Here’s a relevant fact: the Athabasca Basin is the world’s highest-grade uranium district. What does that really mean? The answer to that could not be simpler than the following: In the mining industry “Grade is King”. And in the world of uranium mining, the Athabasca Basin in northern Saskatchewan, is its undisputed ruler.
With an average grade of ~2%, it stands 20 times higher than the global average uranium grade, with 10 of the world’s top 15 highest grading uranium deposits located in the Athabasca Basin.
Let’s dive into this a bit more. Why is grade “King”? Because higher grades translate into higher margins, which in turn translates into higher values for that rock you will be pulling out of the ground. Which brings us to production. The region’s existing infrastructure, with ample power supply, operating mills and road access, offers the best infrastructure globally for “hard rock” uranium mining.
As has been mentioned, 15% of the world’s annual uranium production comes from the Athabasca Basin. A simple comparison to the Athabasca Basin for another commodity would be copper production in the country of Chile. At the current time, one out of every three lbs. of copper worldwide originate from Chilean copper mines. The fact Chile started out as a small copper producer in the first half of the 20th century only underscores the importance of the Athabasca Basin for the Canadian mining community, and its unique potential for exponential growth in an ever-expanding nuclear energy world.
Like other mining districts, the Athabasca Basin is divided in several sub-geographical clusters. The western Athabasca region mineral claims are clustered around the world class Patterson Lake South (PLS) discovery owned by Fission Uranium. Historically more capital has been spent on the east side of the Basin resulting in more discoveries. As a result, the west side holds much higher exploration upside potential. In fact, Fission Uranium just reported on September 25th the drilling of nine more high-grade holes at its PLS uranium project near the southwest rim of the basin.
Immediately adjacent to PLS is the Patterson Lake North (PLN) property which was staked by Fission in 2004 and became part of the Fission 3.0 Corp. portfolio in 2013. Fission 3.0 Corp. and Azincourt Uranium Inc. entered into a property option agreement for PLN in April 2013. With its proximity to nearby large and high-grade uranium deposits, prior promising drilling results and with multiple geological interpreted features, this could very quickly get very interesting for both companies (Fission 3.0 and Azincourt Energy).
Ownership Map Showing Uranium Deposits
Further to our PLN joint venture, our 25,000+ ha East Preston Uranium Project is also located in the southwestern Athabasca Basin. With drill plans taking shape for a 2018-2019 winter work program (permitting is already underway through TerraLogic Exploration Services of Cranbrook, BC), we are active on the uranium front at Azincourt Energy and are committed to building value in both the near and longer terms. I ask that you visit our website to learn more about our Patterson Lake North and East Preston JV projects, and our promising Escalera Group in Southeastern Peru.
On another note, many of you came to know Azincourt over the course of the past year as a lithium exploration company. The unprecedented run for lithium, the key component used for batteries in electric vehicles (EVs), has been severely decelerated by an apparent commodity oversupply, driving prices down by nearly half in China, a primary end user and influential buyer. The lack of sentiment has translated into a lack of speculative dollars, which typically drive bull cycles in the open markets.
However, this can change as quickly as it came to be, or as quickly as the lithium run started in the latter half of 2017. The fact is the global lithium-ion battery market is expected to grow at a compound annual growth rate (CAGR) of 13.7% between 2017 and 2022 due to its increasing adoption in electric vehicles and numerous consumer electronics such as smartphones, tablets, digital cameras and MP3 players, among others. Increasing demand for EVs and consumer electronics drives the lithium-ion battery market, with China remaining the largest market for EVs.
So where does that place Azincourt within this sophisticated supply and demand matrix? Fortune favours timing and preparation, and Azincourt stands ready and prepared for the renewal of the bull lithium market by continuing to add value to and de-risking it’s lithium assets on a continual basis. Sooner than later, the canary in the coal mine scenario will play itself out for the lithium market and Azincourt will once again be ready to benefit from that change of sentiment.
We believe our exposure to both the uranium and lithium sectors will provide multiple opportunities for significant growth in the coming months, and years ahead. We thank you again for your support and look very forward to your questions and comments.
Sincerely,
Alex Klenman
President & CEO
