa to this important milestone well ahead of the upcoming winter exploration season."
The Ursa uranium project spans 65 km along the Cable Bay Shear Zone, mirroring the geological context underpinning several past- and presently-producing uranium mines. Airborne survey and 3D modeling results were announced for Ursa on November 1st, where Cosa Resources shared that well over 100-km of conductive strike was identified, including up to 25-kilometers of high-priority strike that warrants aggressive follow up work.
High-priority target areas are characterized by increased sandstone conductivity - a feature that may be reflecting increasing hydrothermal alteration at depth, something that is typical of all major unconformity deposits including Cameco’s Cigar Lake mine and IsoEnergy’s Hurricane deposit.
Cosa Resources Corp. (TSXV:COSA) (OTCQB:COSAF) (FSE:SSKU) also recently announced encouraging results at its Orion project. The survey, which was completed in conjunction with work at Ursa, has identified a several-kilometer-long sandstone hosted conductivity anomaly coincident with complex basement geology. Historical drilling to the west has previously intersected weak mineralization and favorable alteration types - both features are indicative that something bigger may be in the area. The sandstone anomaly at Orion is the strongest anomaly identified by the entire 2023 survey.
Following these positive discoveries, Cosa Resources intends to conduct additional surveys and drilling activities to fully investigate and understand the prospective uranium resources on the Orion property.
On December 4th, 2023, Cosa Resources Corp. (TSXV:COSA) (OTCQB:COSAF) (FSE:SSKU) announced that it had acquired the Aurora uranium project. The project is located only 16 kilometers east of the Key Lake Uranium Mill and former Mine, which produced 209.8 million pounds of U3O8 between 1983 and 2002. Cosa Resources considers the project to be highly underexplored. At roughly 40 kilometers southwest of the recent Gemini Zone uranium discovery, the Aurora project is ideally situated to be part of the next round of Athabasca Basin discoveries.
Click here for more information about Cosa Resources Corp. (TSXV:COSA) (OTCQB:COSAF) (FSE:SSKU)
[1] https://www.bloomberg.com/opinion/articles/2023-11-27/uranium-is-flying-high-on-war-and-climate-change
[2] https://sprott.com/investment-strategies/physical-commodity-funds/uranium/
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