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UComps: Resources Size and Grade – Uranium Development Companies

EXCLUSIVE TO SIGHTLINE U3O8 – Within the universe of uranium developers, it is a broad spectrum when it comes to size.  One important distinction for investors is the differentiation between resource categories.  These categories indicate the level of confidence and understanding as to the true size, measure, geology and economic viability.

First, let’s look at economic viability.  While a “Resource” is any measured deposit that is potentially viable for mining (under consistently accepted standards), a “Reserve” has had adequate work performed to demonstrate that it is legally, economically and technically feasible to mine.  Only once it is in the reserve category can it be referred to as “ore”.

Within these two categories, it breaks down further. A Reserve is categorized as “Proven” or “Probable” denoting high and reasonable confidence levels respectively. Similarly, Resources can be categorized as “Measured” or “Indicated” again indicating high and reasonable confidence levels respectively.

A Resource can include one additional category – “Inferred”.  An Inferred Resource has been calculated with the least amount of evidence and confidence and has not been verified as to geological or grade continuity.

Therefore, while investors can get significant comfort in stated Proven and Probable, or Measured and Indicated numbers, Inferred resources must be taken with a grain of salt and viewed only as an indication of what is potentially available.

In the table below, we have listed the flagship project for each development company, detailing their resources and grades.  Resources have be split between M&I and Inferred.  For the four companies that are shaded (Bannerman, Forsys, Berkley and Vimy) the amounts listed as M&I contains, in fact, Proven and Probable.

The standout in the crowd is clearly NexGen ranking as the largest and highest-grade deposit at 6.88% U3O8, compared to the group average of 0.66%. If we were to remove NexGen, the group average would be M&I Resources of 54.4 million pounds at 0.22% U3O8 and Inferred Resources of 39.4 million pounds at 0.17%.

Some companies will provide grades as a percentage or as parts per million (ppm), therefore to keep this report consistent, we have converted ppm into %U3O8for the following companies: BMN.AX, FSY.TO, BKY.AX, PLU.V, VMY.AX, ACB.AX and AEE.AX.

Once again we want to be clear that for the small community of mining companies currently producing uranium around the world, there are many resources available to investors to analyze, evaluate and compare opportunities. For the smaller uranium development and exploration companies, however, similar evaluations require extensive research. For that reason, we have chosen to focus solely on those companies.

We are defining Development Companies as any public company (without a producing uranium asset) that has announced plans to prepare an economic evaluation of a known uranium deposit.

Some companies are transitioning to other metals, have divesting their key assets, or calculated uranium as a by-product, For simplicity sake, we have kept the following companies out of these comparables:

  • Westwater Resources: as they transition to Battery Metals selling their key uranium project to Laramide; and
  • Greenland Minerals and Energy Limited: here, Uranium is a byproduct and their resources measurements contain other elements which will confuse our comparison

Investors should not ignore and should be able to find significant detailed analysis and discussion on the larger producing companies that include: Cameco Corp, Denison Mines Corp., Energy Fuels Inc, Energy Resources of Australia, Uranium Energy Corp, UR-Energy Inc, Paladin Energy Ltd, Peninsula Energy Ltd, Uranium One, Rio Tinto plc and BHP Billiton Limited.