Sliding commodity prices have sparked a consolidation movement in the resource sector, and uranium has been no exception. And while U3O8 prices are hovering near 10-year lows, there has been signs of life in this space including recent news that Japan plans to re-start one of its nuclear reactor in August. All of which makes the following juniors tempting takeover targets.
NexGen Energy Ltd. (TSXV: NXE)
: NexGen shares have been off to a stellar start so far in 2015, soaring 97% to its recent price of $0.76. Drill results from the Arrow Zone on its Rook 1 Property in the Athabasca Basin have piqued speculators’ interests, which includes 56.5 metres of 11.55% U3O8 that the company reported recently. Drilling there, so far, has hit mineralization in 44 of 46 holes. Dundee Capital Markets, in a research report, noted that the property could host up to 14 million pounds of uranium. NexGen closed a bought-deal financing on May 26, 2015, and has about $30 million in cash at this time.
Forum Uranium Corp. (TSXV: FDC)
: This explorer/developer is tiny in terms of market capitalization (about $2 million) but has a geological team with a history of Athabasca basin discoveries totaling more than 300 million pounds uranium oxide. The company’s 100% owned Clearwater project, up to 70% of which was optioned out to Uracan Resources, is located next to Fission Uranium’s Patterson Lake South discovery and Forum has four other drill-ready projects in the Athabasca basin. Forum’s share structure is appealing at just 35.7 million shares outstanding.
Ur-Energy Inc. (TSX: URE)
: The company began production at its flagship, wholly-owned Lost Creek in-situ leach mine in Wyoming in 2013. Lost Creek’s life-of-mine project costs, including initial capital and reclamation, have been estimated at just $29/lb. Ur-Energy generated US$26.5 million sales revenue in 2014 and has fixed-price contracts through 2019 that are priced well above current market levels. The company expects to produce between 750,000 and 850,000 pounds of U3O8 in 2015, 630,000 pounds of which has already been sold forward at an average price of $50.10 per pound. Energy Fuels would be the likely suitor for Ur-Energy as it has already acquired another in-situ miner in Uranerz that also has operations in Wyoming.
Laramide Resources Ltd. (TSX: LAM)
: With a market cap of about $25 million, Laramide likely hasn’t received a lot of attention although it probably should. The company is advancing its flagship Westmoreland uranium project in Queensland, Australia, which is ranked as one of the 10 largest uranium deposits in that country. It has a total resource of 51.9 million pounds of uranium, 35 million of which is in the Indicated category. About 80% of its resource is within 50 metres of the surface and the company expects this project to produce 3 million pounds per year. Given Australia’s proximity to China, Westmoreland could be a key uranium supplier to the world’s second-largest economy. Laramide also has its La Sal project in Utah, which is advancing towards near-term production, and the company has a potential near-term cash flow stream from a royalty agreement with Uranium Resources. As well, Laramide Resources holds shares in Khan Resources, which is expected to receive $100 million from the Mongolian government.
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