Consolidated Uranium (TSX-V: CUR)(OTC: CURUF) CEO Philip Williams on Accretive M&A on Best Uranium Fundamentals Ever


Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the Chairman and CEO of Consolidated Uranium, Mr. Philip Williams. Phil, we're overdue for a catch-up. How are you, sir?

Philip Williams: Yeah, I'm very well, Gerardo. Good to talk to you again.

Gerardo Del Real: Listen, the last time that you and I spoke, and I think it was about a month and a half or two months ago at least publicly, we talked about the bullish uranium fundamentals and how, despite the fact that the uranium spot price is still lingering in the high 40s, low 50s, the fundamentals are as good as many people way smarter than I have ever seen them. People that have been in this space for many, many decades. You've taken advantage of that suppressed uranium spot price to go on a merger and acquisition spree. And so we have a lot to catch up on. I'll let you provide the context of the recent acquisitions, including the acquisition of Virginia Energy Resources, which secures the largest undeveloped uranium deposit in the US. A lot there. I'll let you get to it, Phil. How have you been?

Philip Williams: Yeah, no, good. And as you say, very busy. We've been active on a number of fronts, and look, it's just kind of more of the same for us. As you point out, uranium prices have not sort of gone where we might have thought they'd be. They're going there and we're absolutely convinced of that, and there's no part of the uranium supply and demand dynamic right now that isn't supportive of higher prices in the future. So we're going to continue to pick off undervalued assets and companies where we can, where it's accretive and makes sense for us, and Virginia is a prime example of that, and quite frankly, an asset and a company that we've been tracking for a long time and just waiting for the stars to align in terms of when the time to pull the trigger on it is.

Gerardo Del Real: What does the acquisition of Virginia Energy Resources bring? I mentioned that it's the largest undeveloped uranium deposit. It's a deposit that has sat idle for a bit, for several reasons. What's your take on that? I know in the press release you mentioned the support for nuclear in this part of the country. Can you speak to that a bit? Because it sounded really bullish and I thought it was a really important, and maybe a point that was missed by the audience.

Philip Williams: Sure, yeah, and I think when we look at uranium as a company and we think about where do we want to be, we look at the map geographically and we want to be in the top tier jurisdictions, and that could be they have uranium mines, they have a good history of mining, and quite frankly a stable jurisdiction. And so we've always focused on those kinds of countries. And so we're in Australia, we're in Canada, we're in Argentina, and in the US. The US really stands out to us as the jurisdiction which is going to get a lot of attention, and quite frankly needs uranium production. So, your audience may already be familiar with this, but you have the largest fleet of nuclear reactors in the world in the United States and effectively you have zero domestic production, and this has to change. The country wants and needs, and it's all levels of government, it's a nonpartisan issue, that they want to have uranium production in the country.

So then zoom into Virginia, and Virginia has a new Governor, Glenn Youngkin, he put out an energy plan just a month ago where he basically said, "We need to go all in on nuclear." And it's already a nuclear state. There's four operating reactors, they have advanced manufacturing capabilities in the small modular reactors in other parts of the nuclear fuel cycle. It's home to the only manufacturer of naval nuclear reactors for US subs and aircraft carriers. This is a state that very much is already on board and favorable towards nuclear power. And then what you also have in the state is the largest, as you point out, largest undeveloped uranium project. So to our mind, a state that's pro-nuclear and going more into the nuclear space, that has the largest resource, there's a disconnect there if they don't ultimately allow this project to be developed, and then unlocking tremendous value for ourselves and our shareholders.

Gerardo Del Real: You mentioned the diverse portfolio. How do you prioritize moving forward to make sure that you maximize shareholder gains in this uranium bull market? I think anyone that's watched the space for any amount of time agrees that the uranium spot price is headed not just higher, much, much higher, and we know the kind of money that can be made in the space when that happens. How do you plan on prioritizing the portfolio to make sure you capture the biggest gains for Consolidated shareholders?

Philip Williams: Yeah, it's a great question, and you're entirely right. Uranium equities will and can go parabolic when the price moves. We've seen it in the past. I think we're going to see it again when prices move, but how are we looking at our portfolio? And there's a graphic that we just put up onto our website as part of our presentation that I'm going to talk to a little bit here and encourage listeners to go and take a look at it.


ConsolidatedPresentation 11-16-22 interview

But what we're ultimately trying, and so you hit the nail on the head, we're trying to unlock value in these assets for our shareholders. We're buying them at bottom of the cycle prices and trying to realize that value ultimately when the bull market really comes. What we ultimately want to create here is a multi-asset producing company. That's where the real value is going to be created. We've got a bucket of the near-term production assets where we already have assets in the US that are past producing mines that can be turned back on very quickly.

And then we have this portfolio of other projects around the world, including now, well, once we close the acquisition, Coles Hill. Other projects in Australia, a project in Argentina, projects in Canada. And our goal here is to advance those projects into that near-term production bucket by expanding capital on work programs, and you're going to see more of that coming from us in the coming year and expanding resources, evaluating the economic potential of these projects, and hopefully moving those over into that bucket.

At the same time, one of the things that we've been very successful at and has been a key kind of tool for us in our toolbox to create value is through spin-outs. We spun out a company called Labrador Uranium earlier in the year, where we took one of our assets, married it with some other assets and created a new listed company. Put a, it's a management team there, and that company's gone on about exploring a tremendous project in Labrador. We think that that's another way that we can continue to realize value from these assets. If they don't move into that near-term production basket and do it through the work that we're doing or some political advancement that we're looking for, we may go ahead and spin some of those out and realize value for them. Because right now, on a sum of the parts basis, we're not getting value for all of our assets, and so we'll do the things necessary as a management team to unlock the value for those assets.

Gerardo Del Real: No, listen, I couldn't agree with you more. I'm biased, I'm a Labrador shareholder. Same with Consolidated. It's in the portfolio. I look at Consolidated trading near 52-week lows, I look at the 52-week highs, I look at an analyst price target of over $5, a research report that was published here a few days ago, and I think that's conservative in the uranium bull market that's coming. But again, it sounds cliche, I tell everybody it's buy low, it's sell high. There's two parts to that equation. Everybody loves to sell high. It's hard for people to buy low. I encourage everybody to look at Consolidated as a great way to pick up some uranium exposure. Phil, are you done with M&A? I know you've been busy. I know you've brought in a lot of projects. You're talking potential spin-outs here in the future, developing the resource base, defining the economic parameters, but on the M&A front, are you done or are you still looking?

Philip Williams: No, we're not done. I mean, look, we're evaluating opportunities on a regular basis. They have to make sense within the portfolio, and they also have to make sense from an evaluation perspective. But just like in the last cycle, and we're starting to see that M&A activity heat up, whether it's Encore doing a deal just the other day with Energy Fuels, or UEC has been tremendously active and I think they're getting a lot of traction for that strategy for them, it's going to continue to be part of our strategy. But with that bigger picture in mind, how are we going to create a business that has multiple production, near-term production assets in top jurisdictions? And so a pipeline of these production assets.

And then, you know what? We're never going to overlook assets like Coles Hill, where you have a world-class resource, large project that technically checks all the boxes, but you can get it at these discount valuations because of some historic impediment to development, which again, as we talked about in our press release, we don't think the past has to mirror the future, or the future doesn't have to mirror the past when it comes to those impediments given the requirement for new uranium mines that's coming down the pipe, if we see anything like the growth in nuclear reactor build that we're seeing projected by some of the groups out there.

Gerardo Del Real: Couldn't agree with you more, Phil. Exciting times on the M&A front. I'm really looking forward to seeing some dollars put in the ground and really, really looking forward to getting a more complete picture of just how robust the resource space is for Consolidated. Thank you so much for your time. I get the sense you and I will likely be chatting before year end. Anything again to add to that, Phil?

Philip Williams: No. Listen, I appreciate your support, and just keep watching this space. I absolutely believe we'll be talking about some other activities before the end of the year, and I look forward to it.

Gerardo Del Real: Looking forward to it. Good work, sir. Keep at it.

Philip Williams: Thank you.

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