Kraken Energy (CSE: UUSA)(OTC: UUSAF) CEO Matthew Schwab on Advancing Multiple Past-Producing Uranium Properties in Nevada, including the famed Apex Uranium Mine
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president & CEO of Kraken Energy — Mr. Matthew Schwab. Matt, it's great to have you on. You and I had a chance to catch up a bit at PDAC. How have you been, how are you?
Matthew Schwab: I've been doing well, thanks. Yeah, it was great to catch up at PDAC. Hope you've been doing well in the meantime. Great to sit down and give you an update on the company.
Gerardo Del Real: Let's get right into it. Listen, I'm going to tell you a couple of things that I took away from our conversation and sit down at PDAC. One, is you're singularly focused on Kraken, which, I have to tell you, as somebody that's been in the junior resource space for roughly 15, 16 years — it's not the norm. Typically, CEOs love to be CEOs and presidents of three or four different companies… and chairmans of another two… and consultants for five other ones. I absolutely love the commitment to Kraken Energy.
And before we get into the catalysts and the merits of the company, I want to talk a bit about your past success and your background because I think it really speaks to your outlook and dedication to Kraken and where I think the company could be going.
Matthew Schwab: Yes, absolutely. And, first off, I appreciate your appreciation for the fact that I'm dedicated to Kraken. Anybody who's been around the industry long enough has seen the fallbacks or the repercussions, potentially, to people being stretched too thin. It's easy to do and it's easy to fall into that trap.
So we made a very conscious decision when I took the reins of Kraken to make sure that this was my sole focus, and we're going to keep that going forward. So a little bit about my past for anybody who doesn't know, I've been in the industry since about 2009. I started in uranium in Saskatchewan in the Athabasca Basin.
I started for a small company called Hathor Exploration. Long story short, I was not part of the discovery team but I jumped in as part of the development team and was part of the sale of the company to Rio Tinto for C$650 million back in 2011. So a great kickoff to the career, as you can expect. And from there, it just evolved and progressed.
After a little bit of time at Rio Tinto, the company that purchased us, I started looking for a new opportunity in the junior space and I came across NexGen Energy. I came on as the third employee of the company and was the senior geologist at the time of the targeting and discovery of the Arrow deposit.
Shortly after that success for our team and company, I decided to expand my horizons a little bit and got into the private side of things. I started and sold off a series of private-owned gas firms, mainly focusing on upstream oil and gas exploration in western Canada.
And then, my most recent venture prior to Kraken Energy was a much larger and diversified consulting firm. I started with my business partner back in 2018, Axiom Exploration Group out of Saskatoon. In three years-ish, we took the company from just the two of us to about 110 employees working in 16 countries worldwide.
And then, in September of last year, as it happened, I was approached with the opportunity for Kraken Energy. And based on the team that was already assembled, the projects they had in place, the chairman heading up the company, it really didn't take much time for me to decide that this was the right opportunity to jump on board. So here I am now.
Gerardo Del Real: Well, let's get right into Kraken. You mentioned Hathor and the Roughrider Deposit selling to Rio Tinto for C$654 million. Where's Kraken's market cap because I really want to highlight the opportunity here?
Matthew Schwab: I think, as of today, we're sitting around C$17 million market cap.
Gerardo Del Real: And how much of that is backed up by cash, which is another key point for me as a shareholder and speculator in the space that really loves to see companies that don't have to go to the market and beg for money anytime soon, right?
Matthew Schwab: Absolutely. At the moment, we're sitting with about C$8.5 million cash in the bank. So the enterprise value of the company is roughly C$9 million right now.
Gerardo Del Real: So just over 50% of the value in the company is backed by the cash.
Matthew Schwab: Absolutely. A nice position to be in!
Gerardo Del Real: Absolutely. Let's get right into the assets. Tell me about where you are exploring, why you are exploring, where you're exploring. And then, let's talk about some of the catalysts that are coming up here soon.
Matthew Schwab: Sure. Right now, we've got three high-grade uranium projects all based in Nevada. That would be our Garfield Hills, our previously-producing Apex Uranium Mine, and the Huber Hills project.
All three of them have year-round access. They've got access to power, water (despite being in the Nevada desert), and, of course, with the grades from the previous production, average production grades of 0.24% to 0.25% U308 being, respectively, Huber Hills and the Apex Uranium Mine.
Drilling results, we've got a fair bit of a range but high-grade looking at 0.26% U308 over 14 meters at Garfield Hills, historically, all the way up to 0.37% U308 over 34.1 meters at Apex.
And then, of course, we've got the value-added metals on all three of our properties, as well, with silver grades up to 7,300 grams per tonne (g/t); gold up to 15 g/t. And now, based on our more recent prospecting exploration on the projects, we're seeing economic potential for moly, nickel, copper — just to name a few.
Gerardo Del Real: Where are you in the exploration process? You mentioned past production, which is another absolutely important box that I like to check off. Exploration on greenfields projects is great. It excites me as much as it excites anyone else that's been in the space and that has done well with exploration stories that work.
But when you have past-producing properties, I've got to believe that comes with a fair amount of data that you can work to your advantage to really hone in on key targets.
Matthew Schwab: Absolutely. Current exploration where we're sitting right now, we're just wrapping up our maiden drilling program at Garfield Hills, which should be wrapped up this week. Assays are off to the lab, so we should be getting results back, hopefully, in the coming month.
But as far as, like you said, about the greenfields/brownfields thing, our exploration strategy is really, really focused on capitalizing on historical properties or projects that are a brownfield state so that we can more or less skip the greenfield exploration stage and lessen the investment risk for people coming into the company.
And also, at the same time, really focus on being able to build up past resources rather than make a new discovery. And at that same time, fastrack these projects to a more or less production-ready state.
Gerardo Del Real: Excellent. What comes next, Matt?
Matthew Schwab: Well, like I said, looking at all three of our properties being past producers, we're going out there with the mindset of confirming historical results and building up the resource as we go; looking at expanding the potential and expanding the footprint of what's known and what's there.
So right now, the biggest thing we're waiting for is our assays to come back from Garfield Hills. But because of the success we've seen out there and the results that are coming off the down-hole probe and the handheld scintillometer, we're really actually excited to start planning for a Phase-2 program at Garfield Hills. We'd like to kick that off, potentially, before the other projects just because of what we're seeing.
Beyond that, we're definitely looking forward to getting the permit secured for our Apex property. And then, getting out and drilling both Apex and Huber Hills, hopefully, both of them within this year as well.
And beyond that, one of the key things that I'm really focused on is the continued process of project evaluation and looking to bring in additional projects to just keep building up the portfolio of our company to really focus on bringing multiple assets together into that hub-and-spoke mining model.
Gerardo Del Real: You have an excellent team… you're cashed up… you're in the US… you're targeting brownfields projects in the uranium space.
I think uranium, while it always takes a tad bit longer than any of us like, is due for an absolutely phenomenal, phenomenal bull run here in the next little bit that's going to be very, very profitable for specialty companies that are positioned here domestically and in North America with quality assets.
Matt, I want to thank you for your time. I want to have you back when those assays come in. And I'm really looking forward to continuing our dialogue here as the next couple of months go on.
Matthew Schwab: Absolutely. Thanks for having me, Gerardo. Always great talking to you, and I look forward to giving you another update soon.
Gerardo Del Real: Alright, we'll chat soon. Take care.
Matthew Schwab: Alright, thanks, bye.Click here to see more from Kraken Energy