Jr. Completes Milestone For Optioning Athabasca Basin Uranium Project

Source: Streetwise Reports 12/10/2024

Mustang Energy Corp. (MEC:CSE) announced it has completed the first milestone in its option agreement with partner Skyharbour Resources Ltd. (SYH:TSX.V; SYHBF:OTCQX; SC1P:FSE) to acquire a 75% interest in Skyharbour’s 914W Uranium Project in the Athabasca Basin. One analyst says there is “renewed optimism” in the sector. Read why.

Mustang Energy Corp. (MEC:CSE) announced it has completed the first milestone in its option agreement with partner Skyharbour Resources Ltd. (SYH:TSX.V; SYHBF:OTCQX; SC1P:FSE) to acquire a 75% interest in Skyharbour’s 914W Uranium Project in the Athabasca Basin.

Mustang made a cash payment of CA$15,000 and issued 93,750 of its common shares at CA$0.32 per share on November 27 to Skyharbour and now “holds the sole and exclusive right and authority to manage and carry out work programs on the 914W Project,” according to a news release issued by Mustang.

Skyharbour has 29 projects in the Athabasca Basin, 10 of which are drill-ready, covering over 1.4 million acres of mineral claims. In addition to being a high-grade uranium exploration company, it also utilizes a prospect generator strategy by bringing in partner companies like Mustang to advance its secondary assets.

Skyharbour now has 10 partner companies advancing 14 projects in their portfolio, with project considerations totaling over $90 million, assuming that these partner companies complete their full earn-ins at their respective projects.

Skyharbour “has one of the largest portfolios among uranium juniors in the Athabasca Basin,” according to Analyst Sid Rajeev of Fundamental Research Corp. in an updated research note on November 29.

Rajeev said the power needs of artificial intelligence (AI), have “renewed optimism in the uranium sector.”

“Tech giants like Google (NASDAQ: GOOGL), Microsoft (NASDAQ: MSFT), and Amazon (NASDAQ: AMZN) have recently signed nuclear power deals to secure sustainable energy supply for their expanding data center operations and AI initiatives,” the analyst noted. “The rising demand for uranium, coupled with the highly vulnerable supply chain, particularly with Russia accounting for 35% of global enriched uranium production, has fueled renewed optimism in the industry. As a result, we anticipate a significant increase in M&A activity within the sector in 2025.”

Mustang Sees ‘Substantial Potential’ in Project

Mustang is actively exploring properties in the Athabasca Basin, including its flagship property, Ford Lake, which covers 7,743 hectares in the prolific eastern basin. Its Cigar Lake East and Roughrider South projects span 2,901 hectares in the Wollaston Domain, which also contains 914W. Mustang has also established its footprint in the Cluff Lake region of the Athabasca Basin with the acquisition of the Yellowstone Project and further expanded its presence in the south-central region of the Athabasca Basin with the Dutton Project.

The 914W project consists of one mineral claim of about 1,260 hectares about 48 kilometers southwest of Cameco Corp.’s (CCO:TSX; CCJ:NYSE) Key Lake Operation, “offering excellent logistics and access via Highway 914,” the release said.

Its location in the Western Wollaston Domain is “known for unconformity-related and pegmatite-hosted uranium mineralization,” Mustang said in the release.

The project hosts favorable geology with local graphite bearing assemblages, according to the release. Immediately to the north of 914W is the Scurry Rainbow Zone E and the Don Lake Trenches, where up to 1,288 ppm uranium (U) was encountered in a drill hole and surface prospecting revealed up to 0.64% U3O8 in a trench at Don Lake Zone E.

“While historical exploration conducted several geophysical and geological surveys over portions of the property, most of the 914W Project remains under-explored,” the company said. “Mustang sees substantial potential for advancing uranium and rare earth element exploration on the 914W Project.”

Mustang must still make cash payments of CA$260,000, issue shares worth CA$450,000, and spend CA$800,000 on exploration at the site over three years to exercise the option in full. Skyharbour also will retain a net smelter return royalty of 2% and Mustang can repurchase one half of that for CA$1 million.

The Catalyst: ‘Uranium/Nuclear Power Is BACK!’

According to a Kitco report, uranium prices have fluctuated widely this year, from above US$100 per pound in February to below US$80 at the start of November. The price was US$76.40 on Tuesday.

In the Kitco report, Scott Melbye, executive vice president of Uranium Energy Corp., cited a growing acceptance of nuclear power and the need for new uranium mines to meet increasing demand in his prediction that uranium prices will reach three-digit figures again in 2025.[OWNERSHIP_CHART-6026][OWNERSHIP_CHART-11203]

“Expect uranium prices to remain high and probably increase much more from where they are today,” Melbye told Kitco. “I won’t predict how high the uranium price goes next year, but it has one in front of it. So, it is a three-digit [price tag].”

The growth of AI and electric vehicles (EVs) during the energy transition is contributing to new attitudes toward nuclear energy and uranium. Microsoft Corp. (MSFT:NASDAQ) announced a deal with Constellation Energy Group (CEG:NYSE) to restart and buy all of the power from one of the shut-down reactors at its infamous Three Mile Island plant in Pennsylvania and the Biden administration also announced a plan to restart the Palisades plant in Michigan.

Chris Temple, publisher of The National Investor, recently noted that with the Three Mile Island deal, “uranium/nuclear power is BACK!”

“I’ve watched as the news has continued to point to uranium being in the early innings of this new bull market,” Temple wrote. “Yet the markets have been yawning . . . until now.”

Ownership and Share Structure

Management, insiders, and close business associates own approximately 5% of Skyharbour.

According to Refinitiv, President and CEO Trimble owns 1.6%, and Director David Cates owns 0.70%.

Institutional, corporate, and strategic investors own approximately 55% of the company. Denison Mines owns 6.3%, Rio Tinto owns 2.0%, Extract Advisors LLC owns 9%, Alps Advisors Inc. owns 9.91%, Mirae Asset Global Investments (U.S.A) L.L.C. owns 6.29%, Sprott Asset Management L.P. owns 1.5%, and Incrementum AG owns 1.18%, Reuters reported.

There are 182.53 million shares outstanding with 178 million free float traded shares, while the company has a market cap of CA$68.45 million and trades in a 52-week range of CA$0.31 and CA$0.60.

According to Refinitiv, about 0.21% of Mustang is owned by Insiders and Management, and the rest is retail. Top shareholders include Toby Lim with 0.21%.

It has 48.08 million shares outstanding, 47.98 free floating shares, and has a market cap of CA$16.12 million. It trades in a 52-week range of CA$0.15 and CA$0.50.

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1. Skyharbour Resources Ltd. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Cameco Corp.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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( Companies Mentioned: MEC:CSE, SYH:TSX.V; SYHBF:OTCQX; SC1P:FSE, )

Source: https://www.streetwisereports.com/article/2024/12/10/jr-completes-milestone-for-optioning-athabasca-basin-uranium-project.html