Categories: Energy
Topics: General Energy

Premier American Uranium (TSX-V: PUR)(OTC: PAUIF) CEO Tim Rotolo on Building Shareholder Value via the Consolidation & Development of US-based Uranium Projects in America’s Uranium Production Resurgence

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Premier American Uranium — Mr. Tim Rotolo. Tim, it's great to have you back on. It's been a few months. Congrats on Premier, and congrats on the timing. It's absolutely impeccable. How are you doing today, sir?

Tim Rotolo: Doing great, Gerardo. Thanks for having me and appreciate the kind words.

Gerardo Del Real: Absolutely. Look, I think we should have a discussion first and foremost about your background because I'm very familiar with it. But it is unique in a couple of aspects. And I wanted you to touch on that a bit and a little bit on your background in the uranium space because, if I'm not mistaken, your thesis plays into what you're doing now in a weird arching way, right?

Tim Rotolo: Yeah, I think of it as being a little bit circuitous. But I think it is definitely differentiated from a lot of the other mining CEOs who probably have much more traditional backgrounds as geologists or having worked directly in the mining industry. 

I guess I think of myself as an entrepreneur or an investor first, which probably aligns with a number of mining executives. But certainly, my background and how I arrived at this position is very unique. 

So as many of you may know, I partnered with Mike Alkin in 2018 to launch Sachem Cove, which is a dedicated uranium mining strategy. Obviously, Mike is one of the most prolific thought leaders in the space and has just absolutely nailed the thesis. And so we've been in and around the space, Mike, probably for two years prior to that. 

We really started this as investors realizing that there was this supply deficit forming, and one of the earliest investments that Sachem Cove made was staking some land in Wyoming around what's now our cyclone project. 

And back then, we looked at it and said, ‘Man, the U.S. has gone from being a self-sufficient miner domestically — for its own production and own nuclear power needs — to basically producing nothing!’ And, historically, it just didn't make sense to us also recognizing that the U.S. is an incredibly safe jurisdiction. And so if the supply deficit thesis played out, there was going to be a need for pounds in safe jurisdictions. 

And so we set about forming what was the predecessor company to Premier American called Premier Uranium. And then, we just sat and we waited. In the interim, I had the good fortune of conceptualizing URNM [Sprott Uranium Miners ETF] and building that from zero assets to about a billion dollars. 

We then sold it to Sprott in 2021 and went back to the day-to-day of being involved with Sachem Cove and had the good fortune of meeting Phil Williams and Marty Tunney and the rest of the team at Consolidated Uranium on an investor trip out to see White Mesa after they did the transaction with Energy Fuels.

And Mike and I had already been talking about the fact that the sector was really inflecting. This was in mid 2022, and it felt like utilities were coming back to market and contracting. The price had certainly not moved quite as much as it has now but the trajectory and the direction was where we thought we needed it to be to start seriously considering trying to take Premier public. 

We actually had a chance to tour around with the technical team at Consolidated, now IsoEnergy, and realized that we were at a huge disadvantage at Premier. We needed partners; we needed a team. And we looked at the transaction that now IsoEnergy did with Labrador Uranium and the way they spun that out and put a team together and really scaled Labrador off on the back of the IsoEnergy resources and immediately had a meeting of the minds with Phil and said, ‘That's the path for us!’

We were already an investor with Phil and had done a number of the transactions so we're very comfortable with the team. I don't think I could have picked a better platform to have joined forces with. 

The technical expertise that we get for the U.S. is just unparalleled given our size. And then, we get the capital markets expertise; we get the unbelievable IR and marketing resources. And so that visit out to White Mesa set us down the path on doing a transaction with IsoEnergy. 

They were going to spin out Premier and put in some of their U.S. assets and leases, and we included our Cyclone project from Wyoming and some claims that we have in Colorado. And that formed the basis of Premier American Uranium. And then, we did a financing in the summertime and were able to do a formal listing on the TSX-V on December 1st [2023]... and now we're off to the races.

Gerardo Del Real: Tim, that's an excellent, excellent overview. Can you walk me through the share structure? And then, obviously, we're going to talk about how you, Mike, and the team nailed the uranium call and where you see it going because I believe it's early innings of… we're using the baseball analogy… but walk me through the share structure because it's impressive, it's well-structured, it's tight. What does that look like, the major shareholders and market cap, as of right now?

Tim Rotolo: Sure, again, I don't think I've really highlighted this enough but when we set out to build this company, we looked at a lot of the other junior mining companies. Obviously, Sachem and Mike are investors in just about every company that has touched the uranium space in one way or another. 

We've done a number of financings. We've met pretty much every management team and looked at those companies and said: What are the things that we like about them… what are the things that we don't like… and let's really try and emphasize the things that are most important to us. 

And those were a long-term value orientation to management, highly-aligned shareholder base, and a focus on very disciplined capital allocation. And so that’s really the mantra of this business. When you look at our shareholders and the shareholder structure, that's one of the first things that we try to lead with.

So Sachem owns close to 45% of the company. We are very long-term oriented shareholders. IsoEnergy, as a result of the spinoff, owns about 13%. One of our large investors owns roughly 5%. And then, Mega Uranium also owns 5%.

About 28 million shares outstanding. As of today, the share price is about C$1.70. So that gets us to about a C$47 million market cap. We have about C$6 million of cash on the balance sheet as a result of our financing. And we just think we're really well positioned given where the market is. 

And obviously, we have just unbelievable firepower. We think we're in a really unique position in that we have existing cash on the balance sheet but we also have unbelievable partners behind this business. 

And so as we look to grow… and, really, the way that we think about growth is on two paths. One, is exploration and development of our existing assets. We have a drill program planned for Q2 of 2024 in Wyoming. We hope to have more to announce on our Colorado assets. 

And then, an aggressive M&A program because our central view is very much aligned with what IsoEnergy has been doing in that there is a need for consolidation. There's an even greater need for consolidation at the lower end in the U.S. And so, we want to scale up as quickly as possible and just continue developing our exploration assets at the same time. 

So having the backing of Sachem, IsoEnergy, and Mega Uranium is, I think, a real ace up our sleeve that a lot of our peers will not be able to compete with. And so hopefully that makes us that much more of an attractive acquirer to them.

Gerardo Del Real: I couldn't agree more. You clearly have the capital markets experience, you have the technical acumen, you have assets in a top-notch jurisdiction at a time where, geopolitically, is going to prove, I think, very, very strategically valuable. 

Clearly, you have a plan for M&A and growth. 

What do you see developing in the uranium space as it relates to supply demand and the spot price because I’ve got to believe that for you to be as aggressive as you are on the M&A front in looking for accretive transactions, that's got to be fueled somewhat by an optimistic view of where uranium is headed. And, obviously, with you and Mike and the team, you have your finger on the pulse as much as anyone out there.

Tim Rotolo: Absolutely. Listen, we wouldn't be doing this, and we wouldn't have such a large ownership position in the company if we didn't have a very optimistic view on supply and demand. And I actually think that's another differentiator. 

I'll go back to your specific question but I think when we look at how a lot of decision-making is done at our peer mining companies, not enough of it, in our opinion, is driven by supply demand modeling. And that has really been a hallmark of what Mike has built the reputation of Sachem on… is you gotta do the work and you gotta understand the math. 

The math just happens to favor a very large supply deficit today, which we believe means materially higher prices. And we think that that's in the offering soon. And so again, I don't want to put specific numbers on it but, directionally, we think the market needs to continue to move higher.

You now have this potential Russian ban out there, which is very positive for U.S. miners. And so we just think the backdrop continues to be incredibly supportive of businesses like this. And as we've always said about Premier, when we owned the company inside of our fund and it was private, we told investors there is a home for companies like this because the supply deficit is so large.

And so we continue to believe that intensely, and it's probably more true today than ever because building mines is challenging; mining uranium is a difficult business. And so we should not sit here and assume that a lot of these mines that many models have coming online are just going to come online that easily. I think there's going to be hiccups. 

We've already seen some hiccups this year around specific companies or specific jurisdictions. The world is going to need a lot of projects, and even smaller scale projects are going to be viable, particularly with uranium looking like it could stay higher for longer. 

This is not just a cyclical boom/bust. I’m not saying that this is a 20-year opportunity and that uranium prices are going to stay high forever. But it certainly feels like the structural deficit is here to stay for quite some time. And that should result in higher prices for longer than people are anticipating. And I apologize… I lost my train of thought.

Gerardo Del Real: No, that was a perfect answer. I know you didn't want to put a number as to how high you think uranium goes but clearly you feel it goes higher, and clearly you feel that the supply/demand fundamentals are as favorable as they've been for decades and possibly ever just looking back historically.

Tim Rotolo: Yeah, I absolutely agree with that. I think that the structural backdrop here is incredibly positive. And we've seen this really interesting — maybe not for those management companies whose stock has underperformed — but there has been a material underperformance of the smaller cap or really micro cap part of the sector. And that's another factor that gets us excited for M&A. 

There are companies out there whose stock has really not participated in a meaningful way, and I think they're probably a little bit tired and looking for paths to create value for their shareholders. And I think one of the easiest ways for them to do that is to partner with a company like ours that does have access to this capital markets platform. 

And, ultimately, the additional resources that we can bring to bear with our partnership with IsoEnergy just puts us in a really special position to be acquisitive today.

Gerardo Del Real: Well, listen, you're in the right jurisdiction, you have the right supply/demand fundamentals, you have past production, you have a historic resource base, your timing is right on point, and you have all of the capital markets experience to make it a really, really profitable couple of years for shareholders. 

Tim, thank you for your time. Anything to add to that?

Tim Rotolo: Yeah, I think your last point is maybe the thing that I want people to take away from our business. As CEO, I'm not taking any compensation, and Sachem owns 45% - 46% of the company. We have one North Star here, which is shareholder value creation, and we're going to use all of our knowledge of the sector to make sure that we're navigating the markets as effectively as we possibly can. 

And if there's a situation where we think M&A no longer makes sense, we're not going to do that. We're going to be highly disciplined in how we allocate the capital that's been given to us by shareholders. But just know that there's no one more aligned than our group alongside shareholders. And again, I just don't think many management teams out there can say that. 

And to your point, we've been fortunate to have timed this quite well, and we're going to try and maximize our position in the market and really try and grow this business as quickly as we can.

Gerardo Del Real: Tim, thanks again. Looking forward to having you back on in what appears to be a very, very busy 2024 for you and for shareholders.

Tim Rotolo: Yeah, I look forward to that.

Gerardo Del Real: Alright, cheers. Thanks again.

Tim Rotolo: Appreciate your time, Gerardo. Thank you.

Gerardo Del Real: Likewise.

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