The big news coming out of the uranium industry in central Wyoming this week is Canada-based Premier American Uranium Uranium Inc.’s preliminary findings of nearly 8 million to 12.6 million pounds of the critical ore in Wyoming’s Red Desert.
The find is significant because the ore is needed as fuel for nuclear reactors, a hot new market emerging in the United States as part of the energy transition from legacy coal-fired power plants to nuclear and alternative forms of wind and solar generating sources.
Premier American announced Monday that more exploration is planned over the next year on the Red Desert’s Cyclone project, which is about 12 miles west of Ur-Energy Inc.’s competing Lost Creek operation.
Premier American is being closely watched for several reasons as industry insiders say it could become a key investment vehicle in consolidating a fragmented market.
The confirmation of the exploration results is strategically important geographically to Wyoming’s uranium industry as more consolidation talk is emerging in the sector, meaning mergers and acquisitions and fewer — but larger — players. It’s an inevitable trend that happens when industries are in startup mode.
The state’s uranium industry has been moribund for decades but is finding new life as the United States weans itself off Russia for uranium supplies.
Backed By Big Money
Premier American also is worth watching because it is financially backed by powerful Wall Street interests.
Since becoming publicly traded in December, Premier American 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.
Premier American 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.
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 and U.S. efforts to become less reliant on the communist nation involved in picking a fight with Ukraine.
Michael Alkin, chief investment officer of Sachem Cove Partners, a hedge fund based in Garden City, New Jersey, confirmed that his hedge fund is among the largest investor in Wyoming’s uranium fields.
“It’s a good time to be investing in uranium and looking at Wyoming where opportunities abound,” Alkin told Cowboy State Daily.
Sachem, which invests in Wyoming’s publicly traded companies as a passive investor through its hedge fund Lloyd Harbor Capital Management LLC, has major holdings in top-shelf uranium companies in the state.
Millions Invested
Two of the investments are the only companies at the production stage of uranium mining in Wyoming: Ur-Energy Inc. and Uranium Energy Corp.
The Red Desert’s major uranium-producing mining operation is Ur-Energy, 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.
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 the Red Desert and development at its Shirley Basin mine in central Wyoming.
Uranium Energy, which had mothballed its uranium mining operations in Wyoming in a “care and maintenance status” nearly a decade ago, became the second major uranium producer in the state to restart mining and processing of the critical ore.
It reached that production milestone this month.
The mined ore, which is turned into yellowcake, is a vital component needed to make fuel for the nation’s nuclear power industry.
Uranium Energy’s first shipment of yellowcake is expected to happen in November or December.
Buying Picks Up
Alkin said in an interview Tuesday that his hedge fund began buying shares in uranium companies with Wyoming ties back in 2017 and 2018.
Today, Lloyd Harbor Capital has about 18.3 million shares of Ur-Energy Inc.; 758,000 shares of Energy Fuels Inc.; and 441,000 shares in Cameco Corp.
Since Aug. 1, Lloyd Harbor Capital added a new position of 1.18 million shares in Uranium Energy, and hundreds of thousands of additional shares with Energy Fuels and Ur-Energy.
“There’s a lot of potential in Wyoming,” Alkin said.
The new uranium investments for Lloyd Harbor Capital came after Aug. 1 when nuclear fuel operator Kazatomprom in central Asia lowered its uranium production expectations and investors began selling off uranium stocks.
This is when Lloyd Harbor Capital began buying, Alkin explained.
“The market reacted to headlines and not facts,” said Alkin, who sees strong demand for domestically produced uranium. “Aug. 1 was the day of reckoning when the market said, ‘Ready, aim and fire on uranium,’” he said. That’s when investors heard something and reacted to it. It was the wrong read.”
Pat Maio can be reached at pat@cowboystatedaily.com.
