Categories: Energy / Mining Stocks
Topics: General Energy / Uranium Stocks

North Shore Uranium (TSX-V: NSU)(OTC: NSURF) CEO Brooke Clements on Drilling, Jurisdiction and Upcoming Resource Estimate

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president and CEO of North Shore Uranium (TSX-V: NSU)(OTC: NSURF), Mr. Brooke Clements.

Brooke, great to have you on, sir. A lot to get to. But before we get to that, how are you today, sir?

Brooke Clements: I'm doing great, Gerardo, and it's sure good to talk to you again. Yeah, let's get right at it.

Gerardo Del Real: Let's get to it. Look, the uranium sector, as you know, is extremely cyclical. It can go from where we were a year ago, where uranium's headed to $200 and everyone's excited and jubilant and just wants every single uranium name in the space, to what we've had the past year or so, which is a healthy consolidation, a boring period that frustrates even the most ardent of uranium speculators and bulls.

We talked a bit off-air. I think right now, we're sitting at that coiled spring level where even the spot price is starting to percolate up. It's right at that 89, 90 level, the contract price, the long-term contracting price, that's starting to creep up as well. And all signs to me point to get ready and buckle up because it's about to get really, really interesting again. I would love your take. You've been in this space for quite some time with your background. I would love to see how you read it and what you think out there in regards to uranium.

Brooke Clements: Yeah, Gerardo, I think your analogy of a coiled spring is probably a really good one. Right now, the price is sitting at about 90, and it's been in that range for a little while. But there's a big gap between uranium production and demand, and that gap is only projected to widen. Over 30 countries have committed to triple nuclear power by 2050, including the US and Canada, and just a lot more uranium. A lot of new uranium will be required to meet all that demand.

US utilities are the leading consumer of uranium in the world at close to 50 million pounds. And in 2025, the US only produced two million pounds of uranium. So right now there's a big push in the US to up its uranium gain, get more domestic production so they can become more self-reliant.

And just as a little anecdote about that, there's a big annual conference in London called the World Nuclear Association Conference, and it was last week. And people there were making a lot of noise about a recent move by the US National Nuclear Security Administration. And they put out a tender for four million pounds annually of uranium from a domestic source for defense purposes starting in 2030. If there's about 170 million pounds produced annually, that would be over 2% of world production.

So that's just one example of projected demand that is not there now, but is coming at us soon. All these positive developments, especially in the US, and the US really recognizes they need to up their game in uranium. And all the attention to the US is positive for people like us with the uranium project in the US, I think.

Gerardo Del Real: Yeah. No, look, I couldn't agree more. I think if you have jurisdiction, if you have an attractive cost profile, if you have the potential for scale and life, you're going to be in the sweet spot here over the next several years, which brings me to North Shore.

You had some results here recently that were really, really, really good. And look, I'm biased. I'm a shareholder, wrote a check in the most recent financing or the second to last financing. And frankly, with your market cap, I'm surprised a bit that the market didn't react more positively. However, I'll caution that I understand that most uranium speculators right now are bored with the sector.

But I thought it was a perfect time to have you on and talk about the recent results because you have historic resource, you have jurisdiction, you have the potential for a low-cost profile, and you're here in the US. So that checks a lot of boxes for me. Can you speak to the latest results and how happy you were with those?

Brooke Clements: Yeah, we're very happy with them. First, I'll just give you a little background. Rio Puerco's project in Northwestern New Mexico, where, in the '70s, Kerr McGee drilled over 1,100 holes to find what they termed a mining reserve, and they actually started building an underground mine. They sunk a shaft, some tunnels. They were just at the beginning of full scale construction and the uranium price tanked in 1979.

So they left, and then the uranium price went flat basically to the 2000s. And then in 2009, a company came in and did a resource estimate of 11.4 million pounds. We call that a historical resource because it's based on old data and it's really not a current resource as defined by 43-101. And one other thing that's also worth mentioning in this property is that all of that historical resources in one section, section 18, and our block of 83 claims covers parts of other sections where uranium was discovered. So there's good exploration program.

Until our drill program this year, there has been no significant work at Rio Puerco since the '70s. And our goal with the work we're doing right now is to validate all the historical data so we can use it in preparing a current resource estimate to today's standards. So to our program, this summer we drilled 13 holes in our phase 1 drill program, which we completed in July. And we're drilling at the same sites where Kerr McGee found significant mineralization, and we're doing it to validate their work for the resource estimation we plan to do.

Just a couple of weeks ago, we reported results from our drilling and we had some great uranium intersections. All 13 holes encountered significant uranium mineralization at depths between 500 and about 750 feet. And we confirmed the same mineralized zones that Kerr McGee identified when they were there. And importantly, the depths of the uranium intersections are below the water table, and that's a favorable characteristic for in situ recovery uranium mining, or ISR, which is cheap type of mining.

And just to give you a couple examples of a couple of the intersections, one hole, 39, we drill 27 feet at an estimated grade of 0.295% U308, and another hole 640, 12.5 feet at 0.33%. Those are pretty impressive grade times thickness values. And grade times thickness is kind of how people look at ISR deposits to determine. It's a real favorable characteristic, these kinds of intersections, as you're assessing the amenability of ISR mining. So some good results, and we're looking forward to going back soon.

Gerardo Del Real: You mentioned wanting to go ahead and update that resource to make it compliant. Do you have a timeline for that? And then obviously, I'm assuming that you're gearing up and targeting for a phase two drill program.

Brooke Clements: Yeah. So the next steps for us, we're now planning for a phase 2 program in Q4. And we're permitted for up to 13 more holes, and everything's already prepared to do that drilling. And we're going to do the same thing we did in phase 1, twin historic drill sites where Kerr McGee encountered uranium mineralization in the '70s. And after we report those results, we'll use them in combination with the phase 1 results and do a detailed comparison with all the previous work and the historical resources.

And then we move towards early in the new year, move towards preparing our own current resource estimate using our own models. In addition to that, we are also assessing the ground adjacent to the historical resource that is in section 18. And we're working on a plan on how to most efficiently attack that and confirm additional uranium mineralization. And we'll be reporting any developments we have there.

Gerardo Del Real: Exciting times. You're in the right jurisdiction here in the US. The demand is just astounding, right? The projected demand. And that doesn't take into account what I think is going to be a lot of trouble for a lot of producers keeping up their production profile. The best time. I couldn't think of a better time to delineate a significant uranium deposit that potentially has the ability to be one of the lower cost operations from a producer perspective.

Great timing, coiled spring, tiny $15 million market cap. I recommend anyone that's looking for quality exposure. That's significantly de-risked because of the past drilling and all of the data that you already have acquired prior to this phase 1 program and then definitely obviously in preparation for a phase 2. And I think your timing is excellent and really looking forward to the rest of the year. Anything to add to that, Brooke?

Brooke Clements: Yeah, Gerardo, we're really happy to have that compelling project in New Mexico with an 11 million pound historical resource and exploration potential and the potential for ISR mining. And very importantly, it's in the US, a country that is really focused on supporting all facets of the uranium industry.

And you also can't forget that we have two good projects in Saskatchewan's Athabasca Basin, the world's second-largest uranium producer with the highest grade deposits in the world. And we also have a great team of people with uranium experience that are really focused on the projects. And so I just say stay tuned for updates. We're going to be really busy in the coming months.

Gerardo Del Real: Looking forward to it, Brooke. As always, thank you for your time. We shall be chatting soon, I suspect.

Brooke Clements: Okay. I look forward to it, Gerardo.

Gerardo Del Real: Awesome. Thanks again, Brooke.

Brooke Clements: Okay.

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