Sign up Australia
Proactive Investors - Run By Investors For Investors

CanAlaska Uranium poised for market upturn

A recent decision by Kazatomprom to curtail production from its Kazakh mines by 10% can spark a recovery
picture of uranium barrels
Price may be set to turn higher

Uranium was one of the few metals to miss the recent mining rally, but there are signs things are starting to turn.

If so it will be good news for CanAlaska Uranium (CVE:CVV), which has options and royalty deals in place over a swathe of highly prospective acreage in Canada.

According to Cantor Fitzgerald, uranium is likely to reach an inflection point this year as for the first time since the middle of the last decade demand is set to outstrip supply.

It’s an imbalance that is only likely to increase over the coming years.

Although uranium production from both primary and secondary sources is set to increase over the next decade, the rise in demand will outpace this production by some margin.


Kazakh cutbacks offer price recovery hope

Key to this set of forecasts is a recent decision by Kazatomprom to curtail production from its Kazakh mines by 10%.

According to Cantor Fitzgerald, this will amount to a cut of more than 5.2 million pounds of uranium and equates to 3% of global production.

Recent talk in the mining industry has painted Kazakh domination of the uranium supply as something akin to OPEC’s one-time dominance in oil.

In the shadow of the Fukushima disaster any sign of a price rally has been squashed by low cost production from Kazakhstan, which has increased its production of uranium by 360% since 2007.

With the spot price constantly under the cosh, the electricity utilities that are the main source of demand have been under no pressure to buy on long term contracts.

But there may be a shift in mindset in Kazakhstan now that it has 40% of the global market.

If instead of selling at spot it starts to build stocks the effect on the uranium price will be dramatic, says analyst Justin Chan at Numis.


‘Saudi Arabia of Uranium’

CanAlaska Uranium Ltd has a string of work programmes underway in the Athabasca basin of Canada, dubbed the "Saudi Arabia of uranium".

The firm has option deals with CamecoDenison MinesFjordland Exploration and Canterra Minerals  covering diamonds and copper-zinc but, as the company’s name suggests, it is uranium that offers some of the biggest potential.

At the West McArthur uranium site, partner Cameco has completed 3,342 metres of drilling at three areas.

A new drilling programme at one of its three Waterbury claims is scheduled to start this quarter.

Canalaska and Cameco are exploring the West McArthur uranium project under a C$12.5mln agreement, which includes drill testing of the grid 5 and grid 1 conductor packages.

The project covers 35,830 hectares close to Cameco's majority owned McArthur River uranium mine and the recently discovered Fox Lake deposit.

Canalaska retains an unencumbered 2% uranium royalty on future production.


Waterbury West an 'opportunity'

The Waterbury West property is 3,764 hectares in size, and is located over the central portion of Waterbury Lake, immediately north east of the Cigar Lake mine.

Canalaska as former operator identified it as an interesting target

"We are very pleased to have AREVA and Cameco carry out the current drill program, as that completes the purchase option for the property, and gives us a very interesting opportunity for a discovery, on which we would hold a significant royalty," said Canalaska president Peter Dasler.


Moon in the east

In December, Denison Mines also resumed exploration on the Moon South property (Moon). 

Denison will follow up last year's initial hole that encountered 0.102% U3O8 over 0.5 metres.

Like Waterbury West, the property is on the eastern side of the Athabasca Basin which has the highest-grade uranium deposits and the best mining infrastructure.


Exploration elsewhere

At the Alberta diamond project, CanAlaska is evaluating a series of 50 magnetic anomalies detected from a recent 4,000km airborne survey.

At the West Athabasca diamond project, 85 targets have been identified from low level high resolution airborne geophysical surveys.

At the North Ruttan copper zinc project, the firm is in receipt of a Manitoba Government grant (MEAP) for a winter program of drill testing of the target as well as the work permit to complete the drilling.

View full CVV profile View Profile

CanAlaska Uranium Ltd Timeline

Related Articles

Picture of Emmerson's managing director and mining team
January 28 2018
Deposits in the Macquarie Volcanic Arc are often part of much larger systems.
worker on a hill
April 18 2018
The turnaround plan at the Drakelands mine is beginning to take effect
mining truck
September 04 2017
"I am delighted to report the intersection of substantial thicknesses of rock identified as perlite and pozzolan,” said Patrick Cheetham, Sunrise executive chairman.

No investment advice

The information on this Site is of a general nature only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions. You acknowledge and understand that neither the Company, its related bodies corporate, the information providers or their affiliates will advise you personally about the nature, potential value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You should read our FSG and any other relevant disclosure documents and if necessary seek persona advice prior to making any investment decision.

You understand and agree that no Content (as defined below) published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person.

You understand that in certain circumstances the Company, its related bodies corporate, the information providers or their affiliates may have received, or be entitled to receive, financial or other consideration in connection with promoting, and providing information about, certain entities on the Site and in communications otherwise provided to you.

You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Before you act on any general advice we provide, please consider whether it is appropriate for your personal circumstances.

© Proactive Investors 2018

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use