New Pure-Play US Uranium Opportunity & How to Position Early

The uranium space looks like a coiled spring ready to surge higher. We’ve had hints of that recently with the spot price now closer to $60/lb than $50/lb which is why I believe Consolidated Uranium’s (TSXV: CUR)(OTCQX: CURUF) proposed spinout of non-core but very attractive assets is timely and will prove profitable. 

I caught up with the chairman and CEO of Consolidated Uranium, Phil Williams, and the planned CEO of Premier American Uranium, Tim Rotolo, which is going to be a new pure play US uranium company. I hope you’ll find the interview insightful. 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the chairman & CEO of Consolidated Uranium, and the planned CEO of Premier American Uranium, which is going to be a new pure play US uranium company. 

Gentlemen, we spoke a bit off-air. I mentioned that the timing, I believe, couldn't be better. How are each of you doing? Phil, I'll start with you.

Philip Williams: Yeah, doing really well and certainly it's great to see the action in the uranium space for our company who has been in it for three years now. We've been waiting for this moment and knowing that it was coming but it's just nice to finally see it on the tape. And I think it's only going to get more interesting from here.

Gerardo Del Real: Tim, I'm excited to have you on. You are new to our audience. I'm familiar with your pretty extensive background. But for those that may not be, could you give us just a brief primer on your background here?

Tim Rotolo: Yeah, absolutely. So I am one of the co-founders of a uranium-focused strategy that started in 2018 called Sachem Cove. Sachem Cove will be the largest shareholder of the fund. 

I'm sure many of your readers and listeners are familiar with my partner, Mike Alkin, who's been quite a prolific speaker from 2017 onwards about the opportunity. And I was also one of the architects of URNM, which was sold to Sprott after going from zero to a billion dollars from late 2019 to 2022.

Gerardo Del Real: Good return on capital, by the way. Zero to a billion dollars is a fantastic return.

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Tim Rotolo: Yeah, and I think the big takeaway and the most important aspect for us — and this is the same mentality that we have about Premier American — is we made a lot of money for the people who invested in that fund. So the performance of the fund was great, and hopefully that's why Sprott was attracted to it. 

Our objective is we're putting our money where our mouth is, and we always want to have skin-in-the-game. That's why we'll be the biggest shareholder of this company and continue to do so for a long time because we believe in this story and we believe in the United States as a real potential producer for uranium.

Gerardo Del Real: Tim, once upon a time, the US was a pretty significant player in the uranium space. That, along with the bulk of our critical metals capability, went out the window decades ago. But there seems to be a resurgence, not just in chatter but with real capital coming into the US from both private parties and government agencies. 

And so when I tell you that I think your timing is spot on — and I'm very familiar with Mike; we've chatted in the past and in his skillset; I'm familiar with your skillset — you are actually positioned and set up beautifully to take advantage of what I think is going to be one of the best, if not the single best, uranium bull markets we've seen specifically here in North America. 

Can you speak to the opportunity from a macro perspective here in North America with uranium?

Tim Rotolo: Sure, and we agree with you. So from that perspective, I think I'm preaching to the choir a little bit… but as far back as 2017, Mike is on record talking about how the US nuclear power industry was basically beholden to Russia and Soviet Bloc fuel sources. So that could be Kazakhstan… that could be Uzbekistan and Russia. 

And it's taken a while for that to actually come to full fruition. But in the meantime, US domestic uranium production has gone to effectively zero at the same time where nuclear power continues to be roughly 20% of electricity generation in the United States. 

So we just felt like that disconnect was way too significant. But all of a sudden, we started to see a real resurgence in interest in resource nationalism but also bipartisan support for nuclear power and domestic mining. The Strategic Uranium Reserve is a great signal to us about the seriousness of the United States government supporting domestic uranium production.

And so we just think the company is really well-positioned to be able to take advantage of that. And at the highest level, I think one of the big hallmarks of Sachem Cove and Mike's work has been the macro supply-demand work. And our view has always been, if you don't get that right, nothing else matters, right? 

So the fundamental thesis from the day Mike started building a supply-demand model was that there is a huge deficit. You need materially higher prices. We think that equation has only worsened. 

So you need even higher prices today because of inflation and because of lack of production. And the timelines have been extended to actually put these assets into production. Not only do you need higher prices, you're going to need every pound you can get your hands on, which puts the US in play. 

Historically, people would say, ‘Oh, McArthur River will fill the gap. Paladin, NexGen, and Denison will be there to save the day. Or Kazatomprom will save the day. They'll just double production out of the blue as if that's easy for them to do.’ Well, the Chinese have effectively taken that option off the table for Western utilities. 

NexGen and Denison, while they're progressing their projects, and they're fantastic projects, the deficit is still far larger than they can help to fill. So you're going to need these smaller producers in the United States. And so there's a home for a company like a Premier American. It's a little niche but we think there's tremendous opportunity and we think many of these companies are not priced for that eventuality.

And that's what gets us excited. We're always looking for the dislocation within the themes. And we saw this in 2018. We were approached by a group that had a technical report from the last cycle. They had some drill results. We loved the fact that that increased the probability of this exploration project and reduced the risk. 

And so we've sat on it, effectively, since 2018 when we staked the land and had an opportunity to go out and meet with Phil and his team when they did their deal with Energy Fuels and felt like the template they used for Labrador Uranium would be a perfect one to bring a new pure play opportunity to the US. And so that's what we did.

Gerardo Del Real: Phil — and I speak as a biased shareholder — from a Consolidated Uranium shareholder's perspective, tell me the benefit of this spinout, and tell me where I should be smiling? 

It's obviously a softball question because I'm happy to see focus on the assets that are now going to see a lot more attention than they otherwise would have. But for those that maybe don't follow Consolidated Uranium and the non-core portions of the portfolio, can you speak to that a bit?

Philip Williams: Yeah, absolutely. And you nailed it. So these projects, and just to take a step back, when we entered the US with our seminal transformational acquisition of the projects in the US from Energy Fuels, we picked up a portfolio of projects. And the projects that we are focusing on are the ones in Utah. 

These are past-producing mines, fully-permitted to go back into production very, very quickly. And that's Tony M, Rim, and Daneros. And so we're spending the bulk of our time as a company and capital advancing those projects. And whether that's drilling  — and we're going to have some drill results out from two of those projects relatively shortly here — we're working towards PEAs and economic analyses of these projects. That's been ongoing. 

As part of that package, we picked up these very interesting Department of Energy leases in Colorado. And these projects have a history of production and historic resources identified and verified by the Department of Energy. But those projects have been sitting in the back of our portfolio. And we have a very large portfolio; a globally significant resource base. 

And as a company, we're always looking two or three steps ahead as to how to realize value from those assets. And we could have done it internally or done it through this divestiture spinout process. And so those projects needed attention, and we looked at spinning assets out similar to what we did with Labrador Uranium: how do we do one-plus-one equals something much greater than two? And that's really where Tim and Mike came in. 

And so the project that Tim is referring to with the historic drilling and the technical report that shows very significant uranium exploration potential, that project is in Wyoming. They also have their portfolio projects in Colorado, which fit hand and glove with our projects.
I encourage you or your listeners to go onto the website and look at some of those maps, and you can see just how these projects fit together in prolific parts of the Colorado Uravan Mineral Belt where millions of pounds of uranium has been produced before. 
And by the way, we've also picked up some additional ground in and around those projects. But when you put it all together, it's one of the largest land positions in Colorado. 

And further, partnering with Tim and Mike, who have a tremendous understanding of the macro, this view of the US uranium, which we also share, of course, and the ability to access capital through their networks (and also capital through our networks), it’s just a perfect marriage. And these projects will start to get the attention they deserve.

And CUR will remain a shareholder. So we're doing it a little bit differently this time. The shares that CUR is getting in PUR, we're going to distribute a portion. So roughly half of the shares will go directly to CUR shareholders. So everyone will get direct exposure to that. 

But we're going to hold some back because we also really believe in this company, this opportunity in the future, and we're going to stand behind it and support it all the way along.

Gerardo Del Real: Tim, what comes next?

Tim Rotolo: So we've been spending a lot of time talking with investors and folks like yourselves, trying to get this story out there. And our intention is to begin a capital raise in the next week or so and capitalize the company to be able to be very opportunistic but also to focus on the Cyclone Project in Wyoming and begin really trying to do some confirmatory drilling. 

You can go on our website and take a look at the presentation. We have a nice slide about Cyclone, and we think there are some really interesting anomalies that we've identified through some airborne geophysical surveys we did prior to the merger. 

So our goal is to go out and do some more work on that project and begin advancing all of these projects… and the goal of advancing towards a listing in the late-August, early-September timeframe, we think, should set up really well for the overall market.

Gerardo Del Real: I couldn't agree more. We'll have a conversation off-air about that capital raise. I would love to participate. I think, again, your timing is perfect. I love the jurisdictions that you're working in. I think the human capital is top-notch over there with yourself and Mike and the team. 

And I think it's going to be a fun, fun second half of this year and a spectacular 2024 for all of us uranium bulls. Anything to add to that, Phil?

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Philip Williams: I just think you're absolutely right. And just to echo Tim's point, getting public in late-August, early-September, I think, is going to be unbelievable timing for it. We're already seeing it in the market today. 

And I think if you blink on this space, you're going to miss what is going to be a very substantial move akin to what we saw in that ‘05, ‘06, ‘07 timeframe where tremendous returns were made for investors that got in early.

Gerardo Del Real: Look, we've seen it recently with lithium. We saw it in 2010-11 with rare earths. I think we're in for another one of those manias… this time in the uranium space that's going to make a lot of people a lot of money if they're positioned early and are willing to be patient. Gentlemen, thank you for coming on. Tim, anything to add to that?

Tim Rotolo: We've continued to believe that there's a fantastic risk/reward in this sector; very asymmetric, particularly now given the dislocation between where the equities are relative to the fundamentals and spot. And I think that dislocation is probably at the widest margin it's been for quite some time. 

So I totally agree with both you and Phil. And one of the things that we've always tried to tell investors is that this is a market that’s very difficult to time. You have to be there. You have to be really patient and you have to be very focused on where your exposure is coming from. Is that juniors… is that producers… is it physical? 

Obviously, we're big believers in having some diversification. But we do think there's a very interesting little niche opportunity developing in the United States because of a lot of the geopolitics that are driving domestic production interest in the US.

Gerardo Del Real: Looking forward to watching you and the team execute. Phil, likewise with Consolidated. Gentlemen, thank you so much for your time today.

Tim Rotolo: Really appreciate your interest and your time.

Philip Williams: Thanks, Gerardo. Great talking!

Tim Rotolo: Thank you.