On Dec. 1, 2022, Blue Sky Uranium Corp. (BSK:TSX.V; BKUCF:OTC; MAL2:FSE) announced the closure of the second and final tranche of a non-brokered private placement, exercising 1,381,000 share purchase warrants at a strike price of CA$0.10.
Blue Sky is an Argentinian uranium and vanadium exploration company operating the Amarillo Grande Project in the country’s Rio Negro Province. Sole proprietors to the project and its 145-kilometer uranium trend, Blue Sky Uranium focuses on the extraction and development of both uranium and vanadium from the site.
Why Uranium?
Uranium is most often used to fuel nuclear fission reactions, which rapidly generate large amounts of energy. As a low-carbon source of power, nuclear fission produces far less carbon dioxide than most fossil fuel alternatives, granting it value as a green and emissions-free energy source.
Reuters notes that "high energy prices and the desire to decarbonize have spurred renewed interest” in nuclear fission technology worldwide. Thus, there has been steadily growing demand for uranium, in both international and domestic markets, amid the global growth of nuclear energy.
Reuters notes that "high energy prices and the desire to decarbonize have spurred renewed interest” in nuclear fission technology worldwide.
In the United States, the Biden administration funded approximately CA$150 million worth of research and development toward new nuclear energy infrastructure through the Department of Energy’s Office of Nuclear Energy.
These earmarked funds are intended to "ensure the United States is on track to reach a clean energy future,” according to the U.S. Secretary of Energy Jennifer Granholm.
While Blue Sky Uranium notes that "Argentina is the largest generator of electricity from nuclear energy in South America,” the drilling company admits that their country of operations also "lacks domestic uranium production,” which would otherwise necessitate an imported supply. Instead, the company identifies that lack of domestic uranium as an opportunity to secure what they determine to be a "‘guaranteed’ first customer.”
Blue Sky Uranium Receives CA$1.8 Million
As said above, Blue Sky Uranium closed the second and final tranche of a non-brokered private placement at the beginning of December. This second tranche contributed an additional CA$138,100 to the total 18,161,000-unit placement initially announced on Nov. 21, 2022.
Fundamental Research Corp. analyst Siddharth Rajeev identifies the two sites’ combined "potential for resource upgrade/expansion” as a catalyst.
In total, the company netted CA$1,816,100 from the deal, with all exercised warrants set to expire on Dec. 19, 2024.
Blue Sky Uranium recognizes this CA$1.8 million of gross proceeds as operating capital, with CEO Nikolaos Cacos noting that "this expanded financing ensures the exploration program at Amarillo Grande Uranium/Vanadium Project continues uninterrupted.”
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 Q2 2023.
The Critical Investor estimated that Amarillo Grande could potentially yield approximately "CA$135.2 million."
According to Blue Sky Uranium’s CEO, "significant similarities to the geological environment,” as well as the company’s "persistent, comprehensive exploration program,” collectively suggest high uranium yield in these areas.
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.
Catalyst: Amarillo Grande Resource Estimate
Having drilled 350 holes into the Amarillo Grande Project’s Ivona Deposit thus far, Blue Sky Uranium released assay results from its third tranche of reverse circulation drilling. The resource company’s yield revealed channel samples ranging in concentrations of uranium oxide between 117ppm and 309ppm on average. One such meter-long sample contained U3O8 as concentrated as 1,273ppm.
The Critical Investor estimated that Amarillo Grande could potentially yield approximately "CA$135.2 million, with a robust IRR of 29.3%, at CA$50/lb U3O8." These estimates take into account Blue Sky Uranium’s plan to extract approximately 75 to 100 million pounds of U3O8 over the Amarillo Grande Project’s lifetime, to which The Critical Investor implies "lots of exploration drilling [needs] to be done first.”
Ownership and Share Structure
Blue Sky Uranium Corp. (BSK:TSX.V; BKUCF:OTC; MAL2:FSE)
Of Blue Sky Uranium’s 217 million outstanding shares, approximately 6% are in the possession of the company’s management and ownership, leaving 204 million shares in the public float.
Of the 6% of shares owned by management, 4.15%, or 9.04 million shares, are those of Joseph Grosso, Blue Sky’s director and chairman of the board. An additional 2.8 million shares, or 1.29%, belong to CEO Nikolaos Cacos. David A. Terry, co-director of Blue Sky alongside Grosso, owns the final 1.01 million shares, or 0.46%, of the ownership stake. One strategic investor — the hedge fund DWS Investment GmbH — holds a minority stake in Blue Sky Uranium with a total of 1 million shares.
Trading in the 52-week range between CA$0.09 and CA$0.335 per share, the company operates at a market cap of CA$21 million, with another CA$5 million in the treasury.
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