‘Huge Upside Potential’ on Firm That Turns Plastic Waste into Synthetic Fuels

Source: Streetwise Reports   12/05/2019

The rationale for investing in this company is provided in a Pareto Securities report.

In a Dec. 2 research note, analyst Tom Erik Kristiansen reported that Pareto Securities initiated coverage on Quantafuel SA (QFUEL:NO) with a Buy rating and a NOK250 per share target price that “upon proof of commerciality could more than double over the next year.” Further, Quantafuel is “likely to add additional projects to its portfolio that leads to an even larger long-term upside potential.” The current share price is NOK165.

Kristiansen highlighted that Quantafuel is “well positioned to benefit from its potential first mover advantage in a large, underserved chemical recycling market.” Also, it has a scalable business model and a well-defined plan to facilitate growth near term.

The company produces high-quality synthetic fuels and chemical products, such as low-carbon diesel, naphtha and heating oil, from nonrecyclable plastic waste through a proprietary chemical process. This affords the business an attractive environmental social governance profile.

The next major catalyst for Quantafuel, scheduled to occur shortly, by year-end 2019, is the launch of commercial production at its plant in Skive, Denmark, Kristiansen relayed. “If successful, Quantafuel will have the first, large-scale commercial plant for chemical recycling of plastic waste in the world,” he added.

It also will then, with its partners, look to expand in the short term, building two more facilities, each with a capacity of 300 million tons per day, likely in Antwerp and Bayern. Quantafuel already has plans to triple the capacity of the Skive plant to 180 million tons per day.

The renewable energy company has partly derisked production ramp-up by engaging strong partners, in Vitol, a large oil trader, and BASF, a chemical producer, Kristiansen indicated. Together, both companies invested US$25 million in Quantafuel. Having these partners also validates the potential of the company’s technology.

Kristiansen noted that at current prices, Quantafuel’s products are estimated to generate, through its processes at new large-scale plants, an unleveraged internal rate of return of 30%-plus.

Many view Quantafuel’s technology as “the future solution as it will enable larger volumes to be turned into high quality products,” the analyst pointed out, referring to the problem of unrecyclable plastics, production of which is projected to double by 2050. Additionally, recycling capacity in Europe will have to double by 2025 to meet current mandates. The need for a remedy is compounded by China’s ban on plastic imports in 2018, which “implies that about 19 million containers of plastic waste will need to find a new home over the next decade.”

With three plants operating, Quantafuel could process about “3% of the additional need caused by the China ban alone, highlighting the industry and Quantafuel’s high growth potential,” wrote Kristiansen.

To maximize the potential benefit from first mover advantage, Quantafuel is taking steps to standardize its production concept. “This may also make it an attractive acquisition candidate as some of world’s largest petrochemical companies, refiners and oil majors today are targeting this market,” Kristiansen added.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures from Pareto Securities AS, Quantafuel, December 2, 2019

This publication or report has been prepared solely by Pareto Securities Research.

Opinions or suggestions from Pareto Securities Research may deviate from recommendations or opinions presented by other departments or companies in the Pareto Securities Group. The reason may typically be the result of differing time horizons, methodologies, contexts or other factors.

Analysts Certification
The research analyst(s) whose name(s) appear on research reports prepared by Pareto Securities Research certify that: (i) all of the views expressed in the research report accurately reflect their personal views about the subject security or issuer, and (ii) no part of the research analysts’ compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analysts in research reports that are prepared by Pareto Securities Research.

The research analysts whose names appears on research reports prepared by Pareto Securities Research received compensation that is based upon various factors including Pareto Securities’ total revenues, a portion of which are generated by Pareto Securities’ investment banking activities.

Conflicts of interest

Companies in the Pareto Securities Group, affiliates or staff of companies in the Pareto Securities Group, may perform services for, solicit business from, make a market in, hold long or short positions in, or otherwise be interested in the investments (including derivatives) of any company mentioned in the publication or report.

In addition Pareto Securities Group, or affiliates, may from time to time have a broking, advisory or other relationship with a company which is the subject of or referred to in the relevant Research, including acting as that company’s official or sponsoring broker and providing corporate finance or other financial services. It is the policy of Pareto to seek to act as corporate adviser or broker to some of the companies which are covered by Pareto Securities Research. Accordingly companies covered in any Research may be the subject of marketing initiatives by the Corporate Finance Department.

To limit possible conflicts of interest and counter the abuse of inside knowledge, the analysts of Pareto Securities Research are subject to internal rules on sound ethical conduct, the management of inside information, handling of unpublished research material, contact with other units of the Group Companies and personal account dealing. The internal rules have been prepared in accordance with applicable legislation and relevant industry standards. The object of the internal rules is for example to ensure that no analyst will abuse or cause others to abuse confidential information. It is the policy of Pareto Securities Research that no link exists between revenues from capital markets activities and individual analyst remuneration. The Group Companies are members of national stockbrokers’ associations in each of the countries in which the Group Companies have their head offices. Internal rules have been developed in accordance with recommendations issued by the stockbrokers associations.

This material has been prepared following the Pareto Securities Conflict of Interest Policy. The guidelines in the policy include rules and measures aimed at achieving a sufficient degree of independence between various departments, business areas and sub-business areas within the Pareto Securities Group in order to, as far as possible, avoid conflicts of interest from arising between such departments, business areas and sub-business areas as well as their customers. One purpose of such measures is to restrict the flow of information between certain business areas and sub-business areas within the Pareto Securities Group, where conflicts of interest may arise and to safeguard the impartialness of the employees. For example, the Corporate Finance departments and certain other departments included in the Pareto Securities Group are surrounded by arrangements, so-called Chinese Walls, to restrict the flows of sensitive information from such departments. The internal guidelines also include, without limitation, rules aimed at securing the impartialness of, e.g., analysts working in the Pareto Securities Research departments, restrictions with regard to the remuneration paid to such analysts, requirements with respect to the independence of analysts from other departments within the Pareto Securities Group rules concerning contacts with covered companies and rules concerning personal account trading carried out by analysts.

( Companies Mentioned: QFUEL:NO,
)

Source: Streetwise Reports   12/05/2019

The rationale for investing in this company is provided in a Pareto Securities report.

In a Dec. 2 research note, analyst Tom Erik Kristiansen reported that Pareto Securities initiated coverage on Quantafuel SA (QFUEL:NO) with a Buy rating and a NOK250 per share target price that "upon proof of commerciality could more than double over the next year." Further, Quantafuel is "likely to add additional projects to its portfolio that leads to an even larger long-term upside potential." The current share price is NOK165.

Kristiansen highlighted that Quantafuel is "well positioned to benefit from its potential first mover advantage in a large, underserved chemical recycling market." Also, it has a scalable business model and a well-defined plan to facilitate growth near term.

The company produces high-quality synthetic fuels and chemical products, such as low-carbon diesel, naphtha and heating oil, from nonrecyclable plastic waste through a proprietary chemical process. This affords the business an attractive environmental social governance profile.

The next major catalyst for Quantafuel, scheduled to occur shortly, by year-end 2019, is the launch of commercial production at its plant in Skive, Denmark, Kristiansen relayed. "If successful, Quantafuel will have the first, large-scale commercial plant for chemical recycling of plastic waste in the world," he added.

It also will then, with its partners, look to expand in the short term, building two more facilities, each with a capacity of 300 million tons per day, likely in Antwerp and Bayern. Quantafuel already has plans to triple the capacity of the Skive plant to 180 million tons per day.

The renewable energy company has partly derisked production ramp-up by engaging strong partners, in Vitol, a large oil trader, and BASF, a chemical producer, Kristiansen indicated. Together, both companies invested US$25 million in Quantafuel. Having these partners also validates the potential of the company's technology.

Kristiansen noted that at current prices, Quantafuel's products are estimated to generate, through its processes at new large-scale plants, an unleveraged internal rate of return of 30%-plus.

Many view Quantafuel's technology as "the future solution as it will enable larger volumes to be turned into high quality products," the analyst pointed out, referring to the problem of unrecyclable plastics, production of which is projected to double by 2050. Additionally, recycling capacity in Europe will have to double by 2025 to meet current mandates. The need for a remedy is compounded by China's ban on plastic imports in 2018, which "implies that about 19 million containers of plastic waste will need to find a new home over the next decade."

With three plants operating, Quantafuel could process about "3% of the additional need caused by the China ban alone, highlighting the industry and Quantafuel's high growth potential," wrote Kristiansen.

To maximize the potential benefit from first mover advantage, Quantafuel is taking steps to standardize its production concept. "This may also make it an attractive acquisition candidate as some of world's largest petrochemical companies, refiners and oil majors today are targeting this market," Kristiansen added.

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures from Pareto Securities AS, Quantafuel, December 2, 2019

This publication or report has been prepared solely by Pareto Securities Research.

Opinions or suggestions from Pareto Securities Research may deviate from recommendations or opinions presented by other departments or companies in the Pareto Securities Group. The reason may typically be the result of differing time horizons, methodologies, contexts or other factors.

Analysts Certification
The research analyst(s) whose name(s) appear on research reports prepared by Pareto Securities Research certify that: (i) all of the views expressed in the research report accurately reflect their personal views about the subject security or issuer, and (ii) no part of the research analysts’ compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analysts in research reports that are prepared by Pareto Securities Research.

The research analysts whose names appears on research reports prepared by Pareto Securities Research received compensation that is based upon various factors including Pareto Securities’ total revenues, a portion of which are generated by Pareto Securities’ investment banking activities.

Conflicts of interest

Companies in the Pareto Securities Group, affiliates or staff of companies in the Pareto Securities Group, may perform services for, solicit business from, make a market in, hold long or short positions in, or otherwise be interested in the investments (including derivatives) of any company mentioned in the publication or report.

In addition Pareto Securities Group, or affiliates, may from time to time have a broking, advisory or other relationship with a company which is the subject of or referred to in the relevant Research, including acting as that company’s official or sponsoring broker and providing corporate finance or other financial services. It is the policy of Pareto to seek to act as corporate adviser or broker to some of the companies which are covered by Pareto Securities Research. Accordingly companies covered in any Research may be the subject of marketing initiatives by the Corporate Finance Department.

To limit possible conflicts of interest and counter the abuse of inside knowledge, the analysts of Pareto Securities Research are subject to internal rules on sound ethical conduct, the management of inside information, handling of unpublished research material, contact with other units of the Group Companies and personal account dealing. The internal rules have been prepared in accordance with applicable legislation and relevant industry standards. The object of the internal rules is for example to ensure that no analyst will abuse or cause others to abuse confidential information. It is the policy of Pareto Securities Research that no link exists between revenues from capital markets activities and individual analyst remuneration. The Group Companies are members of national stockbrokers’ associations in each of the countries in which the Group Companies have their head offices. Internal rules have been developed in accordance with recommendations issued by the stockbrokers associations.

This material has been prepared following the Pareto Securities Conflict of Interest Policy. The guidelines in the policy include rules and measures aimed at achieving a sufficient degree of independence between various departments, business areas and sub-business areas within the Pareto Securities Group in order to, as far as possible, avoid conflicts of interest from arising between such departments, business areas and sub-business areas as well as their customers. One purpose of such measures is to restrict the flow of information between certain business areas and sub-business areas within the Pareto Securities Group, where conflicts of interest may arise and to safeguard the impartialness of the employees. For example, the Corporate Finance departments and certain other departments included in the Pareto Securities Group are surrounded by arrangements, so-called Chinese Walls, to restrict the flows of sensitive information from such departments. The internal guidelines also include, without limitation, rules aimed at securing the impartialness of, e.g., analysts working in the Pareto Securities Research departments, restrictions with regard to the remuneration paid to such analysts, requirements with respect to the independence of analysts from other departments within the Pareto Securities Group rules concerning contacts with covered companies and rules concerning personal account trading carried out by analysts.

( Companies Mentioned: QFUEL:NO, )

Vanadium Company Uncovers New Gold Target in Nevada Project

Source: Peter Epstein for Streetwise Reports   12/03/2019

First Vanadium CEO Paul Cowley speaks with Peter Epstein of Epstein Research about the state of the vanadium market and his company’s plans to explore the newly found gold target on the Carlin Trend in Nevada.

First Vanadium Corp. (FVAN:TSX.V; FVANF:OTCQB) is one of the very few survivors of a brutal sell-off in Canadian and Australian-listed vanadium juniors. Nearly a dozen of the 100+ names I’m tracking are down more than 80% from their respective 52-week highs. Even industry-leading vanadium producer Largo Resources is not immune; it’s down 74%.

Since the Chinese vanadium pentoxide (V2O5) price hit an inflation-adjusted 13-year high of US$33.9/lb about 12 months ago, prices have plunged 82%. Few experts expected the price to remain above US$30/lb, or US$25 or US$20 for that matter. But, the current price of $6.2/lb is half or less of what most vanadium juniors were hoping to base their preliminary (PEA, PFS) economic studies off of.

Most new projects on the drawing board simply don’t work at today’s prices. However, First Vanadium’s large, high-grade, near-surface, primary vanadium project in Nevada could potentially be viable at a price below US$10/lb. [NI 43-101 resource: 303 million pounds Indicated @ 0.615% V2O5] / [75 million pounds Inferred @ 0.52% V2O5] [Corporate Presentation]

Readers may recall that First Vanadium’s property is in the Carlin Gold Trend. CEO Paul Cowley knew he had one or more gold targets at depth, but two years ago, he had a straightforward, low-cost shot at delineating an attractive vanadium resource, so that’s the path the team took.

Paul tells me he underestimated the strength of the gold prospect, only coming to understand the bigger picture with a decisive stamp of approval from legendary geologist Dave Mathewson. Mathewson has joined First Vanadium’s stellar Technical Advisory Board.

With a fully funded PEA to be delivered in Q1 2020, management has more time to prudently pursue the gold opportunity. With that in mind, the team is looking for a strategic / financial partner to move the gold target forward.

Although the following interview of CEO Cowley is focused more on the newly announced gold prospect, he and his talented team remain excited by their vanadium resource and newly identified gold target, both on the same property. Please continue reading to learn more.

Peter Epstein: Please update readers on the status of First Vanadium’s flagship Carlin primary vanadium project in north-central Nevada (USA).

Paul Cowley: We have had a busy 2019 with the Carlin Vanadium resource since it was announced in February. It has been, and will continue to be, our primary focus. We added to our land position, extended mineralization and achieved crucial metallurgical advancements, enabling us to move forward to the next stage.

Our large, high-grade, primary vanadium resource is being advanced via a Preliminary Economic Assessment (PEA), conducted by Wood Canada Ltd., a highly reputable international engineering firm. Completion of the PEA is expected in the next three or four months.

Peter Epstein: Vanadium pentoxide prices have fallen further than most believed they would. The expectation heading into 2020 was around US$10-$12 per pound, but the price is now at US$6.2/lb. Any comments on the price?

Paul Cowley: The further leg down to this price happened only recently, I think we are at or near a bottom. The average Chinese price of V2O5 in 2019 is much higher, closer to US$11/lb. Over the past six months it has averaged about US$8/lb.

We anticipate prices will strengthen with stronger demand in rebar for construction and infrastructure in China and globally. Increased adoption of Vanadium Redox Flow Batteries in massive solar/wind projects, and in power grids will also be key drivers.

Near-term growth will be driven by steel production in developing countries, and especially developments in China with its higher strength standards in rebar for safer, stronger, longer-lasting structures.

Peter Epstein: First Vanadium recently announced a new gold target, on the company’s existing property, identified by rock star geologist and mine finder Dave Mathewson. Please tell us about this latest development.

Paul Cowley: Yes, we are excited about how this is unfolding. We engaged Mr. Mathewson as a geological consultant because of his huge success in finding gold deposits in the Carlin Trend for Newmont Goldcorp (formerly a Newmont Mining regional exploration manager) and Gold Standard Ventures (co-founder and VP Exploration). We just recently appointed him to our Technical Advisory Board.

As a reminder to your readers, our vanadium property lies in the world famous and highly prolific Carlin Gold Trend, which has produced over 90 million ounces of gold. This trend is without question one of the best places on the planet to find gold. Dave has interpreted a Carlin-style, high-grade gold target at depth on our property.

Mathewson has tremendous local and Nevada statewide deposit knowledge and a big picture prospective in the Carlin Gold Trend. He’s a Nevada-based exploration geologist with 50 years’ experience, including 35 years conducting and managing gold exploration in Nevada. He and his exploration teams have discovered more than five million ounces of gold within eight miles of our property.

From our property data and Dave’s extensive knowledge of the deposits in the vicinity, he identified, in his words, “a very real and significant gold target” supported by all the things he looks for in discovering these types of deposits —the right set of structures, geology, alteration, mineralization, host rocks and geophysical signature.

The target covers an area of ½ mile by 2 miles. Our news release of November 12th describes the target well and has a good link to a map to visualize the target relative to surrounding gold deposits. As mentioned earlier, Dave was so intrigued with this target’s potential, he joined our Technical Advisory Board.

Peter Epstein: Nevada is world famous for its gold endowment. However, it typically requires a lot of time, money and drilling to delineate a meaningful resource. As a junior, how might First Vanadium move both its vanadium and gold projects forward?

Paul Cowley: Our focus remains on the vanadium resource, but we think this gold target is very compelling. Make no mistake, we need to be smart in how to advance it. With that in mind, we’re looking for a strong strategic partner.

An obvious strategy would be to approach the Barrick Newmont JV (Nevada Gold Mines) whose claims border ours and are on trend, or a junior explorer, with a good balance sheet, who might appreciate an opportunity to gain exposure in the Carlin Gold Trend

Peter Epstein: Do you or your team have much experience in gold exploration?

Paul Cowley: In addition to Dave Mathewson, I have 40 years’ experience as an exploration geologist, principally in gold. As project manager on the Slave Gold Project for BHP, I led the team that discovered and advanced four gold deposits that amounted to over 6 million ounces of gold.

Peter Epstein: Since your gold and vanadium prospects are on the same property, could you potentially explore/develop BOTH concurrently?

Paul Cowley: There could be some synergies in both the exploration and development stages, such as in infrastructure. The two projects need not conflict with each other. The vanadium resource is envisioned to be open pit, while the gold target being at depth would be an underground scenario.

Peter Epstein: If the gold target is so exciting, why are you only now getting around to talking about it?

Paul Cowley: Good question. Look, one must be smart with your money, set priorities and decide where the money might have the biggest impact. The vanadium deposit was fairly advanced when we started. So, very inexpensively and quickly, we delivered a resource with an in-situ (in the ground) value in the billions of dollars.

Now that the vanadium resource is on a track for a PEA early next year, we have time to ponder the significance of the gold-bearing outcrops on our property as clues to something bigger. At the same time, we fortuitously connected with Mr. Mathewson, who was able to take the gold target a big step further. Now we’re looking for a partner to share the exploration risk.

Peter Epstein: Thank you, Paul, for this timely update and a more detailed look at your gold target, conveniently situated at depth on your existing property. I look forward to First Vanadium’s PEA on the Carlin vanadium project in just a few months.

Peter Epstein is the founder of Epstein Research. His background is in company and financial analysis. He holds an MBA degree in financial analysis from New York University’s Stern School of Business.

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Disclosures: The content of this interview is for information only. Readers fully understand and agree that nothing contained herein, written by Peter Epstein of Epstein Research [ER], (together, [ER]) about First Vanadium Corp., including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is not to be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy or sell any security. [ER] is not responsible under any circumstances for investment actions taken by the reader. [ER] has never been, and is not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and does not perform market making activities. [ER] is not directly employed by any company, group, organization, party or person. The shares of First Vanadium Corp. are highly speculative, not suitable for all investors. Readers understand and agree that investments in small cap stocks can result in a 100% loss of invested funds. It is assumed and agreed upon by readers that they will consult with their own licensed or registered financial advisors before making any investment decisions.

At the time this article was posted, Peter Epstein owned no shares of First Vanadium Corp. and the Company was an advertiser on [ER].

Readers understand and agree that they must conduct their own due diligence above and beyond reading this interview. While the author believes he’s diligent in screening out companies that, for any reasons whatsoever, are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful. [ER] is not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, reported facts & financial calculations, or for the completeness of this article or future content. [ER] is not expected or required to subsequently follow or cover events & news, or write about any particular company, sector or topic. [ER] is not an expert in any company, industry sector or investment topic.

Streetwise Reports Disclosure:
1) Peter Epstein’s disclosures are listed above.
2) The following companies mentioned in the article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.

4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

( Companies Mentioned: FVAN:TSX.V; FVANF:OTCQB,
)

Source: Peter Epstein for Streetwise Reports   12/03/2019

First Vanadium CEO Paul Cowley speaks with Peter Epstein of Epstein Research about the state of the vanadium market and his company's plans to explore the newly found gold target on the Carlin Trend in Nevada.

First Vanadium Corp. (FVAN:TSX.V; FVANF:OTCQB) is one of the very few survivors of a brutal sell-off in Canadian and Australian-listed vanadium juniors. Nearly a dozen of the 100+ names I'm tracking are down more than 80% from their respective 52-week highs. Even industry-leading vanadium producer Largo Resources is not immune; it's down 74%.

Since the Chinese vanadium pentoxide (V2O5) price hit an inflation-adjusted 13-year high of US$33.9/lb about 12 months ago, prices have plunged 82%. Few experts expected the price to remain above US$30/lb, or US$25 or US$20 for that matter. But, the current price of $6.2/lb is half or less of what most vanadium juniors were hoping to base their preliminary (PEA, PFS) economic studies off of.

Most new projects on the drawing board simply don't work at today's prices. However, First Vanadium's large, high-grade, near-surface, primary vanadium project in Nevada could potentially be viable at a price below US$10/lb. [NI 43-101 resource: 303 million pounds Indicated @ 0.615% V2O5] / [75 million pounds Inferred @ 0.52% V2O5] [Corporate Presentation]

Readers may recall that First Vanadium's property is in the Carlin Gold Trend. CEO Paul Cowley knew he had one or more gold targets at depth, but two years ago, he had a straightforward, low-cost shot at delineating an attractive vanadium resource, so that's the path the team took.

Paul tells me he underestimated the strength of the gold prospect, only coming to understand the bigger picture with a decisive stamp of approval from legendary geologist Dave Mathewson. Mathewson has joined First Vanadium's stellar Technical Advisory Board.

With a fully funded PEA to be delivered in Q1 2020, management has more time to prudently pursue the gold opportunity. With that in mind, the team is looking for a strategic / financial partner to move the gold target forward.

Although the following interview of CEO Cowley is focused more on the newly announced gold prospect, he and his talented team remain excited by their vanadium resource and newly identified gold target, both on the same property. Please continue reading to learn more.

Peter Epstein: Please update readers on the status of First Vanadium's flagship Carlin primary vanadium project in north-central Nevada (USA).

Paul Cowley: We have had a busy 2019 with the Carlin Vanadium resource since it was announced in February. It has been, and will continue to be, our primary focus. We added to our land position, extended mineralization and achieved crucial metallurgical advancements, enabling us to move forward to the next stage.

Our large, high-grade, primary vanadium resource is being advanced via a Preliminary Economic Assessment (PEA), conducted by Wood Canada Ltd., a highly reputable international engineering firm. Completion of the PEA is expected in the next three or four months.

Peter Epstein: Vanadium pentoxide prices have fallen further than most believed they would. The expectation heading into 2020 was around US$10-$12 per pound, but the price is now at US$6.2/lb. Any comments on the price?

Paul Cowley: The further leg down to this price happened only recently, I think we are at or near a bottom. The average Chinese price of V2O5 in 2019 is much higher, closer to US$11/lb. Over the past six months it has averaged about US$8/lb.

We anticipate prices will strengthen with stronger demand in rebar for construction and infrastructure in China and globally. Increased adoption of Vanadium Redox Flow Batteries in massive solar/wind projects, and in power grids will also be key drivers.

Near-term growth will be driven by steel production in developing countries, and especially developments in China with its higher strength standards in rebar for safer, stronger, longer-lasting structures.

Peter Epstein: First Vanadium recently announced a new gold target, on the company's existing property, identified by rock star geologist and mine finder Dave Mathewson. Please tell us about this latest development.

Paul Cowley: Yes, we are excited about how this is unfolding. We engaged Mr. Mathewson as a geological consultant because of his huge success in finding gold deposits in the Carlin Trend for Newmont Goldcorp (formerly a Newmont Mining regional exploration manager) and Gold Standard Ventures (co-founder and VP Exploration). We just recently appointed him to our Technical Advisory Board.

As a reminder to your readers, our vanadium property lies in the world famous and highly prolific Carlin Gold Trend, which has produced over 90 million ounces of gold. This trend is without question one of the best places on the planet to find gold. Dave has interpreted a Carlin-style, high-grade gold target at depth on our property.

Mathewson has tremendous local and Nevada statewide deposit knowledge and a big picture prospective in the Carlin Gold Trend. He's a Nevada-based exploration geologist with 50 years' experience, including 35 years conducting and managing gold exploration in Nevada. He and his exploration teams have discovered more than five million ounces of gold within eight miles of our property.

From our property data and Dave's extensive knowledge of the deposits in the vicinity, he identified, in his words, "a very real and significant gold target" supported by all the things he looks for in discovering these types of deposits —the right set of structures, geology, alteration, mineralization, host rocks and geophysical signature.

The target covers an area of ½ mile by 2 miles. Our news release of November 12th describes the target well and has a good link to a map to visualize the target relative to surrounding gold deposits. As mentioned earlier, Dave was so intrigued with this target's potential, he joined our Technical Advisory Board.

Peter Epstein: Nevada is world famous for its gold endowment. However, it typically requires a lot of time, money and drilling to delineate a meaningful resource. As a junior, how might First Vanadium move both its vanadium and gold projects forward?

Paul Cowley: Our focus remains on the vanadium resource, but we think this gold target is very compelling. Make no mistake, we need to be smart in how to advance it. With that in mind, we're looking for a strong strategic partner.

An obvious strategy would be to approach the Barrick Newmont JV (Nevada Gold Mines) whose claims border ours and are on trend, or a junior explorer, with a good balance sheet, who might appreciate an opportunity to gain exposure in the Carlin Gold Trend

Peter Epstein: Do you or your team have much experience in gold exploration?

Paul Cowley: In addition to Dave Mathewson, I have 40 years' experience as an exploration geologist, principally in gold. As project manager on the Slave Gold Project for BHP, I led the team that discovered and advanced four gold deposits that amounted to over 6 million ounces of gold.

Peter Epstein: Since your gold and vanadium prospects are on the same property, could you potentially explore/develop BOTH concurrently?

Paul Cowley: There could be some synergies in both the exploration and development stages, such as in infrastructure. The two projects need not conflict with each other. The vanadium resource is envisioned to be open pit, while the gold target being at depth would be an underground scenario.

Peter Epstein: If the gold target is so exciting, why are you only now getting around to talking about it?

Paul Cowley: Good question. Look, one must be smart with your money, set priorities and decide where the money might have the biggest impact. The vanadium deposit was fairly advanced when we started. So, very inexpensively and quickly, we delivered a resource with an in-situ (in the ground) value in the billions of dollars.

Now that the vanadium resource is on a track for a PEA early next year, we have time to ponder the significance of the gold-bearing outcrops on our property as clues to something bigger. At the same time, we fortuitously connected with Mr. Mathewson, who was able to take the gold target a big step further. Now we're looking for a partner to share the exploration risk.

Peter Epstein: Thank you, Paul, for this timely update and a more detailed look at your gold target, conveniently situated at depth on your existing property. I look forward to First Vanadium's PEA on the Carlin vanadium project in just a few months.

Peter Epstein is the founder of Epstein Research. His background is in company and financial analysis. He holds an MBA degree in financial analysis from New York University's Stern School of Business.

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Disclosures: The content of this interview is for information only. Readers fully understand and agree that nothing contained herein, written by Peter Epstein of Epstein Research [ER], (together, [ER]) about First Vanadium Corp., including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is not to be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy or sell any security. [ER] is not responsible under any circumstances for investment actions taken by the reader. [ER] has never been, and is not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and does not perform market making activities. [ER] is not directly employed by any company, group, organization, party or person. The shares of First Vanadium Corp. are highly speculative, not suitable for all investors. Readers understand and agree that investments in small cap stocks can result in a 100% loss of invested funds. It is assumed and agreed upon by readers that they will consult with their own licensed or registered financial advisors before making any investment decisions.

At the time this article was posted, Peter Epstein owned no shares of First Vanadium Corp. and the Company was an advertiser on [ER].

Readers understand and agree that they must conduct their own due diligence above and beyond reading this interview. While the author believes he's diligent in screening out companies that, for any reasons whatsoever, are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful. [ER] is not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, reported facts & financial calculations, or for the completeness of this article or future content. [ER] is not expected or required to subsequently follow or cover events & news, or write about any particular company, sector or topic. [ER] is not an expert in any company, industry sector or investment topic.

Streetwise Reports Disclosure:
1) Peter Epstein's disclosures are listed above.
2) The following companies mentioned in the article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

( Companies Mentioned: FVAN:TSX.V; FVANF:OTCQB, )

Coverage Initiated on Energy Efficiency Firm, ‘One of a Kind Stock’

Source: Streetwise Reports   11/30/2019

The thesis for investing in this company is provided in a Raymond James report.In a Nov. 21 research note, analyst Pavel Molchanov reported that Raymond James initiated coverage on Am…

Source: Streetwise Reports   11/30/2019

The thesis for investing in this company is provided in a Raymond James report.

In a Nov. 21 research note, analyst Pavel Molchanov reported that Raymond James initiated coverage on Ameresco Inc. (AMRC:NYSE) with a Strong Buy rating and a $20 per share target price. The stock's current share price is around $16.35.

Molchanov reviewed the key aspects of this large U.S.-based energy service company with a footprint in all 50 states. One is that Ameresco is a "one stop shop for energy efficiency" and the only pure play in the space, affording "investors unique leverage to the efficiency theme."

Two, Ameresco's business lines are diverse as are its customers, which are commercial entities and public and nonprofit institutions, Molchanov highlighted. One service the company provides is implementation of energy efficiency solutions, for which it receives revenue upfront. Other recurring revenue comes from operations and maintenance.

The fact that buildings are projected to be a major component of the energy efficiency trend in the future is significant, Molchanov purported. An estimated 45% of U.S. construction companies plan to have 60%-plus "green building" projects by 2021, up from 32% in 2018. Part of this is cities and states mandating energy efficiency in buildings.

A third revenue source for Ameresco is its expanding portfolio of solar power and landfill gas assets, an area of current growth focus for it. "This in-house capacity buildout requires more capital deployment, but the result is a more predictable and higher-margin revenue mix," Molchanov noted.

Ameresco's future revenue growth and EBITDA look good, with growth expected to be mainly organic with a small portion resulting from mergers and acquisitions. In 2020 and 2021, the company should achieve attain an EBITDA increase of 10% and organic revenue growth of 7%, according to Raymond James. Both metrics increased since 2014 at a compound annual growth rate of 8% and 19%, respectively.

Molchanov concluded, "While Ameresco's strategy heightens the level of capital intensity, the story's appealing and differentiated aspects lead us to initiate coverage."

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures from Raymond James, Ameresco Inc., November 21, 2019

ANALYST INFORMATION

Analysts Holdings and Compensation: Equity analysts and their staffs at Raymond James are compensated based on a salary and bonus system. Several factors enter into the bonus determination, including quality and performance of research product, the analyst's success in rating stocks versus an industry index, and support effectiveness to trading and the retail and institutional sales forces. Other factors may include but are not limited to: overall ratings from internal (other than investment banking) or external parties and the general productivity and revenue generated in covered stocks.

The analyst Pavel Molchanov, primarily responsible for the preparation of this research report, attests to the following: (1) that the views and opinions rendered in this research report reflect his or her personal views about the subject companies or issuers and (2) that no part of the research analyst's compensation was, is, or will be directly or indirectly related to the specific recommendations or views in this research report. In addition, said analyst(s) has not received compensation from any subject company in the last 12 months.

RAYMOND JAMES RELATIONSHIP DISCLOSURES
Certain affiliates of the RJ Group expect to receive or intend to seek compensation for investment banking services from all companies under research coverage within the next three months.

Additional Risk and Disclosure information, as well as more information on the Raymond James rating system and suitability categories, is available here.

( Companies Mentioned: AMRC:NYSE, )

‘This is Amazing’: Technical Analyst Rates Oil & Gas Small Cap Strong Speculative Buy

Source: Clive Maund for Streetwise Reports   11/25/2019

Technical analyst Clive Maund details the fundamentals for this oil & gas firm and explains why he sees it as a strong speculative buy.

After a prolonged period of adversity and depression it looks like Amazing Energy Oil & Gas Co. (AMAZ:OTCQX) has at last “cleaned the clock” with respect to the obstacles that have been blocking its way until recently. In the first place, it has sorted out the problematic situation with the Miesners. As published on the 13th in the company’s 10K…

“In November 2019, the company came to terms on a proposed agreement with Jed and Lesa Miesner (the “Miesners”), and their affiliated companies JLM Strategic Investments, LP (“JLM”), Petro Pro, Ltd. (“PPL”), US Petro, LLC (“US Petro”). Pursuant to the agreement, the Company will pay the total sum of $1,750,000 to the Miesners and/or their affiliated entities.

“The proposed agreement provides that the Company will acquire all right, title and interest in and to three notes and mortgages/deeds of trust, with a value of approximately $4,200,000 held by the Miesners, JLM, and PPL, respectively. Furthermore, the parties have agreed that the Miesners, and their related affiliates, will surrender all of the shares of the Company’s common stock held by them, forgo any claims to all options to acquire shares of the Company’s common stock, all warrants to purchase the Company’s common stock, and any claims for compensation and wrongful termination pursuant to Jed Miesner’s former employment agreement with the Company, as well as a release of any and all other claims the Miesners, and/or any of their affiliated companies, may have against the Company and/or any of its subsidiaries. In exchange, the Company will forgo any claims it may have against Jed Miesner pursuant to his former employment agreement with the Company and any other additional claims the Company, and/or any of its subsidiaries, may have against the Miesners and/or any of their affiliated companies. As a part of the proposed agreement, Jed Miesner will also resign from the Company’s board of directors.”

Next it has just announced that it has closed a substantial US$4,500,000 financing and also that it has acquired assets in Mississippi known as the Denver Mint Project.

So, with the these major steps behind it and significant obstacles removed, the company looks better placed to advance towards its goals, which means that the stock is now much more likely to advance. That makes it interesting to us, for as we will now see on the charts, it is exceedingly cheap here and in a very good position to begin a major new bull market.

We’ll start with the very long-term chart to gain an overall perspective and quickly “drill down” to recent charts to get a handle on what’s going on with this stock.

On the very long-term 18-year chart, we can see that, after an initial blaze of glory in 2006, the stock came crashing right back down in a severe bear market to almost zero by the end of 2008, after which it has trundled sideways for over 10 years within a gigantic Flat Pan base.

Because the 10-year chart does not include the early spike, it opens out the base pattern and on it we can see that after the recent decline, Amazing is at quite strong support right at the bottom of the trading range that comprises the Flat Pan base. The Accumulation line has been persistently strong for a long time, and it takes precedence over the weak On-balance Volume line as a reliable indicator, because it is calculated on an intraday tick for tick basis, whereas On-balance Volume is only end of day. It suggests that new bull market is incubating. What this chart makes dramatically clear is that this stock is remarkably cheap here—you can buy bucketloads of it for almost nothing, and it only has to go up to 20 cents, a modest objective, and you will doubled your money.

The 3-year chart is also interesting because it shows that the downtrend in force from late 2017 has this year morphed into a bullish Falling Wedge, and with the Wedge rapidly closing up at support as the fundamentals improve significantly, a breakout into a new bull market looks set to occur soon, and given how persistently negative sentiment towards this stock has been in the recent past, we could even see a spike after it does break out.

On the latest 13-month chart we can see upside volume improving in the recent past as downside momentum (MACD) drops out.

Amazing Energy therefore looks like an immediate strong speculative buy here.

Amazing Energy Oil & Gas website.

Amazing Energy Oil & Gas Co, AMAZ on OTC, closed at $0.09 on 22nd November 2019.

Originally posted on CliveMaund.com at 8.00 am EST on 25th November 2019.

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Disclosure:
1) Clive Maund: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. CliveMaund.com disclosures below. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Amazing Energy, a company mentioned in this article.

Charts provided by the author.

CliveMaund.com Disclosure:
The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund’s opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund’s opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.

( Companies Mentioned: AMAZ:OTCQX,
)

Source: Clive Maund for Streetwise Reports   11/25/2019

Technical analyst Clive Maund details the fundamentals for this oil & gas firm and explains why he sees it as a strong speculative buy.

After a prolonged period of adversity and depression it looks like Amazing Energy Oil & Gas Co. (AMAZ:OTCQX) has at last "cleaned the clock" with respect to the obstacles that have been blocking its way until recently. In the first place, it has sorted out the problematic situation with the Miesners. As published on the 13th in the company's 10K…

"In November 2019, the company came to terms on a proposed agreement with Jed and Lesa Miesner (the "Miesners"), and their affiliated companies JLM Strategic Investments, LP ("JLM"), Petro Pro, Ltd. ("PPL"), US Petro, LLC ("US Petro"). Pursuant to the agreement, the Company will pay the total sum of $1,750,000 to the Miesners and/or their affiliated entities.
"The proposed agreement provides that the Company will acquire all right, title and interest in and to three notes and mortgages/deeds of trust, with a value of approximately $4,200,000 held by the Miesners, JLM, and PPL, respectively. Furthermore, the parties have agreed that the Miesners, and their related affiliates, will surrender all of the shares of the Company's common stock held by them, forgo any claims to all options to acquire shares of the Company’s common stock, all warrants to purchase the Company's common stock, and any claims for compensation and wrongful termination pursuant to Jed Miesner's former employment agreement with the Company, as well as a release of any and all other claims the Miesners, and/or any of their affiliated companies, may have against the Company and/or any of its subsidiaries. In exchange, the Company will forgo any claims it may have against Jed Miesner pursuant to his former employment agreement with the Company and any other additional claims the Company, and/or any of its subsidiaries, may have against the Miesners and/or any of their affiliated companies. As a part of the proposed agreement, Jed Miesner will also resign from the Company’s board of directors."

Next it has just announced that it has closed a substantial US$4,500,000 financing and also that it has acquired assets in Mississippi known as the Denver Mint Project.

So, with the these major steps behind it and significant obstacles removed, the company looks better placed to advance towards its goals, which means that the stock is now much more likely to advance. That makes it interesting to us, for as we will now see on the charts, it is exceedingly cheap here and in a very good position to begin a major new bull market.

We’ll start with the very long-term chart to gain an overall perspective and quickly "drill down" to recent charts to get a handle on what’s going on with this stock.

On the very long-term 18-year chart, we can see that, after an initial blaze of glory in 2006, the stock came crashing right back down in a severe bear market to almost zero by the end of 2008, after which it has trundled sideways for over 10 years within a gigantic Flat Pan base.


Because the 10-year chart does not include the early spike, it opens out the base pattern and on it we can see that after the recent decline, Amazing is at quite strong support right at the bottom of the trading range that comprises the Flat Pan base. The Accumulation line has been persistently strong for a long time, and it takes precedence over the weak On-balance Volume line as a reliable indicator, because it is calculated on an intraday tick for tick basis, whereas On-balance Volume is only end of day. It suggests that new bull market is incubating. What this chart makes dramatically clear is that this stock is remarkably cheap here—you can buy bucketloads of it for almost nothing, and it only has to go up to 20 cents, a modest objective, and you will doubled your money.


The 3-year chart is also interesting because it shows that the downtrend in force from late 2017 has this year morphed into a bullish Falling Wedge, and with the Wedge rapidly closing up at support as the fundamentals improve significantly, a breakout into a new bull market looks set to occur soon, and given how persistently negative sentiment towards this stock has been in the recent past, we could even see a spike after it does break out.


On the latest 13-month chart we can see upside volume improving in the recent past as downside momentum (MACD) drops out.


Amazing Energy therefore looks like an immediate strong speculative buy here.

Amazing Energy Oil & Gas website.

Amazing Energy Oil & Gas Co, AMAZ on OTC, closed at $0.09 on 22nd November 2019.

Originally posted on CliveMaund.com at 8.00 am EST on 25th November 2019.

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Disclosure:
1) Clive Maund: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. CliveMaund.com disclosures below. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Amazing Energy, a company mentioned in this article.

Charts provided by the author.

CliveMaund.com Disclosure:
The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.

( Companies Mentioned: AMAZ:OTCQX, )

Skyharbour About to Embark on Deep Drill Program in Athabasca Basin

Source: Maurice Jackson for Streetwise Reports   11/25/2019

Skyharbour CEO Jordan Trimble discusses uranium supply and demand fundamentals with Maurice Jackson of Proven and Probable and his company’s upcoming drill program in the deep rocks of the Athabasca Basin.

Maurice Jackson: Joining us for a conversation is Jordan Trimble, the president, director and CEO of Skyharbour Resources Ltd. (SYH:TSX.V; SYHBF:OTCQB). Glad to speak with you today to provide shareholders updates on a number of key developments that are currently taking place with Skyharbour Resources Ltd.. Today’s interview will focus on the uranium price and upcoming news flow.

Before we delve into these topics, Mr. Trimble, for someone new to the story, please introduce us to Skyharbour Resources, A Preeminent Uranium Explorer in Canada’s Athabasca Basin, and the opportunity the company presents to the market.

Jordan Trimble: Skyharbour Resources is a high-grade exploration and early stage development uranium company. We have six projects located in the Athabasca Basin, which hosts the highest-grade depository of uranium in the world. Some notable recent discoveries there were made by companies like NextGen, Fission and Denison. The six projects were acquired over the last several years. We spent the first few years when I started running the company acquiring these projects and did a good job of being opportunistic in a tough uranium market wearing our contrarian caps and going out there and buying these projects for really pennies on the dollar. It’s a big land package, about a half a million acres of ground. Again, the various projects are scattered throughout the basin and what’s interesting is two of the projects have deposits, one of which is our flagship project called the Moore Project.

This is on the east side of the Athabasca Basin located proximal to nearby infrastructure and mills. There’s a high-grade mineralized zone there called the Maverick Zone. That’s where we’re going to be drilling in our upcoming drill program. The other projects outside of our flagship project we advance using something called prospect generation. This is a strategy whereby we look to bring in partner companies that can come in, that can fund the exploration. We get some cash and stock payments as well. So that allows us to focus our time, money and efforts on our flagship project really where we feel we have the best chance of adding value and making new discoveries and finding more high-grade uranium while partner companies advance the other projects.

So that’s a high level on the company. A fair bit of news flow coming out over the next six months as we have plans for drilling 2,500 meters at the Moore Project as I mentioned, but we also have two partner companies, Orano, which is France’s largest uranium mining company based in Paris. It’s planning an exploration program early in the new year and our Preston project is a part of its $8 million earn in on that project. Another partner company Azincourt is planning to drill 2,500 meters at our East Preston project. So you’ll have three simultaneous exploration and drill programs underway early in the new year and we feel that the timing couldn’t be better given the rising uranium price. We’ve just started to see the spot price tick up here recently.

Maurice Jackson: That set the stage for today’s discussion regarding some key fundamentals in the uranium sector. Jordan, regarding react requirements, what is the annual global demand for uranium?

Jordan Trimble: Right now, it is well over 190 million pounds, close to about 195 million pounds. Again, that’s in a nuclear reactors globally and that’s been steadily increasing. There’s a fallacy out there that this industry is in decline; that’s not the case. It’s very much still a growth industry in places like China and India. I was at a conference earlier in the fall in London, the World Nuclear Association, whereby they came out with their biannual nuclear fuel report, which for the first time since Fukushima had increasing demand in all three scenarios, an upper-case, a mid-case and a lower case. In the upper and mid-case or base case, there was quite significant increase in demand. So we see demand continuing to grow.

Maurice Jackson: Now let’s juxtapose that with the primary mine supply, which is?

Jordan Trimble: A lot lower. We’re now producing less than about 135 million pounds annually. That’s down from about just over 160 million pounds a couple of years back. We’ve seen some major supply cuts, project deferrals. We’ve seen funds that have come in in the last year, year and a half, that have sequestered a new supply coming online that have bought pounds. All of this has led to a very large decrease in the amount of supply that’s out there. So a major structural supply deficit that’s forming will continue to eat away inventories and secondary supply. My sense of the market right now is you’ll probably see that coming to an end and we’ll start to see those supply cuts have a major impact on the spot price, and the contract price going forward.

Maurice Jackson: Let’s let that sink in for a moment. There’s an approximately 55 million pound supply deficit in the uranium sector for reactor requirements. That’s quite significant. Let’s see how this may increase the price of uranium and equally, if not more, reward the shareholders of Skyharbour.

Sir, last month we had the pleasure of having you on the program in which you noted some near-term catalysts that have your attention that may propel the price of uranium before the year end. Looks like the price movements you referenced may be coming to fruition as the price of uranium is up about 75 cents since we last spoke. What are the near-term catalysts and can you provide us with some updates since we last spoke?

Jordan Trimble: We are seeing the price move. There’s a handful of catalysts. We’ve touched on a few of them in the last interview, but just to reiterate some of the main drivers right now. One, seasonality. Seasonality in this sector with the price of the commodity and typically with the share prices as well. We see November through February and March as relatively strong months. Usually there’s outperformance. We’ve seen that just start to pick up in the last few weeks. It really started with Cameco’s quarterlies a few weeks back that the market liked and there was some notable positive commentary from Cameco, which is surprising given that the market commentary from them hasn’t been as upbeat over the last several years. So seasonality is one and we’ll see that continue I think into the new year. Two, getting back to Cameco and we talked about this in the last interview (Click Here). Cameco, having shut down the world’s largest uranium mine at McArthur River, has to source millions of pounds of material to fulfill its contracts and its deliveries.

Therefore, we know that in the next several months there’s still a fair bit of material and uranium that Cameco has to acquire. If it can’t source that from secondary supply sources, it will be in the spot market buying. It looks like they are coming in some estimates of upwards of 8 million pounds. Just to put some perspective on that, that amount of uranium that they bought in mid to late 2018 helped drive the uranium price up into the high $20s and we saw all the share prices respond positively hitting 52-week highs. Cameco spot market purchasing will continue into the new year. That’s a big driver. Another one too and more recently has been an increase in the price of conversion and enrichment. And so these prices have been increasing. The fuel cycle has been tightening. That’s usually a good leading indicator. We’ve seen that here over the last year in particular.

Then last but not least, and this actually just come out here in the last few days. There was the non-renewal of key sanction waivers on Iran and on some of its conversion enrichment facilities. That has been recently announced in the U.S. and that also tightened up the market because the implications of that could affect companies in Europe, in China, and in Russia that deal with Iran and deal with Iran’s nuclear program, but also deal with the U.S. and sell uranium and products to the U.S.. What we’re seeing right now across the board is a tightening of the market and this is all positive for the spot price and ultimately the contract price going forward for uranium. As we see the price of the commodity move up, we will see that the share prices move up as well.

Maurice Jackson: Now germane to the spot price, can you provide us with the current contract price for uranium?

Jordan Trimble: The contract price is still hovering in the low $30s, and just to note on the spot versus the contract price. Historically most uranium is traded and bought and sold through long-term contracts. So that’s important to note. We have seen more recently, in particular in 2018, a lot of volume transacted on the spot market. That’s a good indicator in itself. The market’s cleaning up, but it’s important to note, and this is relevant in the U.S. where we’ve had this ongoing Section 232 and subsequent investigation and then the subsequent nuclear fuel working group, which we’re still waiting to hear back on really any day now.

As a result of that, we’ve seen really the largest buyer of uranium globally in U.S. nuclear utilities more or less forced to the sideline. There hasn’t been a whole lot of contracting as a result of that. Utilities are looking to get some clarity on where they have to be buying or not buying from. So you know when that’s finally put to bed over the coming weeks here, I think that that will clear the air, especially for U.S. nuclear utilities to step back into the market. When we’re looking at the contract versus the spot price, the spot price, yes, it’s been ticking up but we’re still in the mid-$20s. It’s still relatively low. So I think there’s a chance you see utilities come back and buy initially in the spot market and then ultimately we’ll see the market go back to more contracting and you’ll see the contract price pick up as well.

Maurice Jackson: Having a 55-million pound deficit to meet reactor requirements in and of itself may be a very rewarding proposition for shareholders in the future, but when one factors in the strategic moves that Skyharbour Resources will be making in their property bank, the story gets even more compelling. Speaking of Moore, sir, the company has a dual prong business model and the first being an exploration company. Take us to your flagship Moore Lake project, which is known for its rich, high-grade uranium and provide shareholders with an update there and the projected news flow that may be anticipated.

Jordan Trimble: I mentioned earlier and just to re-highlight some of the key upcoming catalysts. The big one is a drill program that we have planned early in the new year, 2,500 meters at our flagship Moore project. In our previous drill program earlier this year, we tested what’s called the basement rocks. This is the same geological setting where you’ve had recent major discoveries like NextGen, like Fission, like the Gryphon deposit at Denison’s Wheeler project. More recent exploration has been focused in these underlying basement rocks and that’s where you get the source rock in the feeder zones for high-grade uranium mineralization. So we really just scratched the surface down there. We know we have high grade up to 21% U308 in the sandstone, but there hasn’t been much drilling underneath in the basement rock. Now we did drill a few holes in our last program and our best drill hole, which was one of our last drill holes, we hit multi-percent uranium mineralization over about 2.5 meters.

That’s the hole that we’re going to go back and follow up on. We’ve done some more geophysics, which we did over the last few months. We’ve gotten some new geological modeling. So we’ve refined the targets in the basement rocks and in particular following up on that high-grade intersection in one of the last holes from the last program. We think there’s a much larger structure and zone of mineralization just a little bit deeper down. We’re going to be drill testing that. It’s also opened a lock strike. This is the main Maverick quarters, about 4 kilometers long, only about half of that’s been systematically drill tested. So we’re going to have some drill holes that that we spot along strike and last but not least a couple holes, small amount within that program that’s going to be testing a new target that we made a new discovery on earlier in the year called the Otter Grid.

So there’ll be a couple shallow holes there, but the main focus is going to be continuing to follow up on high-grade basement hosted uranium mineralization. We really believe that we’re right on the cusp of finding something much larger in these basement rocks and feeder zones. That will be a key catalyst for us. Really one hole makes a big difference for a company of our size. We also have, as mentioned, partner companies Orano and Azincourt that are planning exploration and drill programs early in the new year as well that they’re funding. Collectively you have, as I mentioned earlier, three programs that will be underway. Just under $3 million planned in exploration, the bulk of that funded by partner companies. A lot of news flow coming up over the next six months.

Maurice Jackson: Switching gears. I’d like to take a moment to remind our audience when you have a compelling thesis and a low share price, that’s called a sale. The goal for any investor and speculator should be to buy low and sell high. Jordan, please share the current price of Skyharbour Resources.

Jordan Trimble: We are trading around 16 cents Canadian. We talked about it in the last interview; we’ve had some pressure over the course of the year. A big part of that is this Section 232 non-decision where we saw a lot of money flow out of the uranium space. It hit us in our peer group and we also have some tax loss selling. I’ve been very active buying in the market. I bought shares as recent as today. I think at these prices and I call it a $10, $11 million Canadian market cap. I see there being a lot of upside from here and putting my money where my mouth is. So it’s definitely worth taking a look at it. Again, I think the value proposition given the catalysts we have coming up, given the uranium market in particular in the near term, I think the value proposition is as strong as it’s ever been.

Maurice Jackson: In closing, sir, what keeps you up at night that we don’t know about?

Jordan Trimble: We are an exploration company so you are going and you’re looking to make new discoveries and there’s no guarantee of success. I will say that we’ve done a lot of work in the last five and a half, six months refining these basement hosted targets. If we have as good of a shot as we’re ever going to have, it’s going to be in this drill program and that’s just one of again, three programs that are going to be underway come the new year.

Maurice Jackson: Mr. Trimble, last question. What did I forget to ask?

Jordan Trimble: I think that covers it all. It’s definitely worth people taking a look at, especially if these prices and given what we have coming up.

Maurice Jackson: Well, I want to share in reference to the prices. We will be active buyers of Skyharbour Resources as well during this time period as we love the value proposition and the strategic moves that the company is making. Mr. Trimble, for someone listening that wants to get more information about Skyharbour Resources, please share the website address.

Jordan Trimble: www.skyharbourltd.com.

Maurice Jackson: For direct inquiries, contact Jordan Trimble at 604-639-3856. Or you may email jtrimble@skyharbourltd.com. Also you may reach Simon Dyakowski at 604-619-7469 or you may email sdyakowski@sentenialmarket.com. Skyharbour Resources Ltd. (SYH:TSX.V; SYHBF:OTCQB). Skyharbour Resources is a sponsor of Proven and Probable.

Before you make your next Precious Metals purchase, call me. I’m a licensed representative for Miles Franklin Precious Metals Investments where we offer a number of options to expand your precious metals portfolio from physical delivery, offshore depositories, precious metal IRAs, and private blockchain distributed ledger technology. Call me directly at 855-505-1900 or you may email maurice@milesfranklin.com. Finally, please subscribe to Provenandprobable.com for Mining Insights and Bullion Sales.

Jordan Trimble of Skyharbour Resources, thank you for joining us today on Proven and Probable.

Maurice Jackson is the founder of Proven and Probable, a site that aims to enrich its subscribers through education in precious metals and junior mining companies that will enrich the world.

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Disclosure:
1) Maurice Jackson: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Skyharbour Resources. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: Skyharbour Rresources is a sponsor of Proven and Probable. Proven and Probable disclosures are listed below.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Skyharbour Resources. Click here for important disclosures about sponsor fees.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
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( Companies Mentioned: SYH:TSX.V; SYHBF:OTCQB,
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Source: Maurice Jackson for Streetwise Reports   11/25/2019

Skyharbour CEO Jordan Trimble discusses uranium supply and demand fundamentals with Maurice Jackson of Proven and Probable and his company's upcoming drill program in the deep rocks of the Athabasca Basin.

Maurice Jackson: Joining us for a conversation is Jordan Trimble, the president, director and CEO of Skyharbour Resources Ltd. (SYH:TSX.V; SYHBF:OTCQB). Glad to speak with you today to provide shareholders updates on a number of key developments that are currently taking place with Skyharbour Resources Ltd.. Today's interview will focus on the uranium price and upcoming news flow.

Before we delve into these topics, Mr. Trimble, for someone new to the story, please introduce us to Skyharbour Resources, A Preeminent Uranium Explorer in Canada's Athabasca Basin, and the opportunity the company presents to the market.

Jordan Trimble: Skyharbour Resources is a high-grade exploration and early stage development uranium company. We have six projects located in the Athabasca Basin, which hosts the highest-grade depository of uranium in the world. Some notable recent discoveries there were made by companies like NextGen, Fission and Denison. The six projects were acquired over the last several years. We spent the first few years when I started running the company acquiring these projects and did a good job of being opportunistic in a tough uranium market wearing our contrarian caps and going out there and buying these projects for really pennies on the dollar. It's a big land package, about a half a million acres of ground. Again, the various projects are scattered throughout the basin and what's interesting is two of the projects have deposits, one of which is our flagship project called the Moore Project.

This is on the east side of the Athabasca Basin located proximal to nearby infrastructure and mills. There's a high-grade mineralized zone there called the Maverick Zone. That's where we're going to be drilling in our upcoming drill program. The other projects outside of our flagship project we advance using something called prospect generation. This is a strategy whereby we look to bring in partner companies that can come in, that can fund the exploration. We get some cash and stock payments as well. So that allows us to focus our time, money and efforts on our flagship project really where we feel we have the best chance of adding value and making new discoveries and finding more high-grade uranium while partner companies advance the other projects.

So that's a high level on the company. A fair bit of news flow coming out over the next six months as we have plans for drilling 2,500 meters at the Moore Project as I mentioned, but we also have two partner companies, Orano, which is France's largest uranium mining company based in Paris. It's planning an exploration program early in the new year and our Preston project is a part of its $8 million earn in on that project. Another partner company Azincourt is planning to drill 2,500 meters at our East Preston project. So you'll have three simultaneous exploration and drill programs underway early in the new year and we feel that the timing couldn't be better given the rising uranium price. We've just started to see the spot price tick up here recently.

Maurice Jackson: That set the stage for today's discussion regarding some key fundamentals in the uranium sector. Jordan, regarding react requirements, what is the annual global demand for uranium?

Jordan Trimble: Right now, it is well over 190 million pounds, close to about 195 million pounds. Again, that's in a nuclear reactors globally and that's been steadily increasing. There's a fallacy out there that this industry is in decline; that's not the case. It's very much still a growth industry in places like China and India. I was at a conference earlier in the fall in London, the World Nuclear Association, whereby they came out with their biannual nuclear fuel report, which for the first time since Fukushima had increasing demand in all three scenarios, an upper-case, a mid-case and a lower case. In the upper and mid-case or base case, there was quite significant increase in demand. So we see demand continuing to grow.

Maurice Jackson: Now let's juxtapose that with the primary mine supply, which is?

Jordan Trimble: A lot lower. We're now producing less than about 135 million pounds annually. That's down from about just over 160 million pounds a couple of years back. We've seen some major supply cuts, project deferrals. We've seen funds that have come in in the last year, year and a half, that have sequestered a new supply coming online that have bought pounds. All of this has led to a very large decrease in the amount of supply that's out there. So a major structural supply deficit that's forming will continue to eat away inventories and secondary supply. My sense of the market right now is you'll probably see that coming to an end and we'll start to see those supply cuts have a major impact on the spot price, and the contract price going forward.

Maurice Jackson: Let's let that sink in for a moment. There's an approximately 55 million pound supply deficit in the uranium sector for reactor requirements. That's quite significant. Let's see how this may increase the price of uranium and equally, if not more, reward the shareholders of Skyharbour.

Sir, last month we had the pleasure of having you on the program in which you noted some near-term catalysts that have your attention that may propel the price of uranium before the year end. Looks like the price movements you referenced may be coming to fruition as the price of uranium is up about 75 cents since we last spoke. What are the near-term catalysts and can you provide us with some updates since we last spoke?

Jordan Trimble: We are seeing the price move. There's a handful of catalysts. We've touched on a few of them in the last interview, but just to reiterate some of the main drivers right now. One, seasonality. Seasonality in this sector with the price of the commodity and typically with the share prices as well. We see November through February and March as relatively strong months. Usually there's outperformance. We've seen that just start to pick up in the last few weeks. It really started with Cameco's quarterlies a few weeks back that the market liked and there was some notable positive commentary from Cameco, which is surprising given that the market commentary from them hasn't been as upbeat over the last several years. So seasonality is one and we'll see that continue I think into the new year. Two, getting back to Cameco and we talked about this in the last interview (Click Here). Cameco, having shut down the world's largest uranium mine at McArthur River, has to source millions of pounds of material to fulfill its contracts and its deliveries.

Therefore, we know that in the next several months there's still a fair bit of material and uranium that Cameco has to acquire. If it can't source that from secondary supply sources, it will be in the spot market buying. It looks like they are coming in some estimates of upwards of 8 million pounds. Just to put some perspective on that, that amount of uranium that they bought in mid to late 2018 helped drive the uranium price up into the high $20s and we saw all the share prices respond positively hitting 52-week highs. Cameco spot market purchasing will continue into the new year. That's a big driver. Another one too and more recently has been an increase in the price of conversion and enrichment. And so these prices have been increasing. The fuel cycle has been tightening. That's usually a good leading indicator. We've seen that here over the last year in particular.

Then last but not least, and this actually just come out here in the last few days. There was the non-renewal of key sanction waivers on Iran and on some of its conversion enrichment facilities. That has been recently announced in the U.S. and that also tightened up the market because the implications of that could affect companies in Europe, in China, and in Russia that deal with Iran and deal with Iran's nuclear program, but also deal with the U.S. and sell uranium and products to the U.S.. What we're seeing right now across the board is a tightening of the market and this is all positive for the spot price and ultimately the contract price going forward for uranium. As we see the price of the commodity move up, we will see that the share prices move up as well.

Maurice Jackson: Now germane to the spot price, can you provide us with the current contract price for uranium?

Jordan Trimble: The contract price is still hovering in the low $30s, and just to note on the spot versus the contract price. Historically most uranium is traded and bought and sold through long-term contracts. So that's important to note. We have seen more recently, in particular in 2018, a lot of volume transacted on the spot market. That's a good indicator in itself. The market's cleaning up, but it's important to note, and this is relevant in the U.S. where we've had this ongoing Section 232 and subsequent investigation and then the subsequent nuclear fuel working group, which we're still waiting to hear back on really any day now.

As a result of that, we've seen really the largest buyer of uranium globally in U.S. nuclear utilities more or less forced to the sideline. There hasn't been a whole lot of contracting as a result of that. Utilities are looking to get some clarity on where they have to be buying or not buying from. So you know when that's finally put to bed over the coming weeks here, I think that that will clear the air, especially for U.S. nuclear utilities to step back into the market. When we're looking at the contract versus the spot price, the spot price, yes, it's been ticking up but we're still in the mid-$20s. It's still relatively low. So I think there's a chance you see utilities come back and buy initially in the spot market and then ultimately we'll see the market go back to more contracting and you'll see the contract price pick up as well.

Maurice Jackson: Having a 55-million pound deficit to meet reactor requirements in and of itself may be a very rewarding proposition for shareholders in the future, but when one factors in the strategic moves that Skyharbour Resources will be making in their property bank, the story gets even more compelling. Speaking of Moore, sir, the company has a dual prong business model and the first being an exploration company. Take us to your flagship Moore Lake project, which is known for its rich, high-grade uranium and provide shareholders with an update there and the projected news flow that may be anticipated.

Jordan Trimble: I mentioned earlier and just to re-highlight some of the key upcoming catalysts. The big one is a drill program that we have planned early in the new year, 2,500 meters at our flagship Moore project. In our previous drill program earlier this year, we tested what's called the basement rocks. This is the same geological setting where you've had recent major discoveries like NextGen, like Fission, like the Gryphon deposit at Denison's Wheeler project. More recent exploration has been focused in these underlying basement rocks and that's where you get the source rock in the feeder zones for high-grade uranium mineralization. So we really just scratched the surface down there. We know we have high grade up to 21% U308 in the sandstone, but there hasn't been much drilling underneath in the basement rock. Now we did drill a few holes in our last program and our best drill hole, which was one of our last drill holes, we hit multi-percent uranium mineralization over about 2.5 meters.

That's the hole that we're going to go back and follow up on. We've done some more geophysics, which we did over the last few months. We've gotten some new geological modeling. So we've refined the targets in the basement rocks and in particular following up on that high-grade intersection in one of the last holes from the last program. We think there's a much larger structure and zone of mineralization just a little bit deeper down. We're going to be drill testing that. It's also opened a lock strike. This is the main Maverick quarters, about 4 kilometers long, only about half of that's been systematically drill tested. So we're going to have some drill holes that that we spot along strike and last but not least a couple holes, small amount within that program that's going to be testing a new target that we made a new discovery on earlier in the year called the Otter Grid.

So there'll be a couple shallow holes there, but the main focus is going to be continuing to follow up on high-grade basement hosted uranium mineralization. We really believe that we're right on the cusp of finding something much larger in these basement rocks and feeder zones. That will be a key catalyst for us. Really one hole makes a big difference for a company of our size. We also have, as mentioned, partner companies Orano and Azincourt that are planning exploration and drill programs early in the new year as well that they're funding. Collectively you have, as I mentioned earlier, three programs that will be underway. Just under $3 million planned in exploration, the bulk of that funded by partner companies. A lot of news flow coming up over the next six months.

Maurice Jackson: Switching gears. I'd like to take a moment to remind our audience when you have a compelling thesis and a low share price, that's called a sale. The goal for any investor and speculator should be to buy low and sell high. Jordan, please share the current price of Skyharbour Resources.

Jordan Trimble: We are trading around 16 cents Canadian. We talked about it in the last interview; we've had some pressure over the course of the year. A big part of that is this Section 232 non-decision where we saw a lot of money flow out of the uranium space. It hit us in our peer group and we also have some tax loss selling. I've been very active buying in the market. I bought shares as recent as today. I think at these prices and I call it a $10, $11 million Canadian market cap. I see there being a lot of upside from here and putting my money where my mouth is. So it's definitely worth taking a look at it. Again, I think the value proposition given the catalysts we have coming up, given the uranium market in particular in the near term, I think the value proposition is as strong as it's ever been.

Maurice Jackson: In closing, sir, what keeps you up at night that we don't know about?

Jordan Trimble: We are an exploration company so you are going and you're looking to make new discoveries and there's no guarantee of success. I will say that we've done a lot of work in the last five and a half, six months refining these basement hosted targets. If we have as good of a shot as we're ever going to have, it's going to be in this drill program and that's just one of again, three programs that are going to be underway come the new year.

Maurice Jackson: Mr. Trimble, last question. What did I forget to ask?

Jordan Trimble: I think that covers it all. It's definitely worth people taking a look at, especially if these prices and given what we have coming up.

Maurice Jackson: Well, I want to share in reference to the prices. We will be active buyers of Skyharbour Resources as well during this time period as we love the value proposition and the strategic moves that the company is making. Mr. Trimble, for someone listening that wants to get more information about Skyharbour Resources, please share the website address.

Jordan Trimble: www.skyharbourltd.com.

Maurice Jackson: For direct inquiries, contact Jordan Trimble at 604-639-3856. Or you may email jtrimble@skyharbourltd.com. Also you may reach Simon Dyakowski at 604-619-7469 or you may email sdyakowski@sentenialmarket.com. Skyharbour Resources Ltd. (SYH:TSX.V; SYHBF:OTCQB). Skyharbour Resources is a sponsor of Proven and Probable.

Before you make your next Precious Metals purchase, call me. I'm a licensed representative for Miles Franklin Precious Metals Investments where we offer a number of options to expand your precious metals portfolio from physical delivery, offshore depositories, precious metal IRAs, and private blockchain distributed ledger technology. Call me directly at 855-505-1900 or you may email maurice@milesfranklin.com. Finally, please subscribe to Provenandprobable.com for Mining Insights and Bullion Sales.

Jordan Trimble of Skyharbour Resources, thank you for joining us today on Proven and Probable.

Maurice Jackson is the founder of Proven and Probable, a site that aims to enrich its subscribers through education in precious metals and junior mining companies that will enrich the world.

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Disclosure:
1) Maurice Jackson: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Skyharbour Resources. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: Skyharbour Rresources is a sponsor of Proven and Probable. Proven and Probable disclosures are listed below.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Skyharbour Resources. Click here for important disclosures about sponsor fees.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Skyharbour Resources, a company mentioned in this article.

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( Companies Mentioned: SYH:TSX.V; SYHBF:OTCQB, )

Oil & Gas Royalty MLP Benefits from ‘Record Production in Q3/19’

Source: Streetwise Reports   11/23/2019

The quarterly highlights are provided in a Raymond James report.

In a Nov. 7 research note, Raymond James analyst John Freeman wrote that Kimbell Royalty Partners, LP (KRP:NYSE) “reported record production in Q3/19, making way for about an 8% sequential distribution growth.”

This quarterly result exceeded consensus’ estimate by about 11% and Raymond James’ forecast by about 2%. Freeman highlighted that Kimbell achieved this despite the number of rigs on its acreage dropping in Q3/19 by 8%, driven by an industry slowdown. “We believe [this] is a testament to the low Proven Developed Producing (PDP) decline strategy that Kimbell employs,” he added.

Consequently, the master limited partnership (MLP) increased its Q4/19 guidance at the midpoint by about 5% to 11,600,000–12,800,000 barrels of oil equivalent per day, in line with the Street’s guidance.

One of the highlights in Q3/19 was the quick result from Kimbell adding a team member to “proactively search for and recover production in suspense across its asset base,” noted Freeman. Within only two months, the move benefitted the MLP to the tune of about $600,000 in cash flow that otherwise would have been delayed indefinitely. “This should be an incremental benefit as Kimbell continues to improve this process going forward, so we could see more positive surprises in future quarters on this front,” the analyst added.

Also in Q3/19, Kimbell’s microstrategy joint venture closed on $3 million worth of microscale deals. Since Q3/19 ended, the MLP closed another acquisition, $10 million for 186 net royal acres and 202 barrels of oil equivalent per day of current production from the STACK play, which will be accretive to discounted cash flow per unit in Q4/19. Additionally, management mentioned another significant potential purchase, in the Eagle Ford and late in the negotiations stage.

Freeman concluded, “We continue to favor Kimbell’s: 1) mineral interest business model (an asymmetric risk-reward play on development activity), 2) low PDP base decline rates (about 12%) and 3) aptitude for acquiring assets that are accretive to discounted cash flow per unit.”

Accordingly, Raymond James has a Strong Buy rating and a $19 per share target price on Kimbell Royalty.

The MLP’s stock was trading at the time of the report’s publication at around $14.28 per share, or a roughly 12% annualized yield, which Freeman described as surprising and significantly below where it should be, given Kimbell’s “steady, resilient production, distribution growth profile and favorable tax treatment through 2025.” The current stock price is $13.89.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures from Raymond James, Kimbell Royalty Partners LP, November 7, 2019

ANALYST INFORMATION

Analysts Holdings and Compensation: Equity analysts and their staffs at Raymond James are compensated based on a salary and bonus system. Several factors enter into the bonus determination, including quality and performance of research product, the analyst’s success in rating stocks versus an industry index, and support effectiveness to trading and the retail and institutional sales forces. Other factors may include but are not limited to: overall ratings from internal (other than investment banking) or external parties and the general productivity and revenue generated in covered stocks.

The analyst John Freeman, primarily responsible for the preparation of this research report, attests to the following: (1) that the views and opinions rendered in this research report reflect his or her personal views about the subject companies or issuers and (2) that no part of the research analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views in this research report. In addition, said analyst(s) has not received compensation from any subject company in the last 12 months.

RAYMOND JAMES RELATIONSHIP DISCLOSURES
Certain affiliates of the RJ Group expect to receive or intend to seek compensation for investment banking services from all companies under research coverage within the next three months.

Limited Partnerships may generate unrelated business taxable income (UBTI), which can create a tax liability that must be paid from a retirement account. To the extent that Raymond James is your IRA custodian, and there is potential tax liability for UBTI generated by the fund, Raymond James will take the necessary steps to pay the tax from the retirement account by working with a third party to compute the tax liability and prepare the IRS form 990-T for submission to the IRS.

Raymond James & Associates, Inc. makes a market in the shares of Kimbell Royalty Partners L.P.

Raymond James & Associates has managed or co-managed an offering of securities for Kimbell Royalty Partners L.P. within the past 12 months.

Additional Risk and Disclosure information, as well as more information on the Raymond James rating system and suitability categories, is available here.

( Companies Mentioned: KRP:NYSE,
)

Source: Streetwise Reports   11/23/2019

The quarterly highlights are provided in a Raymond James report.

In a Nov. 7 research note, Raymond James analyst John Freeman wrote that Kimbell Royalty Partners, LP (KRP:NYSE) "reported record production in Q3/19, making way for about an 8% sequential distribution growth."

This quarterly result exceeded consensus' estimate by about 11% and Raymond James' forecast by about 2%. Freeman highlighted that Kimbell achieved this despite the number of rigs on its acreage dropping in Q3/19 by 8%, driven by an industry slowdown. "We believe [this] is a testament to the low Proven Developed Producing (PDP) decline strategy that Kimbell employs," he added.

Consequently, the master limited partnership (MLP) increased its Q4/19 guidance at the midpoint by about 5% to 11,600,000–12,800,000 barrels of oil equivalent per day, in line with the Street's guidance.

One of the highlights in Q3/19 was the quick result from Kimbell adding a team member to "proactively search for and recover production in suspense across its asset base," noted Freeman. Within only two months, the move benefitted the MLP to the tune of about $600,000 in cash flow that otherwise would have been delayed indefinitely. "This should be an incremental benefit as Kimbell continues to improve this process going forward, so we could see more positive surprises in future quarters on this front," the analyst added.

Also in Q3/19, Kimbell's microstrategy joint venture closed on $3 million worth of microscale deals. Since Q3/19 ended, the MLP closed another acquisition, $10 million for 186 net royal acres and 202 barrels of oil equivalent per day of current production from the STACK play, which will be accretive to discounted cash flow per unit in Q4/19. Additionally, management mentioned another significant potential purchase, in the Eagle Ford and late in the negotiations stage.

Freeman concluded, "We continue to favor Kimbell's: 1) mineral interest business model (an asymmetric risk-reward play on development activity), 2) low PDP base decline rates (about 12%) and 3) aptitude for acquiring assets that are accretive to discounted cash flow per unit."

Accordingly, Raymond James has a Strong Buy rating and a $19 per share target price on Kimbell Royalty.

The MLP's stock was trading at the time of the report's publication at around $14.28 per share, or a roughly 12% annualized yield, which Freeman described as surprising and significantly below where it should be, given Kimbell's "steady, resilient production, distribution growth profile and favorable tax treatment through 2025." The current stock price is $13.89.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures from Raymond James, Kimbell Royalty Partners LP, November 7, 2019

ANALYST INFORMATION

Analysts Holdings and Compensation: Equity analysts and their staffs at Raymond James are compensated based on a salary and bonus system. Several factors enter into the bonus determination, including quality and performance of research product, the analyst's success in rating stocks versus an industry index, and support effectiveness to trading and the retail and institutional sales forces. Other factors may include but are not limited to: overall ratings from internal (other than investment banking) or external parties and the general productivity and revenue generated in covered stocks.

The analyst John Freeman, primarily responsible for the preparation of this research report, attests to the following: (1) that the views and opinions rendered in this research report reflect his or her personal views about the subject companies or issuers and (2) that no part of the research analyst's compensation was, is, or will be directly or indirectly related to the specific recommendations or views in this research report. In addition, said analyst(s) has not received compensation from any subject company in the last 12 months.

RAYMOND JAMES RELATIONSHIP DISCLOSURES
Certain affiliates of the RJ Group expect to receive or intend to seek compensation for investment banking services from all companies under research coverage within the next three months.

Limited Partnerships may generate unrelated business taxable income (UBTI), which can create a tax liability that must be paid from a retirement account. To the extent that Raymond James is your IRA custodian, and there is potential tax liability for UBTI generated by the fund, Raymond James will take the necessary steps to pay the tax from the retirement account by working with a third party to compute the tax liability and prepare the IRS form 990-T for submission to the IRS.
Raymond James & Associates, Inc. makes a market in the shares of Kimbell Royalty Partners L.P.
Raymond James & Associates has managed or co-managed an offering of securities for Kimbell Royalty Partners L.P. within the past 12 months.

Additional Risk and Disclosure information, as well as more information on the Raymond James rating system and suitability categories, is available here.

( Companies Mentioned: KRP:NYSE, )

Uranium Major ‘Heading Into a Bigger Q4’

Source: Streetwise Reports   11/23/2019

The Q3/19 results and the Q4/19 outlook are outlined in a BMO Capital Markets report.In a Nov. 5 research note, BMO Capital Markets analyst Alexander Pearce wrote that following the r…

Source: Streetwise Reports   11/23/2019

The Q3/19 results and the Q4/19 outlook are outlined in a BMO Capital Markets report.

In a Nov. 5 research note, BMO Capital Markets analyst Alexander Pearce wrote that following the reporting of Q3/19, the outlook for Cameco Corp. (CCO:TSX; CCJ:NYSE) "remains robust, with a strong balance sheet and upside potential if uranium prices recover quicker than expected."

Q4/19 is expected to be more active than Q3/19, as is typical for the uranium company, Pearce noted. For one, BMO expects Cameco to make record purchases in Q4/19 of greater than 7,000,000 pounds (7 Mlb) of uranium, including 1.2 Mlb from Inkai, to meet the midpoint of guidance. Further, BMO expects Cameco to sell 13.5 Mlb of uranium in Q4/19, which would constitute a quarterly record and which should drive CA$157 million of free cash flow.

An improved uranium price would boost Cameco's multiples, and BMO also expects the price to increase in the near term. This would result from a continued supply deficit and increased competitive tension in the spot market from Cameco's purchases.

As for Q3/19, Pearce reported that Cameco experienced an estimated loss of CA$0.13 per share versus BMO's forecast loss of CA$0.01. The loss was mostly due to the company selling less uranium than expected, a total 6.1 Mlb versus 7.2 Mlb. Regardless, Cameco subsequently maintained guidance for sales and purchases.

BMO lowered its EBITDA estimates, by 1% for 2019 to CA$408 million and by 2% for 2020 to CA$382 million.

Cameco ended Q3/19 with CA$132 million of net debt and expects to turn net cash in 2020, indicating the company is in a "robust position," Pearce noted.

BMO has an Outperform rating and a CA$16 per share price target on Cameco, whose stock is currently trading at around CA$12.59 per share.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Cameco, a company mentioned in this article.

Disclosures from BMO Capital Markets, Cameco, November 5, 2019

IMPORTANT DISCLOSURES

Analyst's Certification
I, Alexander Pearce, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.

Company Specific Disclosures
Disclosure 5: BMO Capital Markets or an affiliate received compensation for products or services other than investment banking services within the past 12 months from Cameco.
Disclosure 6C: Cameco is a client (or was a client) of BMO Nesbitt Burns Inc., BMO Capital Markets Corp., BMO Capital Markets Limited or an affiliate within the past 12 months: C) Non-Securities Related Services.
Disclosure 8A: BMO Capital Markets or an affiliate has a financial interest in 1% or more of any class of the equity securities of Cameco.
Disclosure 8C: BMO Capital Markets or an affiliate has a financial interest in 0.5% or more in the issued share capital of Cameco.
Disclosure 8D: BMO Capital Markets or an affiliate has a short financial interest in 0.5% or more in the issued share capital of Cameco.
Disclosure 9B: BMO Capital Markets makes a market in Cameco in United States.

For Important Disclosures on the stocks discussed in this report, please click here.

( Companies Mentioned: CCO:TSX; CCJ:NYSE, )

Torchlight Firing on All Fronts in Texas

Source: Streetwise Reports   11/18/2019

The company continues to prove up its holdings as it searches for a partner.

Torchlight Energy Resources Inc. (TRCH:NASDAQ) is actively looking for a suitor for its large—134,000 net acres—Orogrande Basin project in Texas and is further exploring it to gain more scientific data.

ROTH Capital Partners has Torchlight under coverage with a Buy rating and a target price of $1.56. The stock is currently trading at around $0.82.

Torchlight holds a 72.5% interest in the Orogrande project. The company has re-entered a well bore the previous owners of the lease originated and, with the Cactus A35 1H well, has now drilled horizontally into the Penn formation.

“Our last producing well there was actually a 1,000 foot horizontal well that produced a lot of gas, but should also produce oil if we frack it hard enough,” Torchlight CEO John Brda told Streetwise Reports. “It’s all looking very good. It’s drilled and cased and ready for fracking, which we will do at the end of the month.”

The Penn formation has a dual porosity system, which means it has both gas and oil pores. “The gas is the easiest to get out of the rock, but we have to frack it hard enough to get the oil out of the rock,” Brda explained.

“The Cactus A35 #1H well targeted one of several prospective target zones within the Pennsylvanian Section, a different and deeper zone than the zone which was productive in the Founders A25 #1H,” explained Torchlight’s Geoscience Team lead, Mike Zebrowski. “The Cactus A35 # 1H was landed horizontally in the sweet spot and then geo-steered to stay within an optimal position for testing one of the oil zones to hydraulically fracture.”

In addition, Torchlight has identified about 20,000 acres of structure in addition to the unconventional acreage, and is now drilling the Founders A25 #2 well—it currently has drilled about one-third of the total 8,000 feet—and will test about six or seven conventional zones, along with the Barnett and Woodford unconventional zones.

“The Orogrande is a unique system much like the Midland Basin and the Delaware Basin in that there are multiple benches of pay and it’s our job to determine which ones are going to be best and which ones are going to be economic. We obviously are going to focus on the most economic pay zones, but we have to do the science to determine that,” Brda said.

“The Founders A25 #2 well will provide the opportunity to test deeper zones below the Penn Section which offer both Conventional and Unconventional opportunities,” Zebrowski explained. “Many wells east of the Torchlight acreage targeted the Helms and Barnett/Woodford sections and achieved hydrocarbon production using only small vertical fracs. These zones are proven for horizontal unconventional production in the Delaware Basin, Midland Basin, Ft. Worth Basin, and in Oklahoma. The Founders A25 #2 will allow Torchlight to evaluate these deeper unconventional zones within the Torchlight Acreage and offer considerable upside.”

The company expects to release information on that drilling by the end of November.

Torchlight has several other properties. At its Hazel property located in the Midland Basin, the company conducted a full core on the Flying B Ranch #4 well and had that analyzed by Schlumberger. “It looks really, really good through the Wolfcamp section, Brda stated. “We are contemplating how we are going to go horizontal in that section, whether we will drill it ourselves or find a partner. We will determine that in the next few months.”

The company also recently drilled a shallow well to maintain the lease; it needs to drill one well every six months.

In additional, Torchlight holds a 12.5% interest in the Winkler property in the Delaware Basin, which is held by production. The project is producing 200–300 barrels a day gross.

“We continue to have meaningful discussions with several large oil and gas peers regarding the potential of the Orogrande Project,” said Brda. “Feedback from technical teams has been overwhelmingly positive and complimentary regarding our operational accomplishments to date including the associated scientific data our team has assembled. The Merger, Acquisition and Divestiture market has been somewhat constricted this year precipitated by changes in commodity price, but we continue to pursue strong indications of interest and look forward to eventually moving the discussions from scientific to financial in nature. In the meantime, we will continue meeting drilling requirements and improving our asset profile. We will provide additional updates as developments are made both corporately and operationally.”

Torchlight has about 74 million shares outstanding.

Read what other experts are saying about:

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Disclosure:
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Torchlight Energy. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Torchlight Energy. Please click here for more information.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Torchlight Energy, a company mentioned in this article.

( Companies Mentioned: TRCH:NASDAQ,
)

Source: Streetwise Reports   11/18/2019

The company continues to prove up its holdings as it searches for a partner.

Torchlight Energy Resources Inc. (TRCH:NASDAQ) is actively looking for a suitor for its large—134,000 net acres—Orogrande Basin project in Texas and is further exploring it to gain more scientific data.

ROTH Capital Partners has Torchlight under coverage with a Buy rating and a target price of $1.56. The stock is currently trading at around $0.82.

Torchlight holds a 72.5% interest in the Orogrande project. The company has re-entered a well bore the previous owners of the lease originated and, with the Cactus A35 1H well, has now drilled horizontally into the Penn formation.

"Our last producing well there was actually a 1,000 foot horizontal well that produced a lot of gas, but should also produce oil if we frack it hard enough," Torchlight CEO John Brda told Streetwise Reports. "It's all looking very good. It's drilled and cased and ready for fracking, which we will do at the end of the month."

The Penn formation has a dual porosity system, which means it has both gas and oil pores. "The gas is the easiest to get out of the rock, but we have to frack it hard enough to get the oil out of the rock," Brda explained.

"The Cactus A35 #1H well targeted one of several prospective target zones within the Pennsylvanian Section, a different and deeper zone than the zone which was productive in the Founders A25 #1H," explained Torchlight's Geoscience Team lead, Mike Zebrowski. "The Cactus A35 # 1H was landed horizontally in the sweet spot and then geo-steered to stay within an optimal position for testing one of the oil zones to hydraulically fracture."

In addition, Torchlight has identified about 20,000 acres of structure in addition to the unconventional acreage, and is now drilling the Founders A25 #2 well—it currently has drilled about one-third of the total 8,000 feet—and will test about six or seven conventional zones, along with the Barnett and Woodford unconventional zones.

"The Orogrande is a unique system much like the Midland Basin and the Delaware Basin in that there are multiple benches of pay and it's our job to determine which ones are going to be best and which ones are going to be economic. We obviously are going to focus on the most economic pay zones, but we have to do the science to determine that," Brda said.

"The Founders A25 #2 well will provide the opportunity to test deeper zones below the Penn Section which offer both Conventional and Unconventional opportunities," Zebrowski explained. "Many wells east of the Torchlight acreage targeted the Helms and Barnett/Woodford sections and achieved hydrocarbon production using only small vertical fracs. These zones are proven for horizontal unconventional production in the Delaware Basin, Midland Basin, Ft. Worth Basin, and in Oklahoma. The Founders A25 #2 will allow Torchlight to evaluate these deeper unconventional zones within the Torchlight Acreage and offer considerable upside."

The company expects to release information on that drilling by the end of November.

Torchlight has several other properties. At its Hazel property located in the Midland Basin, the company conducted a full core on the Flying B Ranch #4 well and had that analyzed by Schlumberger. "It looks really, really good through the Wolfcamp section, Brda stated. "We are contemplating how we are going to go horizontal in that section, whether we will drill it ourselves or find a partner. We will determine that in the next few months."

The company also recently drilled a shallow well to maintain the lease; it needs to drill one well every six months.

In additional, Torchlight holds a 12.5% interest in the Winkler property in the Delaware Basin, which is held by production. The project is producing 200–300 barrels a day gross.

"We continue to have meaningful discussions with several large oil and gas peers regarding the potential of the Orogrande Project," said Brda. "Feedback from technical teams has been overwhelmingly positive and complimentary regarding our operational accomplishments to date including the associated scientific data our team has assembled. The Merger, Acquisition and Divestiture market has been somewhat constricted this year precipitated by changes in commodity price, but we continue to pursue strong indications of interest and look forward to eventually moving the discussions from scientific to financial in nature. In the meantime, we will continue meeting drilling requirements and improving our asset profile. We will provide additional updates as developments are made both corporately and operationally."

Torchlight has about 74 million shares outstanding.

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Disclosure:
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Torchlight Energy. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Torchlight Energy. Please click here for more information.
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Oil & Gas Company Increases Credit Term Facility to Fund Second Well

Source: Streetwise Reports   11/13/2019

The terms and the reason are presented in a Mackie Research Capital Corp. report.In a Nov. 1 research note, Mackie Research Capital Corp. analyst Bill Newman reported that Touchstone …

Source: Streetwise Reports   11/13/2019

The terms and the reason are presented in a Mackie Research Capital Corp. report.

In a Nov. 1 research note, Mackie Research Capital Corp. analyst Bill Newman reported that Touchstone Exploration Inc. (TXP:TSX; PBEGF:OTC.MKTS) increased its term credit facility to $20 million from $5 million to fund drilling of a second exploration well in the Republic of Trinidad and Tobago.

Under the terms, Touchstone will keep paying, on a quarterly basis, 8% per year interest. Also, it will begin paying the principal on Jan. 1, 2021, of $1.1 million per quarter with the full amount due by the facility's maturity date, Nov. 23, 2023.

Another change, Newman relayed, was an increase of the royalty payable on future production to 1.33% per from 1%, payable quarterly through Oct. 31, 2023.

Newman noted that Cascadura-1, the second of Touchstone's 'four exploration wells, is currently being drilled. Initial results are expected in mid-November as are production test results from Coho-1, the first well of the quartet. "If the Coho-1 well is successful, it has a relatively short tie-in distance of about 3.5 kilometers," added Newman.

Mackie has a Speculative Buy recommendation and a CA$0.50 target price on Touchstone. This reflects a 133% projected return as the company's current share price is around CA$0.22.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures from Mackie Research, Touchstone Exploration Inc., Update, November 1, 2019

RELEVANT DISCLOSURES APPLICABLE TO COMPANIES UNDER COVERAGE
Relevant disclosures required under Rule 3400 applicable to companies under coverage discussed in this research report are available on our web site at www.mackieresearch.com. 1. None Applicable for this Issuer

ANALYST CERTIFICATION
Each analyst of Mackie Research Capital Corporation whose name appears in this report hereby certifies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst's personal views and (ii) no part of the research analyst's compensation was or will be directly or indirectly related to the specific conclusions or recommendations expressed in this research report.

Mackie Research Capital Corporation, its directors, officers and other employees may, from time to time, have positions in the securities mentioned herein.

( Companies Mentioned: TXP:TSX; PBEGF:OTC.MKTS, )

Blue Sky Uranium Raises C$0.87M and Continues Exploration of Ivana Deposit; Newly Elected Argentine President Perceived as Positive for Mining

Source: The Critical Investor for Streetwise Reports   11/10/2019

The Critical Investor looks into the uranium explorer’s work in Argentina and the political situation in the country with the recent election of a new president.

1. Introduction

It has been a quiet year so far for Blue Sky Uranium Corp. (BSK:TSX.V; BKUCF:OTC), as the uranium oxide spot prices dropped off again after a run-up in H2 2018, rising almost 50%, only to pull back another 20% or so from these heights as can be seen at this chart, which can be found on the website of Cameco:

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Nonetheless, as one of the premier low cost development plays in the uranium space, Blue Sky managed to continue working on its Amarillo Grande project in the Rio Negro province in Argentina, and recently raised fresh cash. This time it managed to get C$0.87M from the markets, earlier in July it closed a C$0.68M private placement. This is impressive, as uranium sentiment is not positive, and investors are not sure what to think of the newly elected president Fernandez in Argentina. He isn’t all that bad according to various sources, more on this later.

As most exploration and drilling is very near surface, these new funds enable Blue Sky to continue working on its flagship Ivana project, which in turn could likely improve economics further. As a reminder, at a relatively (industry wide) low base case uranium oxide (U3O8) price of US$50/lb U3O8, the after-tax NPV8 is US$135.2 million and the IRR is 29.3%. These are very decent numbers as most competitors use US$60–65/lb U3O8 for their base cases. Initial capex is US$128.05 million, and the all-in sustaining costs (AISC) net of vanadium credits is US18.27/lb U3O8. This AISC is amongst the lowest in the industry. However, keep in mind that the entire project is not economic at this time as the long term (or also called contract) uranium oxide price is US$32/lb U3O8, as is any project worldwide except the ISR operations in Kazakhstan and Arrow of NexGen Energy, but it sits at the front of low cost projects and operations, and as such might be one of the uranium projects with the biggest leverage to the uranium price. Let’s have a look at the current state of affairs for Blue Sky Uranium.

All presented tables are my own material, unless stated otherwise.

All pictures are company material, unless stated otherwise.

All currencies are in US Dollars, unless stated otherwise.

2. Financings

As mentioned, the company recently closed a private placement (PP), to be precise on October 23. Blue Sky raised aggregate gross proceeds of $868,999.95 through the non-brokered private placement, by the issuance of 5,793,333 units at a subscription price of $0.15 per unit. Each unit consisted of one common share and one transferrable common share purchase warrant. Each warrant will entitle the holder thereof to purchase one additional common share at $0.25 per share for two years from the date of issue.

I always like a non-brokered PP, as in this case management didn’t have to use the brokers, which in turn not always mobilize the most committed shareholders. Usually management taps into its own group of personally known investors, which almost guarantees longer term holders, and no warrant flippers. The subscription price of C$0.15 is also a decent premium compared to the closing price of C$0.11 that day:

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Share price; 1 year time frame

I could say something about the full warrant as existing shareholders probably preferred to see a half warrant or no warrant at all, but we have to be realistic here; Blue Sky did well at such a premium at this subdued sentiment. At least the warrant period is limited to two years, but there was no accelerated expiry clause for the warrants, as we will see at the July private placement which comes up next. The proceeds of the financing will be used for exploration programs on the projects in Argentina and for general working capital. This financing is subject to regulatory approval, and keep in mind that there is a four month hold period expiring on February 23, 2020.

So far about the October financing, Blue Sky Uranium also did a raise in July as mentioned. In this, again, non-brokered private placement, 4,528,182 units at C$0.15 were issued in two tranches, and aggregate gross proceeds of $679,227 were received by the company. Each unit consisted of one common share and again one full warrant. Each warrant will entitle the holder thereof to purchase one additional common share at $0.25 per share for three years from the date of issue. So far this is in line with the latest financing, although the exercise period is one year longer which is good.

Another addition neutralizing this is the accelerated expiry of the warrants. If the volume weighted average price for the company’s shares is $0.50 or greater for a period of five consecutive trading days, then the company may deliver a notice to the warrant holder that the warrants must be exercised within twenty days from the date of delivery of such notice, otherwise the warrants will expire at 4:30 p.m. (Vancouver time) on the twenty-first day after the date of delivery of the notice.

As can be seen in the price chart above, this round was done at no premium, full warrant, three year warrant exercise period combined with an accelerated expiry at C$0.50. I am not a fan of accelerated expiries, especially in juniors and even more especially in uranium juniors, as the upside potential is truly explosive as we have seen during other spikes in the uranium price, and this is the reason most investors are willing to invest in uranium in the first place in my view. Notwithstanding this, Blue Sky did well to raise this in a very difficult market at no discount, so it could continue with its exploration program for 2019, consisting of IP surveys and auger drilling. Blue Sky expects to have sufficient funds to last well into Q2 2020, but expects to raise more in order to fund RC drilling in 2020. But before I delve into exploration, let’s rehash developments for uranium itself.

3. Uranium

I’m not going to repeat the entire paragraph from my first article on Blue Sky Uranium, but will mention and update the most important items. Consensus is nowadays, that necessary pricing to bring a lot of Western production online could involve US$50/lb U3O8 levels, and maybe even higher, for various reasons. It is rumored by experts that for example Cameco’s McArthur River mine, the largest and highest grade single deposit uranium mine in the world, needs a complex, difficult and expensive expansion to mine the next phase, and this is only economic at US$50/lb. It is even suggested that it would be cheaper to buy and build Arrow, the Tier I deposit of NexGen Energy, and this seems valid on the longer term as Arrow appears to be much more profitable than McArthur River or Key Lake at the moment. But of course, as a development project with long permitting periods as a uranium mine, it can’t be switched on just like that. In the meantime, Cameco fulfills its delivery duties by buying in the spot market, buying which could reach as much as 20 million pounds U3O8 this year.

It is not the only one doing this, as for example traders, banks and hedge funds are buying uranium oxides left and right in order to speculate on future price increases. A new fund, Yellow Cake PLC, has an offtake agreement in place with KazAtomProm, which accounted for the buying of 8.1M lb U3O8 at the discounted price of US$21.01/lb U3O8 in 2018, and gives Yellow Cake the possibility, not the obligation, to buy large quantities for the next nine years, to the tune of US$100 million each year.

Prices of uranium are always, just like gold, subject of widespread sentiments and not the result of a healthy supply/demand mechanism, although the uranium markets are well known by the number of utilities (the nuclear power plants) in production, under construction, etc. Something that isn’t very well understood, however, but obviously key to demand, is the stockpiling by utilities, usually by fulfilling their long term contracts, like the Japanese appeared to be doing during the shutdown since 2011. Because of this, for a while the markets expected a huge stockpile to come on the market sooner or later, when it would be clear Japan would dismantle its nuclear reactors. This development didn’t pan out as we know now, and it is expected that Japanese utilities will enter the LT markets in a few years after they restarted. It is also expected that not all Japanese reactors will be restarted, so in my view there should be a lots and lots of Japanese stockpiles available for restarting utilities.

It is widely agreed upon that the growing net number of reactors will eventually generate increased demand, which would in turn create shortages based on current supply levels. However, this can take a few years to materialize.

Uranium oxide supply isn’t switched on in a short period of time, and an increase in demand by utilities can’t be met by the mining industry in time, and this is the catalyst all uranium investors are waiting for. It will probably take at least one year to have McArthur River and Rabbit Lake back online again, and the same or even longer goes for existing or new ISR operations of KazAtomProm. It recently said it could add 7M lb U3O8 of production annually by investing US$100 million many times over, but ISR is slow to ramp up, it takes about 18 months after the wells are in place. On a side note, it remains to be seen if these companies really can ramp up efficiently in this time frame, as we have seen that for example existing and producing lithium assets are ramping up to higher production rates much slower than anticipated. Whether this has technical reasons, pricing reasons or else remains to be seen, but I can’t rule out such developments with uranium either.

Besides this, there is spare capacity waiting in Australia (Olympic Dam [BHP], which will likely be expanded as soon as uranium contract prices improve meaningfully, and the Honeymoon Mine [Uranium One], which was closed in 2013 due to low prices, will be reopened again in that case) and possibly Kazakhstan, currently globally the largest producer. In Namibia there is the Langer Heinrich (Paladin Energy) mine waiting for better times, but it will be clear that new production capacity will take a lot of time. Besides this, the Chinese-owned Husab Mine is coming online this year.

But all these mines and projects have one thing in common: it takes time, to the tune of 1.5–2 years, before nameplate production is reached. And when the spot market has dried up because of all the buying by Cameco, etc., and utilities start buying, there is no time. Much has been made of the potential sale of current stockpiles of utilities, but most of these stockpiles are government owned and will not go back to the markets again. On an important side note: the ramping up production of Kazakhstan since 2005 at very cheap prices has effectively put most U.S. producers out of business. A large part of this Kazakh production went to China, which has massive stockpiles, accounting for more than half of total stockpiles worldwide.

According to the World Nuclear Association, global demand is expected to rise to 180M lb U3O8 in 2025, supply will be an estimated 140M lb U3O8 at the time, including restarted McArthur River, Key Lake and Kazatomprom mines. Six years is a long time of course, in the meantime the industry had to deal with another issue, the Section 232 Petition. The well-known proposal by Ur-Energy and Energy Fuels involving a 25% quota on domestic uranium was shot down by the U.S. government. President Trump denied his Secretary of Commerce the possibility of going forward with the proposal, as he seemed to deem current developments as too insignificant to take action:

“Currently, the country imports about 93% of its commercial uranium, compared to 85.8% in 2009,” Trump wrote. “The Secretary found that this figure is because of increased production by foreign state-owned enterprises, which have distorted global prices and made it more difficult for domestic mines to compete.

“At this time, I do not concur with the Secretary’s finding that uranium imports threaten to impair the national security of the United States as defined under section 232 of the Act. Although I agree that the Secretary’s findings raise significant concerns regarding the impact of uranium imports on the national security with respect to domestic mining, I find that a fuller analysis of national security considerations with respect to the entire nuclear fuel supply chain is necessary at this time.”

This outcome was more or less expected, as opposed to the miners supporting the proposal stood the very powerful utilities sector, which didn’t like potentially higher uranium prices as a result of eventual quota. But I must say, to see the proposal making it all the way to the Secretary of Commerce, putting it on the desk of Trump, was impressive in itself as I didn’t see much viability in it. Canada and Australia account for almost 60% of U.S. uranium supply, and Kazakhstan delivers another 11%, so I don’t see a large dependence on countries like China or Russia. I had to revise my views on the position of Kazakhstan, which I viewed as relatively independent of Russia, because of being a NATO partner country

This might be true in a direct way, but indirectly the Kazatomprom facilities were built by Russia and served the Russian nuclear program for decades, and Russia still has enormous financial/business influence in the country with large investments, so although the Kazakh president might not be the best friend of Putin, I don’t expect him to act independently from Russia in this regard. Therefore, all actions by Kazatomprom must be seen in this light, and I believe now that they will do everything to gain world dominance in uranium production. They might have used the Chinese rare earth strategy, the parallels are remarkable.

What is the situation in Argentina these days regarding nuclear energy?

Argentina has three nuclear reactors generating about 5% of its electricity. Its current annual consumption is approximately 300 tonnes U3O8 (or 660,000 lb U3O8). The country’s first commercial nuclear power reactor began operating in 1974 and collectively the three plants produce 1667 MWe. The current reactors include a CANDU 6 and a Siemens design; the next two planned reactors are to be built by China National Nuclear Corporation. Additionally, five research reactors are operated by the National Commission of Atomic Energy (CNEA) and others.

Two further research reactors are under construction. The CAREM-25 nuclear reactor, which has been developed by CNEA with INVAP and others, since 1984, is a modular 100 MWt simplified pressurized water reactor designed to be used for electricity generation (27 MWe gross, 25 MWe net) or as a research reactor or for water desalination. The prototype will be followed by a larger version, possibly 200 MWe with potential to upscale to 300 MWe. Sites in Argentina and internationally are being considered for the CAREM-25. Argentina requires 100% importation of its uranium supply. As shown in Figure 19-1 below, sourced from the Mining and Energy Industry of Argentina, the 2015 price paid for uranium was more than double the international market price for uranium.

It doesn’t look like this situation will be solved anytime soon in Argentina, and provides an excellent environment for Blue Sky and the Grosso Group to negotiate with the government on long term contracts. Talking about Argentina, let’s have a quick look at the result of the elections.

4. New President for Argentina

On October 27, left wing politician Alberto Fernandez was elected as president of Argentina, and right beside him stood the one and only Christina Fernandez de Kirchner, coming in as the new vice president of the country. Foreign capital can’t be too happy about this development, and as anticipated, a turn in the federal government is almost certainly after the pro-business course of current and outgoing president Macri. The only problem for Macri was that he couldn’t turn around the economy of Argentina, and actually aggravated the situation.

This upcoming political change has already represented uncertainties for the Argentine economy and the Argentine peso has suffered a significant depreciation in the last two months, and it may continue for a while until new government is established. This kind of uncertainty however also represents a reduction in costs due to the depreciation, as long as this depreciation outscores inflation. This reduction could also compensate the anticipated increase in country risk to a certain degree. Nobody is waiting for another YPF nationalization debacle as Kirchner pulled off in 2012, but not all is lost as it is anticipated that Fernandez is more moderate.

According to this Mining.com article, during his campaign, Fernandez met with representatives from 24 mining companies with projects in the country and told them he considered mining an opportunity, rather than a problem. He also promised to revisit the country’s controversial glacier protection law, and said that his technical team, led by economist Guillermo Nielsen, is working on a regime to guarantee clear rules for 10 years within the natural resources sector. A large pipeline of projects is waiting for development, to the tune of US$29 billion. Fernandez seems to have developed an economic agenda which includes a 10 year growth plan for the mining industry, led by the lithium sector. This is somewhat of a surprise to me as lithium is very speculative and the relevant lithium projects aren’t anywhere close to a large part of this US$29 billion pipeline, but who knows.

Other articles (in Spanish) tuned in on how Fernandez recognizes the importance of mining and its exports, but also mentioning for example the province of San Juan as a guiding example, as this province always looked after the interests of local communities surrounding mining projects. Furthermore, Fernandez is looking to initiate a Minister of Mines as he sees mining as key in revitalizing the economy, a position to be filled by the current Minister of Mining at San Juan Province, Alberto Hensel.

Other plans to stimulate exports by mining are series of tax breaks and other fiscal stimuli, as Hensel did when he was in charge as provincial minister. Hensel also acknowledged that Argentina changed mining regulations and fiscal regimes far too often, resulting in foreign capital fleeing the country. He wants to change this. So it seems although Peronist and protectionist by nature, the new government seems to understand they have to do things differently this time, very different. Let’s wait and see.

At provincial level, the Governor of Rio Negro was already elected few months ago and the actual governing party will continue for another four years. Therefore, the provincial supports to the sector is not expected to be modified. In fact, elected Governor has strongly mentioned the support to non-conventional O&G production and mining development.

On a closing note for politics before I switch to an update of exploration programs: Blue Sky Uranium also has numerous projects in the Chubut province. Situated directly south of Rio Negro, Chubut hosts several uranium deposits; however, none are currently in production and the provincial government has enacted restrictions against open-pit mining. The company’s projects in this area, Sierra Colonia, Tierras Coloradas, Regalo and Cerro Parva, comprising more than 150,000 hectares of 100% controlled mining properties, are shelved now because of this. Chubut is known as one of two anti-mining provinces that didn’t sign the new Macri normalization policy, which aimed at having a universal mining policy for every province in Argentina. Chances are that the new government can make changes in this regard.

5. Exploration Programs

The exploration program continues on past recognized exploration targets located along a 25km-long corridor northwards of Ivana deposit, named Ivana North and Ivana Central, in order to increase the existing Inferred resource of 22.7M lbs U3O8 as much as possible:

The strategy includes expansion of the known resources at Ivana deposit, and find more deposits near surface similar to Ivana deposit following the geological regional 145km trap, or redox front, where examples worldwide (as at Kazakhstan) composed of several deposits (4 of the top 10 mines are at the same district in Kazakhstan, and Cameco estimated the regional resource potential in 250 Mlb @ 500ppm U3O8). The exploration efforts were focused at Ivana Central until now, and included auger drilling and IP-survey. This target was developed based on re-assessment of the diamond drill cores drilled back in 2013 in JV with Areva. This assessment identified geological and geochemical signatures indicating the potential presence of multiple blind mineralized horizons similar to the primary mineralization at Ivana deposit, where the shallower horizon is potentially located at 30m in depth. According to management, the aim of the auger drilling is to catch subtle radiometric or geochemical anomalies confirming the presence of a blind system and its potential location. Initial auger holes helped, combined with previous exploration results, to locate a 6km-long IP testing survey, designed to detect the presence of pyrite or organic matter that may be interpreted as the trap for uranium, carried by oxidized waters in the past and generated an accumulative economic deposit. The original test was extended to 7.65km:

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As a result, the IP detected two chargeability anomalies (pyrite and organic matter are chargeable), one to the west that may be interpreted as the expected horizon at 30m in depth, and another to the east located deeper probably at 40–50m from surface. Both anomalies are open, and new IP-survey lines are expected to be completed in November.

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The Ivana North area was first recognized back in 2010 as results of the airborne radiometric survey and follow up exploration prospecting. The initial sampling works done at Ivana North had already detected the presence of uranium/vanadium mineralization similar to the mineralization later recognized where the Ivana deposit is located today, at 20km to the south. The target area covering 10x6km radiometric and follow up sampling anomalies is planned to be covered by geophysics and auger drilling in order to adjust later RC drilling program. The works in this area are expected to be launched in the next weeks with the first IP-testing survey line followed by auger drilling.

Once completed both programs, the company expects to launch a 4,500m RC drilling program in different phases at both targets. This program is expected to be initiated at the beginning of 2020, and the company is looking to raise more money to fund it, more or less following the budget estimates in the latest resource report:

The goal is to demonstrate that Blue Sky could actually control an entire uranium/vanadium district, with potential to comprise multiple deposits with significant upside potential for tonnage and economics.

As a reminder, if Blue Sky Uranium indeed manages to delineate an estimated 100M lb U3O8 and a useful amount of V2O5, it isn’t unrealistic in that case to double or even triple production capacity and double LOM. In this case some economies of scale could kick in, and despite the expected lower average grade and increased capex, the post-tax NPV8 should be able to come in at least around US$300–350M, with the IRR roughly estimated at 27–28% as well, maybe higher depending on the amount of higher grade ore they could delineate in the future. The company is proceeding with the expansion of the current resource and setting up work programs for the upcoming Pre Feasibility Study (PFS), and for this it is not allowed to include Inferred resources, so the entire resource needs to be converted first. Fortunately, the continuity of mineralization seems to be excellent according to management. Actual spacing of the drilling pattern allows to convert most of the resources into indicated resources. They were not converted yet by the QP because the metallurgical results were received after the resource estimation. The budget presented above includes the drilling costs to convert all actual resources into indicated (4000m).

6. Conclusion

Blue Sky Uranium managed to raise another C$0.87 million after raising C$0.68 million back in July, which is impressive in a subdued market for uranium, and mining in general except gold producers. It enabled the company to proceed with IP surveys and auger drilling, defining drill targets for a new RC drill campaign early next year. At the same time, Alberto Fernandez was elected as the new president for Argentina, and fortunately, despite his left wing Peron style protectionist/socialist background, he seems to be quite pro-mining. He not only recognized the importance and potential of the mining industry for revitalizing the economy, but is also planning on having a new Ministry of Mines, for which his Prime Minister candidate already has proven plans based on fiscal stimulation in mind. So although Kirchner is back as a vice president this time, it seems Fernandez is much more realistic with regard to mining than Macri and Kirchner combined. Very surprising. Let’s hope it all pans out well for Blue Sky Uranium.

I hope you will find this article interesting and useful, and will have further interest in my upcoming articles on mining. To never miss a thing, please subscribe to my free newsletter on my website http://www.criticalinvestor.eu to get an email notice of my new articles soon after they are published.

The Critical Investor is a newsletter and comprehensive junior mining platform, providing analysis, blog and newsfeed and all sorts of information about junior mining. The editor is an avid and critical junior mining stock investor from The Netherlands, with an MSc background in construction/project management. Number cruncher at project economics, looking for high quality companies, mostly growth/turnaround/catalyst-driven to avoid too much dependence/influence of long-term commodity pricing/market sentiments, and often looking for long-term deep value. Getting burned in the past himself at junior mining investments by following overly positive sources that more often than not avoided to mention (hidden) risks or critical flaws, The Critical Investor learned his lesson well, and goes a few steps further ever since, providing a fresh, more in-depth, and critical vision on things, hence the name.

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Disclaimer:

The author is not a registered investment advisor, and has a long position in this stock. Blue Sky Uranium is a sponsoring company. All facts are to be checked by the reader. For more information go to www.blueskyuranium.com and read the company’s profile and official documents on www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.

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2) The following companies mentioned in the article are sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
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4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Charts and graphics provided by the author.

( Companies Mentioned: BSK:TSX.V; BKUCF:OTC,
)

Source: The Critical Investor for Streetwise Reports   11/10/2019

The Critical Investor looks into the uranium explorer's work in Argentina and the political situation in the country with the recent election of a new president.

1. Introduction

It has been a quiet year so far for Blue Sky Uranium Corp. (BSK:TSX.V; BKUCF:OTC), as the uranium oxide spot prices dropped off again after a run-up in H2 2018, rising almost 50%, only to pull back another 20% or so from these heights as can be seen at this chart, which can be found on the website of Cameco:

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Nonetheless, as one of the premier low cost development plays in the uranium space, Blue Sky managed to continue working on its Amarillo Grande project in the Rio Negro province in Argentina, and recently raised fresh cash. This time it managed to get C$0.87M from the markets, earlier in July it closed a C$0.68M private placement. This is impressive, as uranium sentiment is not positive, and investors are not sure what to think of the newly elected president Fernandez in Argentina. He isn't all that bad according to various sources, more on this later.

As most exploration and drilling is very near surface, these new funds enable Blue Sky to continue working on its flagship Ivana project, which in turn could likely improve economics further. As a reminder, at a relatively (industry wide) low base case uranium oxide (U3O8) price of US$50/lb U3O8, the after-tax NPV8 is US$135.2 million and the IRR is 29.3%. These are very decent numbers as most competitors use US$60–65/lb U3O8 for their base cases. Initial capex is US$128.05 million, and the all-in sustaining costs (AISC) net of vanadium credits is US18.27/lb U3O8. This AISC is amongst the lowest in the industry. However, keep in mind that the entire project is not economic at this time as the long term (or also called contract) uranium oxide price is US$32/lb U3O8, as is any project worldwide except the ISR operations in Kazakhstan and Arrow of NexGen Energy, but it sits at the front of low cost projects and operations, and as such might be one of the uranium projects with the biggest leverage to the uranium price. Let's have a look at the current state of affairs for Blue Sky Uranium.

All presented tables are my own material, unless stated otherwise.

All pictures are company material, unless stated otherwise.

All currencies are in US Dollars, unless stated otherwise.

2. Financings

As mentioned, the company recently closed a private placement (PP), to be precise on October 23. Blue Sky raised aggregate gross proceeds of $868,999.95 through the non-brokered private placement, by the issuance of 5,793,333 units at a subscription price of $0.15 per unit. Each unit consisted of one common share and one transferrable common share purchase warrant. Each warrant will entitle the holder thereof to purchase one additional common share at $0.25 per share for two years from the date of issue.

I always like a non-brokered PP, as in this case management didn't have to use the brokers, which in turn not always mobilize the most committed shareholders. Usually management taps into its own group of personally known investors, which almost guarantees longer term holders, and no warrant flippers. The subscription price of C$0.15 is also a decent premium compared to the closing price of C$0.11 that day:

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Share price; 1 year time frame

I could say something about the full warrant as existing shareholders probably preferred to see a half warrant or no warrant at all, but we have to be realistic here; Blue Sky did well at such a premium at this subdued sentiment. At least the warrant period is limited to two years, but there was no accelerated expiry clause for the warrants, as we will see at the July private placement which comes up next. The proceeds of the financing will be used for exploration programs on the projects in Argentina and for general working capital. This financing is subject to regulatory approval, and keep in mind that there is a four month hold period expiring on February 23, 2020.

So far about the October financing, Blue Sky Uranium also did a raise in July as mentioned. In this, again, non-brokered private placement, 4,528,182 units at C$0.15 were issued in two tranches, and aggregate gross proceeds of $679,227 were received by the company. Each unit consisted of one common share and again one full warrant. Each warrant will entitle the holder thereof to purchase one additional common share at $0.25 per share for three years from the date of issue. So far this is in line with the latest financing, although the exercise period is one year longer which is good.

Another addition neutralizing this is the accelerated expiry of the warrants. If the volume weighted average price for the company's shares is $0.50 or greater for a period of five consecutive trading days, then the company may deliver a notice to the warrant holder that the warrants must be exercised within twenty days from the date of delivery of such notice, otherwise the warrants will expire at 4:30 p.m. (Vancouver time) on the twenty-first day after the date of delivery of the notice.

As can be seen in the price chart above, this round was done at no premium, full warrant, three year warrant exercise period combined with an accelerated expiry at C$0.50. I am not a fan of accelerated expiries, especially in juniors and even more especially in uranium juniors, as the upside potential is truly explosive as we have seen during other spikes in the uranium price, and this is the reason most investors are willing to invest in uranium in the first place in my view. Notwithstanding this, Blue Sky did well to raise this in a very difficult market at no discount, so it could continue with its exploration program for 2019, consisting of IP surveys and auger drilling. Blue Sky expects to have sufficient funds to last well into Q2 2020, but expects to raise more in order to fund RC drilling in 2020. But before I delve into exploration, let's rehash developments for uranium itself.

3. Uranium

I'm not going to repeat the entire paragraph from my first article on Blue Sky Uranium, but will mention and update the most important items. Consensus is nowadays, that necessary pricing to bring a lot of Western production online could involve US$50/lb U3O8 levels, and maybe even higher, for various reasons. It is rumored by experts that for example Cameco's McArthur River mine, the largest and highest grade single deposit uranium mine in the world, needs a complex, difficult and expensive expansion to mine the next phase, and this is only economic at US$50/lb. It is even suggested that it would be cheaper to buy and build Arrow, the Tier I deposit of NexGen Energy, and this seems valid on the longer term as Arrow appears to be much more profitable than McArthur River or Key Lake at the moment. But of course, as a development project with long permitting periods as a uranium mine, it can't be switched on just like that. In the meantime, Cameco fulfills its delivery duties by buying in the spot market, buying which could reach as much as 20 million pounds U3O8 this year.

It is not the only one doing this, as for example traders, banks and hedge funds are buying uranium oxides left and right in order to speculate on future price increases. A new fund, Yellow Cake PLC, has an offtake agreement in place with KazAtomProm, which accounted for the buying of 8.1M lb U3O8 at the discounted price of US$21.01/lb U3O8 in 2018, and gives Yellow Cake the possibility, not the obligation, to buy large quantities for the next nine years, to the tune of US$100 million each year.

Prices of uranium are always, just like gold, subject of widespread sentiments and not the result of a healthy supply/demand mechanism, although the uranium markets are well known by the number of utilities (the nuclear power plants) in production, under construction, etc. Something that isn't very well understood, however, but obviously key to demand, is the stockpiling by utilities, usually by fulfilling their long term contracts, like the Japanese appeared to be doing during the shutdown since 2011. Because of this, for a while the markets expected a huge stockpile to come on the market sooner or later, when it would be clear Japan would dismantle its nuclear reactors. This development didn't pan out as we know now, and it is expected that Japanese utilities will enter the LT markets in a few years after they restarted. It is also expected that not all Japanese reactors will be restarted, so in my view there should be a lots and lots of Japanese stockpiles available for restarting utilities.

It is widely agreed upon that the growing net number of reactors will eventually generate increased demand, which would in turn create shortages based on current supply levels. However, this can take a few years to materialize.

Uranium oxide supply isn't switched on in a short period of time, and an increase in demand by utilities can't be met by the mining industry in time, and this is the catalyst all uranium investors are waiting for. It will probably take at least one year to have McArthur River and Rabbit Lake back online again, and the same or even longer goes for existing or new ISR operations of KazAtomProm. It recently said it could add 7M lb U3O8 of production annually by investing US$100 million many times over, but ISR is slow to ramp up, it takes about 18 months after the wells are in place. On a side note, it remains to be seen if these companies really can ramp up efficiently in this time frame, as we have seen that for example existing and producing lithium assets are ramping up to higher production rates much slower than anticipated. Whether this has technical reasons, pricing reasons or else remains to be seen, but I can't rule out such developments with uranium either.

Besides this, there is spare capacity waiting in Australia (Olympic Dam [BHP], which will likely be expanded as soon as uranium contract prices improve meaningfully, and the Honeymoon Mine [Uranium One], which was closed in 2013 due to low prices, will be reopened again in that case) and possibly Kazakhstan, currently globally the largest producer. In Namibia there is the Langer Heinrich (Paladin Energy) mine waiting for better times, but it will be clear that new production capacity will take a lot of time. Besides this, the Chinese-owned Husab Mine is coming online this year.

But all these mines and projects have one thing in common: it takes time, to the tune of 1.5–2 years, before nameplate production is reached. And when the spot market has dried up because of all the buying by Cameco, etc., and utilities start buying, there is no time. Much has been made of the potential sale of current stockpiles of utilities, but most of these stockpiles are government owned and will not go back to the markets again. On an important side note: the ramping up production of Kazakhstan since 2005 at very cheap prices has effectively put most U.S. producers out of business. A large part of this Kazakh production went to China, which has massive stockpiles, accounting for more than half of total stockpiles worldwide.

According to the World Nuclear Association, global demand is expected to rise to 180M lb U3O8 in 2025, supply will be an estimated 140M lb U3O8 at the time, including restarted McArthur River, Key Lake and Kazatomprom mines. Six years is a long time of course, in the meantime the industry had to deal with another issue, the Section 232 Petition. The well-known proposal by Ur-Energy and Energy Fuels involving a 25% quota on domestic uranium was shot down by the U.S. government. President Trump denied his Secretary of Commerce the possibility of going forward with the proposal, as he seemed to deem current developments as too insignificant to take action:

"Currently, the country imports about 93% of its commercial uranium, compared to 85.8% in 2009," Trump wrote. "The Secretary found that this figure is because of increased production by foreign state-owned enterprises, which have distorted global prices and made it more difficult for domestic mines to compete.

"At this time, I do not concur with the Secretary's finding that uranium imports threaten to impair the national security of the United States as defined under section 232 of the Act. Although I agree that the Secretary's findings raise significant concerns regarding the impact of uranium imports on the national security with respect to domestic mining, I find that a fuller analysis of national security considerations with respect to the entire nuclear fuel supply chain is necessary at this time."

This outcome was more or less expected, as opposed to the miners supporting the proposal stood the very powerful utilities sector, which didn't like potentially higher uranium prices as a result of eventual quota. But I must say, to see the proposal making it all the way to the Secretary of Commerce, putting it on the desk of Trump, was impressive in itself as I didn't see much viability in it. Canada and Australia account for almost 60% of U.S. uranium supply, and Kazakhstan delivers another 11%, so I don't see a large dependence on countries like China or Russia. I had to revise my views on the position of Kazakhstan, which I viewed as relatively independent of Russia, because of being a NATO partner country

This might be true in a direct way, but indirectly the Kazatomprom facilities were built by Russia and served the Russian nuclear program for decades, and Russia still has enormous financial/business influence in the country with large investments, so although the Kazakh president might not be the best friend of Putin, I don't expect him to act independently from Russia in this regard. Therefore, all actions by Kazatomprom must be seen in this light, and I believe now that they will do everything to gain world dominance in uranium production. They might have used the Chinese rare earth strategy, the parallels are remarkable.

What is the situation in Argentina these days regarding nuclear energy?

Argentina has three nuclear reactors generating about 5% of its electricity. Its current annual consumption is approximately 300 tonnes U3O8 (or 660,000 lb U3O8). The country's first commercial nuclear power reactor began operating in 1974 and collectively the three plants produce 1667 MWe. The current reactors include a CANDU 6 and a Siemens design; the next two planned reactors are to be built by China National Nuclear Corporation. Additionally, five research reactors are operated by the National Commission of Atomic Energy (CNEA) and others.

Two further research reactors are under construction. The CAREM-25 nuclear reactor, which has been developed by CNEA with INVAP and others, since 1984, is a modular 100 MWt simplified pressurized water reactor designed to be used for electricity generation (27 MWe gross, 25 MWe net) or as a research reactor or for water desalination. The prototype will be followed by a larger version, possibly 200 MWe with potential to upscale to 300 MWe. Sites in Argentina and internationally are being considered for the CAREM-25. Argentina requires 100% importation of its uranium supply. As shown in Figure 19-1 below, sourced from the Mining and Energy Industry of Argentina, the 2015 price paid for uranium was more than double the international market price for uranium.

It doesn't look like this situation will be solved anytime soon in Argentina, and provides an excellent environment for Blue Sky and the Grosso Group to negotiate with the government on long term contracts. Talking about Argentina, let's have a quick look at the result of the elections.

4. New President for Argentina

On October 27, left wing politician Alberto Fernandez was elected as president of Argentina, and right beside him stood the one and only Christina Fernandez de Kirchner, coming in as the new vice president of the country. Foreign capital can't be too happy about this development, and as anticipated, a turn in the federal government is almost certainly after the pro-business course of current and outgoing president Macri. The only problem for Macri was that he couldn't turn around the economy of Argentina, and actually aggravated the situation.

This upcoming political change has already represented uncertainties for the Argentine economy and the Argentine peso has suffered a significant depreciation in the last two months, and it may continue for a while until new government is established. This kind of uncertainty however also represents a reduction in costs due to the depreciation, as long as this depreciation outscores inflation. This reduction could also compensate the anticipated increase in country risk to a certain degree. Nobody is waiting for another YPF nationalization debacle as Kirchner pulled off in 2012, but not all is lost as it is anticipated that Fernandez is more moderate.

According to this Mining.com article, during his campaign, Fernandez met with representatives from 24 mining companies with projects in the country and told them he considered mining an opportunity, rather than a problem. He also promised to revisit the country's controversial glacier protection law, and said that his technical team, led by economist Guillermo Nielsen, is working on a regime to guarantee clear rules for 10 years within the natural resources sector. A large pipeline of projects is waiting for development, to the tune of US$29 billion. Fernandez seems to have developed an economic agenda which includes a 10 year growth plan for the mining industry, led by the lithium sector. This is somewhat of a surprise to me as lithium is very speculative and the relevant lithium projects aren't anywhere close to a large part of this US$29 billion pipeline, but who knows.

Other articles (in Spanish) tuned in on how Fernandez recognizes the importance of mining and its exports, but also mentioning for example the province of San Juan as a guiding example, as this province always looked after the interests of local communities surrounding mining projects. Furthermore, Fernandez is looking to initiate a Minister of Mines as he sees mining as key in revitalizing the economy, a position to be filled by the current Minister of Mining at San Juan Province, Alberto Hensel.

Other plans to stimulate exports by mining are series of tax breaks and other fiscal stimuli, as Hensel did when he was in charge as provincial minister. Hensel also acknowledged that Argentina changed mining regulations and fiscal regimes far too often, resulting in foreign capital fleeing the country. He wants to change this. So it seems although Peronist and protectionist by nature, the new government seems to understand they have to do things differently this time, very different. Let's wait and see.

At provincial level, the Governor of Rio Negro was already elected few months ago and the actual governing party will continue for another four years. Therefore, the provincial supports to the sector is not expected to be modified. In fact, elected Governor has strongly mentioned the support to non-conventional O&G production and mining development.

On a closing note for politics before I switch to an update of exploration programs: Blue Sky Uranium also has numerous projects in the Chubut province. Situated directly south of Rio Negro, Chubut hosts several uranium deposits; however, none are currently in production and the provincial government has enacted restrictions against open-pit mining. The company's projects in this area, Sierra Colonia, Tierras Coloradas, Regalo and Cerro Parva, comprising more than 150,000 hectares of 100% controlled mining properties, are shelved now because of this. Chubut is known as one of two anti-mining provinces that didn't sign the new Macri normalization policy, which aimed at having a universal mining policy for every province in Argentina. Chances are that the new government can make changes in this regard.

5. Exploration Programs

The exploration program continues on past recognized exploration targets located along a 25km-long corridor northwards of Ivana deposit, named Ivana North and Ivana Central, in order to increase the existing Inferred resource of 22.7M lbs U3O8 as much as possible:

The strategy includes expansion of the known resources at Ivana deposit, and find more deposits near surface similar to Ivana deposit following the geological regional 145km trap, or redox front, where examples worldwide (as at Kazakhstan) composed of several deposits (4 of the top 10 mines are at the same district in Kazakhstan, and Cameco estimated the regional resource potential in 250 Mlb @ 500ppm U3O8). The exploration efforts were focused at Ivana Central until now, and included auger drilling and IP-survey. This target was developed based on re-assessment of the diamond drill cores drilled back in 2013 in JV with Areva. This assessment identified geological and geochemical signatures indicating the potential presence of multiple blind mineralized horizons similar to the primary mineralization at Ivana deposit, where the shallower horizon is potentially located at 30m in depth. According to management, the aim of the auger drilling is to catch subtle radiometric or geochemical anomalies confirming the presence of a blind system and its potential location. Initial auger holes helped, combined with previous exploration results, to locate a 6km-long IP testing survey, designed to detect the presence of pyrite or organic matter that may be interpreted as the trap for uranium, carried by oxidized waters in the past and generated an accumulative economic deposit. The original test was extended to 7.65km:

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As a result, the IP detected two chargeability anomalies (pyrite and organic matter are chargeable), one to the west that may be interpreted as the expected horizon at 30m in depth, and another to the east located deeper probably at 40–50m from surface. Both anomalies are open, and new IP-survey lines are expected to be completed in November.

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The Ivana North area was first recognized back in 2010 as results of the airborne radiometric survey and follow up exploration prospecting. The initial sampling works done at Ivana North had already detected the presence of uranium/vanadium mineralization similar to the mineralization later recognized where the Ivana deposit is located today, at 20km to the south. The target area covering 10x6km radiometric and follow up sampling anomalies is planned to be covered by geophysics and auger drilling in order to adjust later RC drilling program. The works in this area are expected to be launched in the next weeks with the first IP-testing survey line followed by auger drilling.

Once completed both programs, the company expects to launch a 4,500m RC drilling program in different phases at both targets. This program is expected to be initiated at the beginning of 2020, and the company is looking to raise more money to fund it, more or less following the budget estimates in the latest resource report:

The goal is to demonstrate that Blue Sky could actually control an entire uranium/vanadium district, with potential to comprise multiple deposits with significant upside potential for tonnage and economics.

As a reminder, if Blue Sky Uranium indeed manages to delineate an estimated 100M lb U3O8 and a useful amount of V2O5, it isn't unrealistic in that case to double or even triple production capacity and double LOM. In this case some economies of scale could kick in, and despite the expected lower average grade and increased capex, the post-tax NPV8 should be able to come in at least around US$300–350M, with the IRR roughly estimated at 27–28% as well, maybe higher depending on the amount of higher grade ore they could delineate in the future. The company is proceeding with the expansion of the current resource and setting up work programs for the upcoming Pre Feasibility Study (PFS), and for this it is not allowed to include Inferred resources, so the entire resource needs to be converted first. Fortunately, the continuity of mineralization seems to be excellent according to management. Actual spacing of the drilling pattern allows to convert most of the resources into indicated resources. They were not converted yet by the QP because the metallurgical results were received after the resource estimation. The budget presented above includes the drilling costs to convert all actual resources into indicated (4000m).

6. Conclusion

Blue Sky Uranium managed to raise another C$0.87 million after raising C$0.68 million back in July, which is impressive in a subdued market for uranium, and mining in general except gold producers. It enabled the company to proceed with IP surveys and auger drilling, defining drill targets for a new RC drill campaign early next year. At the same time, Alberto Fernandez was elected as the new president for Argentina, and fortunately, despite his left wing Peron style protectionist/socialist background, he seems to be quite pro-mining. He not only recognized the importance and potential of the mining industry for revitalizing the economy, but is also planning on having a new Ministry of Mines, for which his Prime Minister candidate already has proven plans based on fiscal stimulation in mind. So although Kirchner is back as a vice president this time, it seems Fernandez is much more realistic with regard to mining than Macri and Kirchner combined. Very surprising. Let's hope it all pans out well for Blue Sky Uranium.

I hope you will find this article interesting and useful, and will have further interest in my upcoming articles on mining. To never miss a thing, please subscribe to my free newsletter on my website http://www.criticalinvestor.eu to get an email notice of my new articles soon after they are published.

The Critical Investor is a newsletter and comprehensive junior mining platform, providing analysis, blog and newsfeed and all sorts of information about junior mining. The editor is an avid and critical junior mining stock investor from The Netherlands, with an MSc background in construction/project management. Number cruncher at project economics, looking for high quality companies, mostly growth/turnaround/catalyst-driven to avoid too much dependence/influence of long-term commodity pricing/market sentiments, and often looking for long-term deep value. Getting burned in the past himself at junior mining investments by following overly positive sources that more often than not avoided to mention (hidden) risks or critical flaws, The Critical Investor learned his lesson well, and goes a few steps further ever since, providing a fresh, more in-depth, and critical vision on things, hence the name.

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Disclaimer:

The author is not a registered investment advisor, and has a long position in this stock. Blue Sky Uranium is a sponsoring company. All facts are to be checked by the reader. For more information go to www.blueskyuranium.com and read the company's profile and official documents on www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.

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( Companies Mentioned: BSK:TSX.V; BKUCF:OTC, )