Categories: Energy / General Market Commentary
Topics: General Energy / General Market Commentary

Top Ten U.S.-based mid-tier to junior companies, excluding coal and precious metals

The Northern Miner presents its top-10 list of U.S.-based mid-tier to junior companies, excluding coal and precious metals. 

1. Intrepid Potash

Market Cap: US$431.5 million

Intrepid Potash (NYSE: IPI)  is a diversified mineral company based in Denver, Colorado, that delivers potassium, magnesium, sulfur, salt and water products for the agricultural and oil and gas industries. It is the largest producer of potassium chloride, also known as muriate of potash, in the U.S. and owns three potash mines: Carlsbad in New Mexico, and Moab and Wendover in Utah. All three are solar evaporation mines. The company also operates an underground mine in New Mexico that extracts langbeninite, a naturally occurring mineral the company sells as Intrepid Trio.

During the second quarter the company generated net income of US$5.6 million, or US$0.04 per diluted share, due to higher realized prices and increased sales of by-products. Its potash segment generated US$8.2 million in gross margin during the quarter, a US$2 million improvement year-on-year.

In May 2019, the company completed its acquisition of the Dinwiddie Jal Ranch in the Northern Delaware Basin. The acquisition brings about 60,000 acres of owned and leased land in one of the most productive oil and gas basins in the world. It has also recently expanded its oilfield footprint on Intrepid South, teaming up with NGL Energy Partners in a joint marketing agreement of its water and jointly acquiring land in Texas for the development of produced water disposal facilities. Intrepid will be responsible for the development, transportation and sale of the combined water from the Intrepid South property and NGL’s neighboring Beckham and McCloy Ranches. The ranches service about 20 oil and gas operators in the Northern Delaware Basin.

2. Uranium Energy Corp.

Market Cap: US$177.6 million

Uranium Energy Corp. (NYSE-AM: UEC) is a U.S.-based uranium mining and exploration company. In South Texas, the company’s operations are anchored by the fully-licensed Hobson Processing Facility which is central to the Palangana, Burke Hollow and Goliad ISR projects. In Wyoming, the company controls the Reno Creek project, the largest permitted, pre-construction ISR uranium project in the U.S. Uranium Energy also controls a pipeline of uranium projects in Arizona, New Mexico and Paraguay, a uranium-vanadium project in Colorado, and one of the highest-grade and largest undeveloped ferro-titanium deposits in the world, in Paraguay.

In February 2019 the company received the Radioactive Material License for its Burke Hollow project from the Texas Commission on Environmental Quality. This license is the last of four major permits the company needed to extract uranium. In addition to the Radioactive Material License, Burke Hollow now has a 4,452 hectare mine area permit, approved in December 2016, two disposal well permits, issued in July 2015, and the aquifer exemption, issued in March 2017.

3. NioCorp Developments 

Market Cap: US$95 million

NioCorp Developments Ltd. (TSX: NB; US-OTC: NIOBF) is a U.S.-based company focused on developing its Elk Creek project in southeastern Nebraska, the only niobium/scandium/titanium project in North America. When in operation, the project is expected to be the sole producer of scandium oxide and a commercial version of niobium, known as ferroniobium, in the U.S., and one of only a handful of producers in the world of these critical and strategic materials.

The company released an updated final feasibility study on the project in April 2019. The study outlined a mine life of 36 years and average annual production of 7,200 tonnes of ferroniobium, 95 tonnes of scandium trioxide, and 11,642 tonnes of titanium dioxide. Total upfront capex for the project was pegged at US$1.14 billion with an after-tax payback period of 2.86 years. The project yields an after-tax internal rate of return of 25.8% and net present value of US$2.1 billion.

4.  Ur-Energy Inc.

Market Cap: US$88.8 million

Ur-Energy Inc. (TSX: URE; NYSE-AM) is a junior uranium mining company operating the Lost Creek in-situ recovery uranium facility in south-central Wyoming. The Lost Creek processing facility has a nameplate capacity of two million lb. U308 per year. The Littleton, Colorado-based company sold its first yellowcake from Lost Creek in December 2013 and since then has produced more than 2.46 million pounds of the material.

In early August the company confirmed that it had lowered its production estimates for Lost Creek in 2019 to between 50,000 and 75,000 lb. U3O8 and said it has reduced staff levels accordingly, Through June 30, it sold 362,500 lb. U3O8 at an average price of US$48.86 and for the full year expects to deliver a total of 665,000 lb. U308 related to term contracts at an average price of about US$48 per lb.

In addition to Lost Creek, Ur-Energy owns the Shirley Basin and Lucky Mc historic mine sites in the Shirley Basin and Gas Hills mining districts of Wyoming. Previous owners of the Shirley Basin project suspended mine operations in the 1990s due to low uranium prices. At the end of July, the company had unrestricted cash of US$6.1 million.

5 . Scandium International Mining 

Market Cap: US$30.1 million

Scandium International Mining Corp. (TSX: SCY; US-OTC: SCYYF) owns a 100% interest in the Nyngan scandium project, in New South Wales, Australia, about 500 km northwest of Sydney, and hopes to become the first company to achieve production from a primary scandium mine.

Scandium International completed a definitive feasibility study for the project in May 2016. The study concluded that the project has the potential to produce an average of 37,690 kilograms of scandium oxide (scandia) per year, at grades of 98.0%-99.9%, generating an after-tax cumulative cash flow over a 20 year mine life of US$629 million, with a net present value at a 10% discount rate of US$177.5 million and after-tax internal rate of return of 33.1%. The average process plant feed grade over the mine life is expected to be 409 parts per million of scandium. Capex of US$87.1 million could be paid back in about 3.3 years. The mine would use a conventional flow sheet, with high pressure acid leach (HPAL) and solvent extraction (SX) techniques.

The company also owns 100% of the Honeybugle scandium property, adjacent to the Nyngan project.

6. Azarga Uranium

Market Cap: US$23.60 million

Azarga Uranium (TSX: AZZ; US-OTC: AZZUF) is a uranium exploration and development company that has eleven uranium projects in the U.S. (South Dakota, Wyoming, Utah and Colorado) and in the Kyrgyz Republic. Its focus is advancing its Dewey Burdock project, an in-situ recovery uranium project in South Dakota, where it is working through the permitting process.

The project has already received its Nuclear Regulatory Commission License and draft Class III and Class V Underground Injection Control (UIC) permits from the Environmental Protection Agency, and the company is in the midst of completing other major regulatory permit approvals necessary for construction, including the final Class III and Class V UIC permits.

Azarga’s other assets are the Gas Hills and Juniper Ridge projects in Wyoming, the Centennial project in Colorado, the Aladdin deposit in Wyoming, four exploration projects in the U.S. and a 70% stake in the Kyzyl Ompul project in the Kyrgyz Republic.

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