Blue Sky Uranium (TSX-V: BSK) CEO Niko Cacos on the District-Wide Potential of the Amarillo Grande Uranium-Vanadium Project in Argentina
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is President and CEO of Blue Sky Uranium (TSX-V: BSK)(OTC: BKUCF), Mr. Niko Cacos. Mr. Cacos has over two decades of management expertise in the mineral exploration industry. He holds extensive experience in administration and providing strategic planning for public companies. Mr. Cacos also serves as director and officer of several publicly traded companies. Niko, thank you very much for joining me today.
Niko Cacos: Thank you for having me, Gerardo.
Gerardo Del Real: Well, I am a proponent that the uranium space is bottoming right now and so we're definitely looking for early stage quality stories and quality teams. Blue Sky Uranium is one of Argentina's best positioned uranium exploration companies and you have more than 3,500 square kilometers, I believe, of land to explore. Now, the company's mission is to deliver exceptional returns, of course, to shareholders by acquiring, exploring and advancing towards production a portfolio of your uranium projects with an emphasis on near surface uranium deposits, which I think is important, with the potential for near-term low cost production.
Now, the company is also a member of the Grosso Group. I had the pleasure of interviewing Mr. Grosso about a week or two ago. You basically, and the group, pioneered exploration in the mineral industry in Argentina. You've operated there since 1993. Now, the network is a deep one and before we talk about the company and the projects, I'd love to get a bit more detail about your background and why you came on board with Blue Sky Uranium.
Niko Cacos: Well, I think you kind of touched it there. I've been working together with Joe Grosso, the chairman of the Grosso Group, since 1993, at a time when Argentina was, use the word, mining was virtually unknown there. There was no mining activity whatsoever. The country had just privatized and was inviting foreign investment and our organization as the Grosso Group were one of the first companies to get involved in there. Whenever you're a first mover in a situation like that there's a lot of low lying fruit for the picking, and that's exactly what happened.
The Grosso Group itself is responsible for at least three world class gold and silver discoveries in Argentina, and as we've seen over the years, opportunities evolve. We're seeing tremendous opportunities for uranium discovery and this is an opportunity that Blue Sky Uranium represents.
Gerardo Del Real: Excellent. Let's talk about that a bit. I mentioned the deep network in Argentina that Mr. Grosso and the organization has built over many, many years. How has Blue Sky Uranium benefited from that network? The gold-silver discoveries that you mentioned, made by Golden Arrow, obviously have been world class, you've been able to monetize those and enter into joint ventures with some major partners. Tell me a bit about the team in place at Blue Sky and how Blue Sky has benefited from that first mover advantage.
Niko Cacos: Well, Blue Sky's opportunity here in Argentina is one that's spanned over a period of about a decade right now. This is a big project that we're working on. It was about 10 years ago when I was with Joe in the province of Rio Negro, where we're active, and the province at that time was initially elected to be anti-mining, and after some discussions we were able to strike a strategic alliance with the province at that time. We've enjoyed tremendous support from the provincial government of Rio Negro, because in that area what we did we followed up, we acquired a very large tract of land by examining an area about half the size of Switzerland.
Gerardo Del Real: Wow.
Niko Cacos: Just to give you an idea. What we discovered there is this is a region that's not just a single little discovery for uranium. It hosts the potential for a massive uranium wide district. After we acquired our initial property portfolio, we rolled up our sleeves and started to work. Because it was such a large area, we attracted outside investment. Ross Beaty's group, a very famous mining entrepreneur internationally, was attracted to us. He described this project as "potentially the Saudi Arabia for uranium." We worked together for a number of years, exploring it and focusing it a little bit, and then, ups and downs over such a long period of time with Japan and the issue there, so uranium went down. Out emerged a new partner out of that, AREVA, the world's largest nuclear organization that's government controlled in Paris, in France. They're a worldwide organization, again, they were attracted to this portfolio for its large district-wide potential.
While that continued for a while, they had to pull back because of budgetary cuts, nothing to do with our project. Recognizing the incredible opportunity we have with Blue Sky, during the very dark days of the mining market in 2015 and 2014, we put the company on care and maintenance, we made every effort to, through loans and financings, to keep the company intact. Now, recently, it's just in the last year that we're able to attract a very intelligent, very bright geologist, Guillermo Pensado, he's an Argentinian, he's a specialist in uranium, working in that country for over a decade in various uranium environments. He's got a Master's degree, educated in Queen's University in Toronto, a very sharp young man and he approached us and said, "You guys have an amazing opportunity here to have something enormous and I have some ideas how we can follow this." We liked the idea, we restarted the company about a year ago, and as of a couple of days ago we put a press release out basically announcing the initial fruits of Mr. Pensado's ideas and it looks like we're onto something very, very significant.
Gerardo Del Real: Absolutely, and that's the perfect segue for my next question. You mentioned the district scale land package that you have. Can you please explain the main focus of your current exploration work and the important new uranium vanadium discovery that you recently announced that you just alluded to?
Niko Cacos: Yes. Our property portfolio basically consists of two camps. There's our large and focused portfolio called Amarillo Grande, which translates into the Big Yellow. It's in the province of Rio Negro, and all our exploration efforts are focused there right now. Then we also have an additional large portfolio in the neighboring province of Chubut. But as we're focused on this one, Amarillo Grande. There's over 170,000 hectares of property. The district that we're covering, and because I'm Canadian I think in metric, it's 140 kilometers long by 50 kilometers wide. It would be like 100 miles by 30 miles wide district. It's a massive area.
Gerardo Del Real: That's incredible.
Niko Cacos: It is incredible, and within that area we have been able now to focus on the target called Ivana and it is on this target that we've been able to identify a high-grade uranium zone that's 2 kilometers long by 400 meters wide. It's still a large area, and it's the first of what we see potentially having many more of these large high-grade zones potential in Amarillo Grande.
Gerardo Del Real: Excellent. It appears, obviously, that you're very focused on Amarillo Grande and that this new discovery is going to be a milestone discovery and hopefully one of many for Blue Sky Uranium. What's the plan moving forward? How do you plan to follow-up exploration based on the most recent news here?
Niko Cacos: The most recent news, we've identified this zone and we see that the zone is open to become larger both going northwards and going southwards. What's happening right now is there's geophysical work and there's drilling work that's continuously ongoing. We are testing the extensions. We want to see how large is this one initial zone. We want to test how big it is. As soon as we get that identified then we're going to turn the drill rigs inward, do an infill drilling so we can have a resource calculation. We're hoping to have that by the first quarter of 2018. What would follow after that is a Preliminary Economic Assessment which would give us an initial sort of feel for what the economic prospects are for this one zone alone.
Gerardo Del Real: Excellent. Excellent. Now, I mentioned in the introduction that I believe that we're definitely at the bottom of the uranium cycle and that this is a great time to begin a position into the better uranium juniors. How do you see the uranium space right now? You've been involved in the natural resource industry for decades, how do you see things, Niko?
Niko Cacos: Well, having had almost 25 years of experience in the mineral industry, the one thing that I know for sure, prices go up, and prices come back down. Then they come back up again. What we don't know is how long is the distance in between those ups and downs.
We recognize that uranium is at the bottom right now and the nice thing about this discovery that we're focusing on in Argentina is that our objective is to obtain a deposit that has size potential of at least 15 million pounds that would be profitable even in this market. The style of mineralization for this Amarillo Grande is amongst the lowest costs to put into production and then to produce. We're seeing that in other operations that are currently in production and are profitable in this environment. We look at consensus of analysts' pricing, there's a consensus that there's going to be a deficit in uranium over the next couple of years, the price is forecast to go up and in that environment our project would potentially be even more profitable than what it would show in this current environment. We're very optimistic about it.
Gerardo Del Real: Excellent. What does the infrastructure look like at Amarillo Grande?
Niko Cacos: At Amarillo Grande there's power and rail in the area. It's a very low, flat lying region. The uranium occurs not in hard rock, it occurs right up at the surface, and the ground itself is unconsolidated. Basically, it's like a gravel operation. There's a town that's nearby where we can have a pool of labor. We enjoy excellent relations with the government and with the community. It's an absolute dream to have a project in such a wonderful environment.
Gerardo Del Real: Excellent. Excellent. How does the share structure and the cash position look like? Share structure is something that's very important to me when I'm looking at a potential investment or speculation into a company, especially earlier stage. What does that look like, Niko?
Niko Cacos: Well, our share structure, we've got 72 million shares outstanding right now, and more than half of those shares are held by insiders of the company and long-term shareholders that are investors in all the Grosso Group companies. We have a very strong following for this. We've got a couple million dollars right now which is more than enough money to take us through to do a resource calculation. All we ask is look at our company, look at the developments, we expect to have news coming out on an ongoing basis and we have a lot of confidence that what we've discovered is going to become bigger and bigger. This is going to be a real head-turner for anybody in the resource industry that's interested in that.
Gerardo Del Real: Excellent. Now you mentioned a potential resource estimate and maybe even a PEA, and I know some of it will be dictated by the success of the drilling. Can you tell me a bit about a timeline for that in a perfect world, knowing, obviously, that in the mining and mineral exploration industry things don't always go the way that you anticipate but in a perfect world, what does the timeline look like for each of those?
Niko Cacos: Well, you're right, it's like any smaller organization, things change and you react to the facts as you get them. We're targeting for the first quarter of 2018 for a resource calculation and a PEA would immediately follow that.
Gerardo Del Real: Fantastic. Now, no pun intended, there's a lot of blue sky with Blue Sky Uranium. You have a district scale land package, it's attracted interest from the majors in the past, it would not surprise me to see interest once again rekindled, frankly. What can shareholders expect here in the next 6 to 12 months? Do you plan on negotiating with mid-tiers and possible majors as far as Blue Sky? And before you answer that, could you give me the market cap? Because it's tiny relative to the opportunity.
Niko Cacos: Our market cap is only $10 million dollars. It is tiny. It does reflect the current uranium sort of state of the market out there, but I think that's where the opportunity lies, right? A lot of opportunities are acquired when they're not in style or not in fashion and then you hang on to it and that's how you make money. Blue Sky, over the next few months here, we think we're on to something very significant and we hope in the next 6 months to be able to come back and have another interview and tell you, "Listen, we've got a major asset here in our portfolio, and something that's going to generate some fantastic returns for our shareholders." That is what our objective is.
Gerardo Del Real: Excellent. Excellent. Niko, I want to thank you so much for your time today. It's a compelling opportunity. Is there anything else that you'd like to add?
Niko Cacos: At this point, no. I would just say, at the very least, follow our story. It's going to be one, I think, that's going to be very significant and perhaps if you're interested and tuned into it now, it will at some point be a very compelling investment, hopefully.
Gerardo Del Real: Excellent. People, of course, can look to resourcestockdigest.com for Blue Sky news and you can also go to Blue Sky's website which is blueskyuranium.com. I encourage everybody to, at the very least, get familiar with the land package, get familiar with the team. This is a team that has true first mover advantage in Argentina, a country I'll actually be visiting in a couple of months. I'm excited to get out there because the exploration potential is absolutely fascinating.
Niko, thank you so much for your time. I look forward to having you back on as you get some of the news, the exciting news, that you have planned here for the next few months.
Niko Cacos: Thank you for having me and I too look forward to being back and sharing with you our new developments going forward.
Gerardo Del Real: Excellent. Thanks again, Niko.
Niko Cacos: Thank you.
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