A-CAP Resources' (ASX: ACB, (BSE: A-CAP) shares have jumped 60% already in 2014 with the stock last trading at $0.075, as the company has benefited from a global re-rating in uranium stocks.
Daily volume continues to rise to average 230,000 over the past six weeks, compared to 60,000 in January.
Uranium stocks are starting to turn the corner with countries increasingly committing to either new nuclear power facilities or restarting existing facilities and the over supply of uranium looks to be on the wane in 2015/16.
A-Cap has discovered one of the world’s largest undeveloped Uranium Deposits in North Eastern Botswana since commencing exploration in late 2006.
The Letlhakane Uranium Project is adjacent to Botswana’s main North-South infrastructure corridor that includes a sealed all weather highway, railway line and the national power grid.
This key infrastructure has the potential to make significant contributions to keeping the capital cost of future developments low.
The current JORC resource stands at 662 million tonnes at 211ppm U₃O₈ for a contained 308 Mlbs of U₃O₈ (100ppm cut-off), and was completed by Optiro Pty Ltd.
Importantly, within the Letlhakane Resource, a significant higher-grade component at a 300ppm U₃O₈ cut-off, contains 83.7Mt at 447ppm U₃O₈ for 82.5 Mlbs of U₃O₈.
This upgrade highlights A-Cap’s Letlhakane Uranium Deposit as one of the top ten largest undeveloped uranium deposits in the world.
A-Cap has announced encouraging results from a detailed Scoping Study that highlighted the positive economics of the deposit.
Following completion of an infill drilling program planned to commence early in 2014, this Scoping Study will be revised to include the higher grade resource which is expected to impact significantly on operating costs for the project.
In addition to this, during the June quarter, the company released a JORC Inferred resource of 107Mt for the numerous coal seams that are associated with the uranium deposit at Letlhakane.
Infill drilling is being planned to establish mining scale continuity and also further define the areas that have been identified as higher grade, and early in a potential mining plan.
The drill planning is focussing on the geological and grade parameters in relation to optimising the economics to ensure that the drill metres give the best benefit to the
Drilling will initially target the shallow primary resources at Serule West and Kraken.
China and Japan
China has reportedly approved at least six nuclear power facilities with construction possibly starting on at least some of them this year as the country seeks to increase its use of nuclear energy.
Its installed nuclear capacity of 14.61 million kilowatts equates to about 1.17% of its total installed power.
Of more immediate interest and leverage for the uranium outlook is Japan’s push to restart 10 of its nuclear reactors by summer.
The Japanese government is scheduled to release its new basic energy plan before the end of March, with a document expected to identify nuclear energy as a key component of the national energy mix.
A-Cap is a dual-commodity play, and also in Botswana has discovered two new Coal Projects – the Mea and Bolau discoveries.
The Mea Discovery was made on PL134/2005 and is considered a “greenfields” thermal coal discovery that contains multiple coal seams within a thicker carbonaceous unit that extends
to over 100 metre true thickness.
A JORC inferred resource of 335 million tonnes of coal in multiple seams has been defined.
The Bolau Discovery constitutes the up and down dip extension of African Energy Resources' (ASX: AFR) Sese Coal Project that extends into A-Cap’s prospecting licences PL138/2005 and PL125/2009.
Thick coal intersections occur in two horizons up to 25 metres thick and are often coincident with significant uranium intersections up to 10 metre thick.
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