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

Premier American Uranium (TSX-V: PUR)(OTC: PAUIF) CEO Colin Healey on Multiple Catalysts Ahead of a Uranium Bull Market Resurgence

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Premier American Uranium (TSX-V: PUR)(OTC: PAUIF), Mr. Colin Healey. Colin, it's great to have you on, it's been a bit, how are you?

Colin Healey: Yeah, I'm doing well, thank you very much. I'm happy to be here.

Gerardo Del Real: Let's get right into it. I want to talk about the last several pieces of news that you put out to the market, but before we get into that, I want to touch on the current state of the uranium market. We all know the supply-demand fundamentals and the mid to long-term picture being as bullish as I've ever seen it, I've been in the space for nearly two decades, so I don't think that's in question. But how are you feeling with the current spot price? How are you seeing the utilities acting? Do you sense that we're nearing the next leg up? Because we've been through what's been a pretty sustained consolidation here for the last little bit.

Colin Healey: Yeah, I would agree. Since February of last year, we've really seen a downward trend. I really think we're starting to see evidence of a floor. Uranium prices really seem to be firming up here around $64 a pound. The most important for the fundamentally focused people that understand the sector is the term price, which is still hanging in there at $80 a pound. And the differential between spot and term is always a bit of a visual issue for uranium equity investors, because the spot price definitely is taken as a strong sentiment indicator and people trade around it, so it does undo some volatility and some overhead on the equities, despite the things that you mentioned, the extremely strong fundamental backdrop that we're in from a supply-demand perspective. So I guess from a utility perspective, how they behave is a lot reflected in the term price. So I think that they continue to secure pounds and really accept pricing in the $80 range as a term price. But it's going to take some time, I think, here to start to reverse that trend.

One of the positives, I think, in the mechanics here is that when you have a spot uranium price that's substantially below the term price, there is the possibility of a carry trade, where you're committing to deliver in the future and buying in the spot market and trying to profit from that differential. And the bigger the differential between spot and term, the more attractive that, let's say, arbitrage looks. So I think that you're going to start to see some financial players trying to take advantage of the differential between spot and term, and that should also provide some support to the spot price before we start to see... The things that could cause a run on spot price and really have it recover is continued under-delivery by new supply.

As we watch different new sources of supply, which are few, start to turn on and deliver probably fewer pounds than they initially anticipated, we've seen some guidance reductions from several neo-producers, and really there are some commitments there to deliver uranium that are going to have to be covered somehow, and with good potential for that demand to fall into the spot market and also provide further upside. So I honestly feel that we're seeing a bottom for this stage of the cycle in uranium prices, that we're going to start to see a reversal, but that reversal can take time.

Gerardo Del Real: Listen, I couldn't agree with you more. I think that was very well-articulated. You've had a great last month, month and a half, in the share price, despite the consolidation in the space. Can you speak to that, and can you speak to some of the recent specific catalysts here that clearly have the market's attention?

Colin Healey: For us, company-specific, we announced earlier that we are going to move our Cebolleta Project, which we acquired in June of 2024, we're going to advance that to PEA and deliver a resource update, which is a really big accomplishment for us. It only had a historic resource when we first contemplated the acquisition of it, we were able to get that resource updated to current, so we have a 43-101 resource of 23.5 million pounds at Cebolleta in New Mexico. But in a year or less, our internal goal and our articulated goal to the market is to deliver a resource update and a PEA by early summer, we're saying, and we're pushing as hard as we can to make sure that we don't... Our goal is always to under-promise and over-deliver, so we're going to do the best that we can. That should be the biggest catalyst for us in the first half of the year, and we're on track to do it.

I guess one of the most important things about that is that in our technical report, where we estimated that 23.5 million pound resource back in June of last year, published back in June of last year to be accurate, there was a whole bunch of recommended spending in that that amounted to a couple of million dollars, more than a couple of million dollars, and we were able to, through interrogation of our existing historic database and the quality of it, able to supply some of the information necessary to generate that preliminary economic assessment, relying on the historic data, which is extensive and shown to be reconciled extremely well with confirmation drilling that was performed on the project earlier. So in this environment, I think it's really, really important that we were able to defer a couple of million dollars in spending, still deliver the biggest possible catalyst for that project that I can see, and then give the market a template for how to value that project going forward when we go and do the exploration extensional drilling to add pounds.

But to answer your question about the stock price in the last few months, one of the strongest things about Premier American Uranium has always been, in my opinion, the shareholder register. But that also includes the Sprott URNM, which rebalances in March and September of every year. Now, they own 6% of our stock, and investors in the Twitter sphere, or I guess the X sphere, you'll see a lot of commentary about our stock and the rebalancing process and the assumptions that third-parties were making about the required buying by the Sprott URNM ETF of our stock. And I think that's come to fruition a little bit and we've seen some support, the stock's up 50% in March, and I think that that's partially attributable to that process of rebalancing the URNM ETF.

But also, what it demonstrates, I think, that's most important is that when there's buying of PUR stock, there isn't a huge amount of selling coming in at those prior lower price levels, and it really moved the stock up when there was demand. And to me, that was important to really show the baseline value of the stock is much higher than the lows that we hit, and that new buyers of the stock really apply upward pressure on the stock. I think the valuation is much closer now to where I think it should be than was where it was, and I still think it's a bargain at this price, because of the things that we're going to try to deliver in 2025.

Gerardo Del Real: No, look, I think 2025 is a transformational year for you, the company, shareholders, and also for the uranium space. I don't think we end the year with the current prices that exist today. Colin, anything else to add to that?

Colin Healey: So I told you what the catalysts were going to be for the first half of this year. We're going to get a resource update, and quickly, on the back of that, or concurrently, we're going to have a PEA showing the first economics and mine concept for our New Mexico project, Cebolleta. But almost immediately on the back of that, depending on when we deliver it, we're going to be out drilling at our cyclone project in Wyoming, it's a ISR target that we started drilling in 2024. On the Cyclone Rim Target specifically on that Cyclone Project, we outlined a half mile trend that included mineralization at or above GT cutoff and cutoff grades for nearby resources. That project sits just about 12, 13 miles to the west of Ur-Energy's operating and licensed Lost Creek Mine, and also sits about the same distance from the Sweetwater Mill, which was recently acquired in the market and has been said, by the new owner, to be planned to upgrade to ISR processing capability.

So with those two plants within such a short distance of our potential deposit, I think it's really a strategic piece of land that we're excited to put some money into and start to move it towards resource. We have a seven to 12.5 million pound resource exploration target under a 43-101 report from 2023 there, so we're excited that we've started to see mineralization with good grades over a decent trend. So looking forward to delivering that news from July to October, so it should be a good year for us.

Gerardo Del Real: No, look, exciting times for you, for shareholders, for the company. Looking forward to having you back on here, and definitely looking forward to better sentiment in the overall uranium space, which we know is coming, right?

Colin Healey: Yeah, I firmly believe it, I'm tying everything I do to that, and I think it's quite easy to assess and see that it's just a matter of it developing and coming to fruition, so I'm looking forward to 2025.

Gerardo Del Real: Good stuff. Colin, thank you for your time, appreciate it.

Colin Healey: Thank you, appreciate it.