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Koba Resources (ASX:KOB) jumped 20% in the second hour of trades on Tuesday as the company flagged the results of its latest uranium-containing rock-chip-hunting campaign – which resulted in one sample grading over 7%, or, more than 70,000ppm.
There’s been a lot of rock-chip news from explorers lately – more than what was the case six months ago, which you’ll just have to take my word for (I read a lot of announcements in this line of work).
I presume because it’s cheaper than drilling as inflationary pressures remain a headwind for explorers.
Rockchip-based announcements can be dicey, given surface mineralisation (rockchips) does not really indicate whether or not a mineral system exists underground nearby. It’s not unheard of, and it feels intuitive, but it isn’t guaranteed that one predicts the other.
Of course, not all rock-chip samples are equal.
Koba has revealed it found one rockchip on-site its Harrier Uranium Project (HUP) at over 7.4% uranium, which is definitely an eye-catcher – especially for a mineral that tends to be reported in far smaller concentrations.
The company actually found two samples at over 7% (70,000ppm for those who prefer parts per million) and another five samples assaying at over 30,000ppm for grades >3%.
Perhaps unsurprisingly, shareholder enthusiasm for the stock and its 489sq.km “underexplored” project has been risk-on in Tuesday morning trades.
It’s also no surprise geotechs at Koba are now moving ahead towards a follow-up program intended to replicate those results towards the end-goal of securing a drill target (lest the company jump straight there.) Planning is underway.
That could be good timing.
Elsewhere, analysts at Citigroup have been predicting a likely recovery in uranium prices.
The nuclear feedstock clocked over US$100/lb earlier this year on news Kazatomprom’s production would be hindered, pushing uranium to an all-time-high if you ignore an outlier price spike in the mid-2000’s.
Then another juggernaut uranium miner, Canada’s Cameco, announced it would boost production and that helped push uranium prices back down below US$100/lb.
Since then Kazatomprom has since come out and said its production issues aren’t going to be as bad as first though, leading to more volatility – but nowhere near as pronounced as what Cameco’s production boost did to prices early 2024.
Now, Citigroup sees nuclear energy demand continuing strong into 2025 and beyond, a demand that will outpace supply (China’s economic woes notwithstanding.) This fundamental driver, Citi adds, isn’t being reflected in prices due to low trading volumes.
Citigroup analysts see physical uranium prices returning to US$100/lb across 2025 (as an average.)
KOB last traded at 15cps.
