Australian Uranium Blog

If you have read my earlier posts re GGG you’ll know that once GGG comes on line the world’s Rare Earths and in particular the Heavy Rare Earths future supply characteristics will be changed from deficit to surplus. (Market cap $220m)

Today’s announcement by GGG:

“Greenland Minerals and Energy Ltd (“GMEL” or “the Company”) is pleased to announce that the government of Greenland has amended the Company?s exploration license (EL 2010/02) covering the Kvanefjeld multi-element project such that it is now inclusive of uranium.

This license covers the northern Ilimaussaq complex and includes the world-class Kvanefjeld resource, in addition to emerging satellite deposits Zones 2 & Zone 3 (Table 1). Under the licensing framework in Greenland, the licensee maintains the right to apply for an exploitation (mining) license for all exploitable elements listed on the exploration license. Importantly EL 2010/02 now includes radioactive materials, providing the company with the clear right to apply for the exploitation of radioactive elements along with all other exploitable elements. The granting of an exploitation license will be dependent on establishing an environmentally and socially sustainable development scenario that is economically robust.”

indicates that Greenland Energy and Minerals is now substantially de-risked.

Follow this link to my www.australian-shares.com blog to a list of my earlier posts re GGG.

Game on!

About Australian Thorium ASX listed companies with Thorium Resources

It is likely significant that “Government frontbencher Stephen Smith has defended Prime Minister Julia Gillard for not consulting with cabinet before announcing her plans to overturn a ban on uranium sales to India.” (read full article) as Stephen Smith is being actively touted as being Gillard’s replacement if there is to be a change in the Labor party’s leadership.

Those of us that still are invested in the sector should take some comfort from Smith’s comments. However several of the state Labor party leaders have divergent views and with a “green” senate it looks unlikely that we will see new uranium mines inside Australia’s borders in the near future.

Hence our overseas ASX listed uranium plays probably still offer the best chances.

I hold AEE, EXT and GGG. Click on them to see why.

‘‘potentially very dangerous uses … We don’t want to be seen to be part of that effort,’’ she said.

Read more: http://www.theage.com.au/business/uranium-ban-in-qld-will-stay-bligh-20111115-1ng8y.html#ixzz1dmXvtBwC

I worry about who Anna Bligh gets her energy advice from.

This will be very interesting! See my post below.

“Extract Resources Ltd (the Company) has requested a trading halt for trading in securities of the Company on the ASX from pre-open on 10 November 2011, until the earlier of the commencement of trading on 14 November 2011 or when an announcement is released to the market relating to the discussions between CGNPC Uranium Resources Co Ltd and Kalahari Minerals Plc, Extract’s 42.74% shareholder. The Company has requested the trading halt pending the expected release of an announcement by Kalahari on the London Stock Exchange.”

It seems that the market has missed the significance of GGG’s latest ASX release.

lately there has been a lot of commentary surrounding the impending surplus supply of REEs with several thousand projects around the world. The surplus is said to be coming in the light REEs whereas the heavy REEs are going towards critical supply shortage.

****And this is what the market seems to have missed:

CEO Rod McIllree
The resource base at Kvanefjeld is already very large, and initial resource calculations are due out for two new satellite deposits in early 2012. Given the advantage of having a very large resource base, our focus has been on establishing the most efficient and cost-effective way to process the material. We’ve also been conscious of identifying a development scenario with the least market risk.

The breakthrough in beneficiation provides a clear path to a more efficient operation, and also brings about greater flexibility: treating a higher-grade, lower-mass mineral concentrate opens up more leaching options than were previously available.

****We’re aiming for a primary leach stage that effectively leaches uranium and heavy REEs, and we’ve identified a number of solution chemistries to do this.

Under this scenario light REEs remain with the mineral residue, but in an easily leachable form.

****This would see Kvanefjeld developed as a uranium heavy REE project that also produces a very large light REE-rich stockpile. The stockpile can then be processed independently of the uranium-heavy REE leach circuit. Importantly, this removes the market risk of being dependant on producing, and having to sell a vast volume of light REEs, but leaves us the option of cheaply producing large volumes of light REE product according to demand.

This fits with our view that light REEs won’t retain their current high prices over the mid to long term, but heavy REEs will remain high-value materials of great strategic importance for many years to come. We aim to be a dominant supplier of heavy REEs and a large-scale producer of uranium oxide while retaining the option of cheaply producing a light REE product depending on market demand.

Thus it seems that GGG is positioning itself to become the world’s dominant supplier of heavy rare earths and a major uranium supplier.

I hold GGG.

It is easy to see why Extract Resources is about to be taken over……

“EXTRACT Resources has suspended trading in its shares after the price soared on speculation China’s Guangdong Nuclear Power is set to launch a bid for the Perth-based uranium company.

State-backed Guangdong has reopened talks with Kalahari, Extract’s 42.7 per cent shareholder, in a move expected to result in a $2.2 billion offer for Extract.

A £675 million ($1.07bn) takeover deal for Kalahari could be concluded as early as this week, according to a report in London’s Sunday Times.

Shares in Extract surged on open today following the bid speculation, with the stock gaining 10.2 per cent to reach $8.86 before trading was halted.

Extract said the request for the trading halt was to respond to the media speculation and it requested the halt remained in place until Wednesday.

Under Australian takeover laws, if Guangdong acquires Kalahari, it will have to bid for Extract because it will acquire more than 20 per cent of the Australian company.” read the full report

So who will be next?

Does size matter?

Versant Partners recent analysis of companies with large Uranium resources confirms that Australia’s Aura Energy is the world’s second cheapest in terms of EV/Resource. TSX listed Continental Precious Minerals, Inc. (TSX: CZQ) takes first place and is also in Sweden. AEE was found to have an implied upside of over 30 times present value and CZQ has an implied value of 100 times. Australia’s next best was ERA at 6 times current value.

(It should be noted that AEE probably has a similar amount of uranium as CZQ but has yet to fully drill their resource to JORC status.)

The paper also provided some very interesting observations re future usage of uranium but for me the compelling detail is in the tables.

Click image to enlarge: