Shares in thinly traded microcap uranium explorer Alligator Energy (ASX:AGE) were up 1.7% in the first half hour of Friday trade per CBOE live pricing as the company kicks off drilling on-site its South Australian project.
Probably keeping investors cautious is that the company is only conducting a stratigraphic drill run at this early stage of things – in other words, they’re drilling to make sure geophys data is correct.
The drilling program will centre itself on the company’s EL6367 permit which the company considers the “core” of its project.
Privately held Wallis Drilling will sink up to 40 aircore holes on-site with an average depth of 150m towards corroborating the reliability of existing datasets.
However, investors won’t actually get those assays back until at least August, if not then, September – not as bad as the assay laboratory delays in the height of COVID but still, perhaps not soon enough to get risk-off mindsets churning.
That said, uranium prices on the NYMEX remain at historically high levels, even after falling to US$90.xx/lb – an increase of 70% YoY. The price hit US$105/lb in January, unleashing upon the earth a green glowing bull.
(As far as this journalist is persuaded, copper has since replaced the void uranium left when it fell back below US$100/lb.)
If you’re looking for who to blame for that decline, blame Canada.
The initial increase in uranium prices was driven largely by output issues in Kazakhstan (as well as the US Russian uranium ban legislation) but Canadian Cameco threw a bit of a wet blanket when it announced it would massively boost supply this year.
Speaking of Kazakhstan, Alligator Energy CEO Greg Hall had it on the brain on Friday.
“While at a very early green-field stage of the exploration/resource pipeline, all the signs are there that this has the potential to be a uranium-bearing basin following the Kazakhstan model,” Hall said.
“We are very pleased to begin this long-awaited program and are fully appreciative to the Traditional Owners and other Stakeholders that have facilitated access.”
AGE last traded at 6cps.