Categories: Energy
Topics: General Energy

Labrador Uranium (CSE: LUR)(OTC: LURAF) Executive Chairman Philip Williams on Transformational Acquisition Creating a Premier Canadian Company

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the Executive Chairman of Labrador Uranium, Mr. Phil Williams.

Phil, it's great to have you back on. You have been very, very busy behind the scenes. Despite a very stubborn uranium consolidation and overall macro volatility, you've managed to pull off what I think is going to, in retrospect, be one of the most accretive deals in the uranium space in all of 2023. We'll see if that holds.

But listen, congratulations on what you describe as a transformational acquisition creating a premier Canadian uranium company. I want you to provide the context and then let's talk about the asset.

Philip Williams: Absolutely. And thanks for having me on, Gerardo. Very excited to talk to you about this acquisition. We certainly believe it's transformational. We're acquiring the Angilak Project in Nunavut. It is a very high grade resource with a large uranium endowment that we think has tremendous potential to expand, and we're going to spend a lot of money this summer drilling it up.

Gerardo Del Real: Tell me a bit about the property, the commodity diversification, because obviously the focus is the high grade uranium, right? And we can talk about that a bit. But there's also other commodities that come into play, which is interesting to me, because Labrador's existing property package and portfolio already lends itself to that, with the belt that you're exploring. And so when I look at 2023 and I look at the potential for maybe nearly $20 million in exploration expenditures, that's a lot of news flow. Are you going to be that aggressive with both properties?

Philip Williams: Yeah, absolutely. And listen, you nailed it. When people ask us why we did this transaction, it's because this asset is very complimentary and on strategy with what we have in Central Mineral Belt. As you know, we have a large land package, with uranium resources, other commodities as well, vanadium and copper as you just talked about, and tremendous exploration potential. And that that's kind of our knitting at the company.

And the Angilak project fits a very similar build, large land package. In fact, they're the only player in this basin with existing resources, high grade uranium which you pointed out. But as you mentioned, there's other commodities.

An important commodity here, which I think has gone overlooked by the market and shouldn't, is molybdenum. There's over 10.4 million pounds of molybdenum in the existing resource and tremendous potential to grow that. There's also copper, there's also silver, and there's other things on the wider property area, other commodities that haven't even been looked for yet. So both properties have that dynamic where uranium is the base, but lots of upside from additional metals.

Gerardo Del Real: Tell me about the way that this deal is structured and then kind of set out what the rest of 2023 is going to look like. Because if I'm a shareholder of either company, I'm looking at again, the potential for a lot of exploration. But how do you prioritize that? What's that going to look like?

Philip Williams: Okay. So start with the structure of the deal, and this is basically, if you've known ValOre from before, ValOre has had this asset for 15 years and done a tremendous job exploring it. When the bear market of uranium happened, they pivoted into PGM exploration and development in Brazil.

And so they've been sitting with these two assets and they realized that that was untenable. They weren't getting properly valued for each of those assets, and they were splitting their time and attention. So they went on a process last year to figure out a strategic alternative.

We came in, agreed to the acquisition. We're buying it for 100 million shares of Labrador and $3 million in cash and that's going to happen over the next couple of months. ValOre needs to have a shareholder meeting, which I believe is scheduled for May 12th. I think the date will come out shortly. And then we'll close on the transaction shortly after that.

But we're not letting that slow us down. We're starting the exploration programs at both projects right now. And you mentioned we're going to spend a significant amount of money there. We're going to spend about $10 million at Angilak and we're going to spend $7 million at CMB.

All of those programs are starting now. There's a lot of planning that has to happen in front of actually getting those programs going. We're going to start our big district-wide gravity survey at the Central Mineral Belt. We're going to start that in a couple of weeks.

And then up Angilak the real focus is drilling, drilling, drilling. There's an existing resource. It grows. We've got very good indications that along strike, we can grow these resources. So we're going to start with a 6,000-meter program there this summer and then move into a much larger program next year based on success of course from this program.

Gerardo Del Real: When you stepped in as interim CEO, you did that obviously having M&A and a strong M&A focus in mind. You've just announced that along with the acquisition, you expect to appoint John Jentz as CEO. Obviously, decades of experience there. Can you speak to that potential appointment?

Philip Williams: Yeah, absolutely. And you nailed it. So when I came in in January it was with a view that I wanted to in short order do the things to put this company on a pathway to success. And I think the two things check that box. So it's adding a potentially world class asset. Don't want to get ahead of ourselves, but I think it has that potential. And a senior management person to come and run the company with experience.

As you mentioned John Jentz has decades of experience in the mining industry. His most recent public company experiences were with SEMAFO and North American Palladium, one as management, one on the board. Both of those companies got taken out, but John knows how to operate businesses, he knows how to finance businesses, he knows how to do M&A, and he knows how to sell companies. So I think he's going to be the perfect steward for the company going forward.

I'm going to remain as the executive chairman and be there working every day with him on the company and moving it forward. Also, we're strengthening the board of directors as part of the transaction. So the CEO of ValOre, Jim Paterson, has come on the board and another member, another appointee from ValOre is going to come on the board, and that's going to happen at our next AGM.

Gerardo Del Real: A lot to like. A busy 2023. You'll be cashed up. The treasury will be strong. I love the emphasis on drilling, expanding resources, and getting out there and looking for new discoveries. Anything to add to that, Phil?

Philip Williams: Look, I think in the beginning you hit it. It's been a very volatile time for uranium, well, the global market for sure. Uranium specifically. I think we're going to look back in 6, 9, 12 months, particularly after the major work programs that we're going to undertake at both these projects and realize that the combination of these assets is going to make one plus one equal much more than two. And we're very excited about having this asset in the portfolio and really rolling up our sleeves and getting to work.

Gerardo Del Real: Looking forward to it, Phil. Appreciate the time. Looking forward to having you on. And hopefully we have John on here in the next couple of months.

Philip Williams: Absolutely. Thanks, Gerardo.

Gerardo Del Real: All right. Chat soon.

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