Minesite Pt 118 May 2011 10:13
Share price strength in the uranium sector has been a little bit harder to come by in recent months, what with a general weakness in the equities market, downward momentum in the uranium price, and most significantly the problems at the Japanese plant at Fukushima. So it was nice to see one company bucking the trend last week in what was in any case a down week on the back of exploration news in the USA. VANE Minerals, as we reported in our weekly roundup, rose by 4.8 per cent to 2.75p. Not a rise that takes the company out of the 2p to 4p range that it’s traded in all year, but perhaps a pointer nonetheless to bigger and better things to come. VANE has a portfolio of 126 brecciated uranium pipes on state land in Arizona, and even more on harder-to-access federal land. It’s currently drilling eight targets in conjunction with joint venture partner Uranium One, and last week stated that its’ objective is to test 20 pipes within the next twelve months.
However, that wasn’t the only thing the company said last week. It also announced the commencement of drilling on a large copper porphyry target at Granite Gap in New Mexico. That news and the update on the uranium portfolio had been well flagged in London by a tour of investors and press undertaken by chief operating Kris Hefton the week before, so none of it came as any surprise to anyone. But what was it brought the buyers in? Probably a mixture of both. It must have been some comfort to investors when the Fukushima incident was at its height that VANE also has big upside in its copper portfolio in the south west of the USA, and that it has cash flow from a recently upgraded producing gold operation in Mexico. Nonetheless, for the time being at least, uranium is at the core of the company.
“The bottom line is that there’s still a shortage of production”, says Kris. “The Chinese moratorium on new nuclear power stations is over.” Fukushima may have been ugly, but it didn’t make the world’s shortage of power go away. And according to World Nuclear Association figures there are currently 50 new plants in development worldwide. That puts VANE in a strong position to feed local demand in the US. Its breccias pipes may be small, but there are a lot of them, and they should be very profitable to mine. Uranium One has already taken control of the first development project, which it plans to put into production soon, and there should be more to come.
Meanwhile, the company has also been cleaning house on its other uranium assets in northern Arizona. Some of these have been relinquished or placed on care and maintenance, but at North Wash VANE believes the presence of significant vanadium credits make a scoping study worth undertaking. This is scheduled to start during the second start of this year, and is fully funded.
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