Source: HoldCo Markets 08/26/2024
Highlights of this story include the explorer's clear path to owning an existing resource, the deposit's characteristics and the project's exploration upside, noted a HoldCo Markets report.
Tisdale Clean Energy Corp. (OTC: TCEFF) garnered the attention of HoldCo Markets, which initiated coverage on it with a CA$0.13 per share price objective, reported HoldCo Markets in an Aug. 22 research note.
"Our positive thesis is underpinned by the earn-in potential for as much as a 75% interest in the South Falcon East property" HoldCo wrote.
Tisdale is working toward an earn-in of this uranium-thorium project in the periphery of Saskatchewan's Athabasca Basin, pursuant to its 2022 agreement with the project owner Skyharbour Resources Ltd. (OTC: SYHBF) Tisdale may earn 51% by 2026 for about CA$11 million (CA$11M), of which it is to spend CA$5.5M on exploration at South Falcon East, and 75% by 2028.
117% Uplift Possible
Tisdale is currently trading at about CA$0.06 per share, noted HoldCo, whose price objective on the uranium explorer indicates a potential return for investors of 117%. Higher uranium prices would benefit the stock further.
"From our conservative base US$4.50 per pound in situ valuation for the current Fraser Lakes B deposit, every about US$0.50 per pound increase to the valuation metric translates to a net asset value uplift of about 15%" the investment firm wrote.
Resource Sets Company Apart
HoldCo presented the factors making Tisdale an attractive investment opportunity.
One is that South Falcon East has an existing resource, thereby differentiating Tisdale from its peers, HoldCo highlighted. The resource, encompassing only the Fraser Lakes B deposit at the property, has an NI 43-101-compliant Inferred resource of 6,900,000 pounds (6.9 Mlb) of 0.03% U3O8 and 5.34 Mlb of 0.023% thorium dioxide (ThO2).
The resource does not include results of drilling by both Skyharbour and Tisdale, noted HoldCo.
Characteristics of Deposit
The grade of the Inferred resource, 0.03% U3O8, HoldCo wrote, is lower than the roughly 2% U3O8 average grade of any deposit in the Athabasca Basin but "should not be discounted." Similar or lower grades are found at various uranium projects in the U.S., restarted in the past year using in situ recovery, and at some of the world's largest open-pit uranium mines, like Rossing and recently restarted Langer-Heinrich, both in Namibia. The global average uranium grade is lower at about 0.018% U3O8.
"Though the South Falcon East deposit happens to be on the periphery of the Athabasca Basin, the low-grade nature of the deposit doesn't negate the future potential to mine it economically" HoldCo Markets wrote.
South Falcon East's close proximity to infrastructure may also improve the project's economics, added the investment firm. In the area are Skyharbour's Moore Lake project, Cameco Corp.'s (NYSE: CCJ) McArthur River mine and Key Lake mill, and Orano SA and Rio Tinto Plc (NYSE: RIO) projects.
Also notable about the South Falcon East project, HoldCo pointed out, is its relatively shallow depth and its Rossing-style uranium mineralization, associated with intrusive rocks such as granitic pegmatites and alaskite and atypical for the Athabasca. Projects with this mineralization include Rossing, Langer Heinrich and Norasa.
"The trade-off between lower grade and shallower depth can also lead ...
