Uranium Royalty Corp (TSXV: URC) is looking to take control of the uranium it is entitled to under a royalty agreement with Orano Canada for the McArthur River Mine in Saskatchewan. The firm this morning indicated it is looking to take physical possession of the uranium, rather than receive funds from the sale.
Justifying the decision, Uranium Royalty indicated that taking possession of the physical uranium will allow the firm to “control the sale of the attributed pounds in a disciplined, yet fully unhedged manner.”
“By electing to receive physical uranium under this royalty interest, URC provides shareholders with unhedged exposure to future uranium price upside. In addition, it represents pounds sourced from a geopolitically stable jurisdiction, in one of the world’s premier uranium mining districts, by an operator with an outstanding safety and environmental record,” elaborated Scott Melbye, CEO of URC.
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Uranium Royalty currently holds a 1% gross overriding revenue royalty on a 9.063% share of uranium production at the project, which it is privy to via Orano’s 30.195% interest in the project. The projects operator and major owner, Cameco Corp (TSX: CCO), announced earlier this month that the first ore from the mine had been milled and packaged at the Key Lake mill, following a mine restart earlier this year. The mine is expected to scale up to produce 15 million pounds of U3O8 annually in 2024. Production for 2022 meanwhile is estimated at 2 million pounds.
Separately, the company also revealed that it has purchased a sliding scale 10% to 20% NPI on a 7.5% stake of uranium production at the Dawn Lake project lands for US$100,000. The property is currently an early stage development project, holding a mineral resource of 17.9 million pounds of indicated resources.
Uranium Royalty last traded at $3.71 on the TSX Venture.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
