RE: New Premium Article23 Jan 2025 08:34
Brewer is hoping Neo can tap into this thriving market, especially while the metal’s price is running hot. It has a good chance of doing so. From Beatrix 4, mined by Sibanye-Stillwater for its gold, Neo will have access to Beisa, a major uranium resource once explored and pre-developed by Gencor in the early 1980s. Brewer says 2.5t of the Beisa reef is “stopeable”, or ready to mine, containing 400,000oz of gold and 5-million pounds of uranium.
Prospective lenders have rushed to help finance Beisa, says Brewer. “One group, a listed uranium fund, is just purchasing physical [uranium], so they are trying to get in early,” he says. About $50m has been offered in a royalty stream or a prepayment of cash. In return for $25m the lender gets 25,000oz of gold, which is a fraction of the 5.4-million ounce resource base at Beisa. The balance is for the uranium.
Aside from political pressures, the fundamental supply/demand drivers in uranium make for a fickle market. Brewer acknowledges it’s a “crazy market”. This is partly due to stockpiles held by US utilities. “Flow from stockpiles is a feature of this market; no other commodity trade’s total supply is so dependent on its inventories,” Tom Price at Panmure Liberum told the Financial Times in November.
Brewer says, however, that while Neo has a degree of protection from the spot price market owing to gold accessible from the Beisa/Beatrix reef, “from a pure uranium point of view, when you take the gold credits from an indicative, high-level cash flow analysis, operating costs net of gold byproducts is a negative $15/lb”.