In December, Blue Sky Uranium Corp. (BSK:TSX.V; BKUCF:OTC; MAL2:FSE), an Argentinian uranium and vanadium exploration company, announced the closure of the oversubscribed second and final tranche of a non-brokered private placement. This included 381,000 units at a price of CA$0.10 per unit for gross proceeds of CA$138,100.
Blue Sky is a uranium discovery company, located in Argentina. The company's flagship Amarillo Grande Project was an in-house discovery of a new district that hosts the largest NI 43-101 uranium resource in the country with an initial Preliminary Economic Assessment.
Why Uranium?
Uranium is an element primarily used in nuclear energy. Because of its radioactive properties, it can manufacture a tremendous amount of emissions-free energy. It is also considered more reliable than other emissions-free energy sources such as wind and solar. As for people's opinion of uranium, the outlook for the element has only improved and seems to be on the up-an-up.
There has recently been a massive push toward green energy. In August, Japan's prime minister announced they would restart more idled nuclear plants and look at developing next-generation reactors. At this announcement, Forbes reported, "The Global X Uranium ETF surged 11.5%."
Also, in October 2022, the Biden administration reported they would be providing US$150 million to improve nuclear research and development infrastructure at Idaho National Laboratory as a part of President Biden’s Inflation Reduction Act.
This, of course, leads to more uranium demand and has now led to Stockhead asking if uranium’s ‘lithium-like’ breakout will happen in 2023.
In light of this and the recent news with Blue Sky, we at Streetwise Reports sat down with President and CEO Nikolaos Cacos, M.I.M., to tell us a little bit more about the history of Blue Sky, the company's mission, and where it sees itself headed in 2023.
What Makes Blue Sky Unique?
I asked Cacos what makes Blue Sky different from other uranium companies.
He told me, "With Blue Sky, it's not a typical exploration company; it's different. Because we don't have a single piece of property with a single deposit that we're looking to develop. Instead, we uncovered an entire new uranium district. It's an enormous district, almost 150 kilometers long by 50 kilometers wide, with 300,000 hectares of property contained in that. So it's absolutely it's gigantic by any measurement. And what makes it interesting is that this district — besides having the potential to find multiple more deposits because it has similar geological similarities to those uranium districts in Kazakhstan — is that these are some of the largest and lowest cost-producing uranium districts in the world."
Cacos also touched on how most investors do not know the potential for uranium production in Argentina.
Argentina has been in the nuclear business for a while, with its first commercial nuclear reactor beginning operations in 1974. Cacos believes this is key to Blue Sky's success.
He said, "it makes it easy to work there. Because all the rules and regulations for handling uranium or potentially radioactive materials are in place. The second thing, of course, is that when we reach the point where we wish to make a production decision, we don't have to wait for the government to debate and implement new rules. And with Argentina being a nuclear country, they have a need for uranium to supply their nuclear reactors. And currently, the imported oil they buy it from mostly from Kazakhstan. Having a domestic source of uranium may allow us priority to be able to sell to the Argentine government. So it's kind of like a ready-made business opportunity."
Upcoming Plans
With that in mind, I went on to go over Blue Sky's objectives for the up-and-coming year.
Cacos said, "our objective here is to continue to explore and to develop the uranium potential in this district and to grow it as much as we can."
He told us that this is the largest and most advanced deposit in Argentina, with just under 23 million pounds of uranium and 11 and a half million pounds of vanadium.
Blue Sky originally did a preliminary economic analysis (PE) rather early because they wanted to demonstrate that this was a low-cost-high-potential project. You can see the original PE published in 2019 here.
Cacos commented on the 2019 PE, saying, "it showed that if it was in production, Ivana would rank amongst the lowest-cost producers in the world."
Updated PE
However, now they are updating this PE for a couple of reasons.
First, the company has completed additional drilling, both wishing the deposit and step out drilling, and it has encountered uranium at every turn, leading the company to believe it can upgrade the quality of the resource and go from inferred to measured and indicated.
Second, Blue Sky is locked into the shifting uranium market.
Cacos said, "I think for the PDA, we used a US$50 price for uranium. Most companies now use US$65, a US$15 difference on 20 million pounds can have a substantial impact on the valuation of over deposits. So we want to ensure that when we're talking about our event and our potential economics, that the numbers that we're using are all up to date incurred in today's date."
Possible Additional Deposits
Blue Sky's scouting team has also identified at least five other uranium exploration targets within a 30-kilometer radius. The company hopes to discover additional uranium deposits within a 2030km radius. That way, it would keep capital costs lower.
Cacos went on to say, "I think we're at a potential inflection point in terms of the valuation of the company; we've got an asset right now with a deposit. As we drill out additional areas and we come back with positive results, I think the valuation of the company can change substantially. And I think from an investment point of view, it's the most exciting time to be to own shares because potentially that's where they can grow."
New Drilling Projects Initiated at Amarillo Grande
Blue Sky Uranium anticipates the exploration of two previously unrefined targets within its proprietary Amarillo Grande Project. Field exploration is set to begin in the Cateo Cuatro zone of the project, and more advanced drill testing is slated to start in its Ivana East zone, with both sites breaking ground by quarter two of 2023.
Fundamental Research Corp. analyst Siddharth Rajeev identifies the two sites’ combined "potential for resource upgrade/expansion” as a catalyst, noting each deposit’s proximity to the "near surface (within depths of 25m)” as a "major advantage” to the efficiency of Blue Sky Uranium’s extraction process.
Share Structure
Blue Sky Uranium has a market cap of CA$21,000,000 and 199.69 million shares outstanding. It trades in the 52-week range between CA$0.0611 and CA$0.2687.
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Disclosures:
1) Katherine DeGilio wrote this article for Streetwise Reports LLC. They or members of their household own securities of the following companies mentioned in the article: None. They or members of their household are paid by the following companies mentioned in this article: None.
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