Canada-based American Premium Uranium Inc. has begun exploratory drilling on mining claims in a 40-mile square area in central Wyoming’s Red Desert.
Since becoming publicly traded in December, American Premium has begun exploratory drilling work in the Red Desert and New Mexico. It also has made a strategic purchase of American Future Fuel, a move that helps to consolidate the company’s mining claims in uranium districts in three states in the U.S. West.
American Premium is backed by major investors like New Jersey-based hedge fund Sachem Cove Partners, which owns a third of the Vancouver-based company and has played a key role in carving it out from a larger player in Canada.
The refocused exploration firm has joined other players in the niche that are rushing along with other mining operations wanting to remove the critical ore from the arid land whose flagship city is Jeffrey City, a former uranium mining boomtown that went bust decades ago when the nuclear industry fizzed out in the late 1970s after the infamous Three Mile Island accident in Pennsylvania.
The industry is finding renewed life after the U.S. has taken steps to begin enriching its own nuclear fuel rather than buy from Russia. The U.S. wants to become less dependent on Russia following its invasion of Ukraine two years ago and growing jitters that Russia might cut off its nuclear fuel supply.
Uranium Mania
Sachem Cove Partners has been staking uranium land in Wyoming when the price of the critical ore on the spot market was around $20 a pound back in 2017, which has more than quadrupled in price since then — thanks to Russia’s dominance of enriched fuel.
“People were telling us we were nuts,” said Michael Alkin, chief investment officer of Sachem Cove Partners, a hedge fund based in Garden City, New Jersey. “We are glad we didn’t didn’t listen to them.”
The Red Desert’s major uranium-producing mining operation is Ur-Energy Inc., which recently raised $60 million in a public offering of stock to help pay for possible acquisitions of mining claims in the fragmented uranium industry and to ramp up development of mining projects.
Sachem Cove also owns about 25 million shares of Ur-Energy, according to Alkin.
Ur-Energy anticipates using some of the proceeds from the public offering of 57.2 million shares to supplement working capital for the continued ramp-up at its Lost Creek mining and production site in Wyoming’s Red Desert and development at its Shirley Basin mine in central Wyoming.
A Cyclone
Last month, American Premium Uranium began exploratory work on its Cyclone project, which is about 12 miles to the west of Ur-Energy’s Lost Creek operation, said American Premium CEO Colin Healey.
“We have two targets on this property that we’re going to spend about $2.3 million on between 2024 and 2025, drilling about 70 holes and do about 50,000 feet of drilling,” Healey told Cowboy State Daily.
“We have some historic technical work that suggests there’s somewhere between 8- and 12.5 million pounds of U308 (uranium ore) there,” he said.
Overall, the company controls a significant land position of about 25,500 acres of mineral rights within the western part of the Great Divide Basin.
“Our work is all exploratory right now,” Healey said.
Besides the Cyclone project, American Premium has prominent uranium-producing regions in the Grants mineral belt in northwestern New Mexico and the Uravan mineral belt in central Colorado.
Spin-Off Takes Off
American Premium picked up its Wyoming and Colorado uranium assets when it was created through the spin-off of those U.S. businesses from Consolidated Uranium Inc. in November 2023.
Sachem Cove, which owned uranium mining claims already in Wyoming and elsewhere along with other investors, combined its holdings with those that were brought under the umbrella of Premium American, which began trading publicly in December.
That spin off happened prior to Consolidated Uranium selling off near-term production assets to IsoEnergy Ltd. for $667.9 million, in December 2023. A Utah uranium mine went to IsoEnergy as part of the deal.
Essentially, the U.S. assets were spun off to Premium American with most of the international assets – except the Utah mine -- going to IsoEnergy.
Healey said that it’ll take two more years of exploration drilling to “define and delineate” the uranium resources at Great Divide Basin.
“If you find 8 million pounds, it might not be economic to build your own processing plant,” Healey said.
However, given that Ur-Energy has its Lost Creek processing plant only 12 miles away from American Premium’s find, it might make sense to take the ore to Ur-Energy for processing instead of building a new plant – unless the drilling shows that there’s upwards of 12 million pounds in the ground, he said.
“That’s the capability that they already have that we would be interested in, which could include contracting with them to process our ore or sell it to them or purchase the whole deposit from us,” he said.
Pat Maio can be reached at pat@cowboystatedaily.com.
