When investing in uranium, there are several ways to go about doing so. You could go with an ETF like URNM or URA to have more of a hands-off approach to the sector. Going for the best of the best producers and developers is also a valid tactic, as that provides more potential reward as opposed to an ETF, with a low risk profile to boot. When you go further up the risk spectrum, you reach the exploration part of the sector. The reason why this brings more risk with it, is that an exploration company might not find anything and thus not always participate in the potential upside. This means that if you go for an exploration company as part of your portfolio, you should take a critical look at what companies have the following things:
- A competent and shareholder aligned management team
- A promising land package on which to explore for the underlying commodity
- A solid plan going forward
- A good relationship with the local people and communities
- A healthy record of G&A expenses aligned with creating value for shareholders
There are a few explorers that fit the bill in my book, but the one that I think stands out, because of their still relatively low market cap and very active management team, is a company that I have discussed before as well and you can find the details of the company itself in my post history. That company is Standard Uranium. In collaboration with the company and the initiation of their summer drilling program, here is another update on how the company is trying to create new shareholder value. On May 4th, the company released the following statement that they were “pleased to announce that Geotech Drilling has been selected as our new drilling partner at the Project. Along with Dahrouge Geological Ltd., Access Helicopters, and the team at Big Bear Lodge, all vendors have been secured and the phase II 10,000 meter summer drill program is slated to commence the first week of June with crews mobilizing the last week of May. The drill program is expected to run the entire summer season, wrapping up in mid-September. The Project is situated in the Southwest Athabasca Uranium District of Saskatchewan, 25 to 30 kilometers to the west of Fission Uranium’s Triple R and NexGen’s Arrow deposits and encapsulates the inferred continuation of the uranium-fertile Patterson Lake corridor.”
I think that it speaks volumes about the tenacity of their management team that they have secured the partnership with Geotech Drilling. They have personally gone and sat down with Geotech’s management to hammer out a deal that will see them embark on an ambitious 10,000-meter drilling program this summer. Going back to point number 2 of things to look out for in a junior exploration company, having a promising land package to place the aforementioned drills on, the region where they plan to drill has historically shown some great results. While past success is no guarantee of future positive results, it certainly shifts some of the odds in their favor to find what they are looking for, which is the next big and high-grade Athabasca Basin uranium discovery. Their previous winter drilling program was concluded a few months ago and you can read more about that one here.
This is however not the only thing they Standard have been doing, as having the right personnel in place is paramount to a successful execution of a plan. Therefore, they have made a few important additions to their team, which are as follows:
· Sean Hillacre, the new VP of Exploration, who has been project geologist for Standard Uranium and was previously part of the technical team that worked on the Arrow deposit.
· Neil McCallum, appointed as Lead Technical Director, who has been with the company since its inception and will continue to direct and advise the team as they start the biggest drilling campaign for the company to date.
· Mason Ermel (NexGen and Denison), Ezra Meszaros (Orano) and Robert Meek (multiple junior exploration companies), all experienced additions to the company’s technical team with the right skill sets to hopefully help the company succeed in making a great discovery.
The combination of an ambitious drilling program with an experienced partner, new quality additions to their team and a promising area of land to conduct all this on, makes me confident that this junior exploration company could go a long way. Of course, nothing is ever certain in the mining industry and there are naturally more risks involved with an exploration company, but they are certainly trying their best to shift the odds of success in their favor in whatever way they can. I also recommend following their company account on Twitter, where they often post new video updates regarding the company and keep shareholder up to date with new developments. When their summer drilling program concludes, I will make sure to provide another update as well. Until that time if you have any question, I will be happy to answer those. I wish you all a good and healthy rest of your day.
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence or consult your financial professional before making any investment decision.