Tisdale Clean Energy Corp. (TCEC:CSE; TCEFF:OTCQB; T1KC:SE) began drilling the Fraser Lakes B uranium-thorium deposit earlier this year, and Chief Executive Officer and Director Alex Klenman is optimistic about the future of this South Falcon East project in Saskatchewan's Athabasca basin, he said in a recent interview.
"I think we've got something here we can develop and really build value on," Klenman said.
The Canadian uranium explorer has the option to earn a 51% stake in South Falcon East then potentially increase it to 75% by exploring and developing the project, per an existing agreement it has with owner Skyharbour Resources Ltd., Klenman explained. It calls for Tisdale to spend about US$10 million (US$10M) on advancing the project and pay Skyharbour about US$11M. Tisdale has fulfilled the required obligations so far.
"What we like about the project and found so compelling is to have our market cap where it's at and to be able to earn into the majority of a deposit," said Klenman. "An asset that eventually backs your valuation is critical."
Building on a historical resource
The initial objective with drilling at Fraser Lakes B, said Tisdale Geologist Trevor Perkins, who also participated in the interview, is to twin the holes having the best mineralization historically "to improve our confidence of how the mineralization looks, where exactly it is." Subsequently, over the next two to three years, the company will work to increase the deposit grade and size.
To date, Tisdale has drilled two holes there in known mineralization, results of which it expects to receive within six to eight weeks. Meanwhile, while the drill rig is on a nearby project, Tisdale is taking a break and will resume drilling later in the year. The project is located such that drilling can be done almost year-round.
The Fraser Lakes B deposit contains an Inferred resource of 6,960,000 pounds (6.96 Mlb) of 0.03% U308 at a cutoff grade of 0.01%, according to an estimate prepared in 2012. Also present at the same cutoff grade are other elements Tisdale may be able to monetize. They are 5.3 Mlb of thorium and rare earth elements: 1.62 Mlb of yttrium, 895,000 pounds (895 Klb) of cerium, 681 Klb of lanthanum and 305 Klb of ytterbium.
Skyharbour did some drilling of Fraser Lakes B in 2015. Some of the uranium intercepts returned then were 3 meters (3m) of 82% U3O8, including 2m of 0.10% U3O8. Hole 15, for example, showed 6m of 0.1% U3O8, including 2m of 0.165% U3O8, at 135m downhole as well as 2.5m of 0.172% U3O8 at 145m downhole.
"That's almost a 500% increase over the grade of the deposit," Klenman said. "We're showing that there's higher grade material within this deposit and potentially elsewhere on the project ground, and that's important."
Thus, resource expansion potential is significant. For one, the results of drilling by Skyharbour were never incorporated into the existing resource, noted Perkins. Also, the deposit remains open in all directions. Further, management believes Tisdale will discover additional deposits on the property, Perkins said, given South Falcon East's size, just over 12,000 hectares, and the Athabasca's prolific mineralization. Whether big or small, any newly discovered deposits would increase the project's value.
Klenman discussed the location of South Falcon East. For Tisdale, a company with a low market cap, he pointed out, it is in a "very high rent district" given the major players all around. They include Rio Tinto, Uranium Energy, Orano, NexGen, Denison and Cameco.
South Falcon East is on the perimeter of the Athabasca basin, in an area known for unconformity-style deposits and where mineralization is near surface, not underneath sandstone, explained Perkins. He added that Fraser Lakes B is hosted in pegmatite and its mineralization is shallow, ideal for open-pit mining.
Overall, said Klenman, Tisdale Clean Energy has a mineralized deposit in Fraser Lakes B, great regional exploration potential at South Falcon East, high prospectivity, an experienced geologist in Perkins, a great partner in Skyharbour and its CEO Jordan Trimble, and no cheap financings.
"There's a lot to like here," the CEO added. "We have nowhere to go but up."
Stock at a good entry point
David Talbot, Red Cloud Securities analyst, reported in a Feb. 9 research report that Tisdale's upcoming drill plan for the Fraser Lakes B deposit will span 1,500m and commence in later winter 2024.
"We look forward to the results of the program," he added. "The confirmation drilling should help in eventually making the historical resources current, with potential to expand the resource base if the results of extension and regional drilling are positive."
Technical Analyst Clive Maund wrote in a January report that Tisdale's stock was at a favorable entry point and offered great upside potential, in large part because its float is low.
He explained, "The bullish volume pattern and continuing uptrend in the accumulation line are most auspicious and suggest that a breakout into a major new bull market is incubating."
As such, though speculative, Tisdale looked attractive and "worth going overweight on while it is still at a low price." At the time, the stock was trading at about CA$0.17 per share; it is trading even lower now.
Ownership and Share Structure
According to Reuters, insiders own 6.42%, or 2.02 million (2.02M) shares, of Tisdale Clean Energy. These investors are Planet Ventures Inc. with 3.52% or 1.11 million shares and Tisdale CEO Klenman with 2.89% or 0.91M shares.
Retail investors own the remaining 97.98%. There are no institutional owners.
Tisdale has 31.54M outstanding shares, 20M warrants and 29.51M free float traded shares.
The company's market cap is CA$3.51M and its 52-week trading range is CA$0.125−0.70 per share.
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