US Ban of Russian Uranium Could Benefit Canadian Explorer

Vancouver-based Tisdale Clean Energy Corp. (TCEC:CSE; TCEFF:OTCQB; T1KC:SE), which is exploring and developing the Fraser Lakes B uranium deposit at the South Falcon East project outside the edge of the Athabasca Basin, is watching a major development involving the nuclear fuel in the United States with interest.

The U.S. Senate followed the House in approving a ban on American imports of Russian uranium last week. President Joe Biden has said he would sign the measure, shaking up the market and pushing spot prices up nearly 7% from April 25 to US$92.25 on May 2.

Red Cloud Securities analyst David Talbot said in a Monday webcast interview with Tisdale Chief Executive Officer Alex Klenman that the move is "big news" since Russia provides about 24% of the enriched uranium used by U.S. reactors.

"Replacing uranium and, even more importantly, enrichment services will become a challenge for the Americans," Talbot said. "It will likely have long-lasting impacts and likely drive prices higher."

Talbot said the news could drive mainstream media coverage of the metal and bring more eyes to the sector, "including new investors."

"If you believe in the sector, and there's a lot to believe in, that's even more positive news for the explorers, the producers, and all of us in the space," Klenman told Talbot.

The Catalyst: Shaping Market for 'Years to Come'

Coal, oil, and natural gas imports from Russia were banned after its invasion of Ukraine in 2022, but the U.S. spends about US$1 billion a year on nuclear fuel from Russia, MarketWatch reported.

In a statement to the publication, a White House National Security Council spokesman said the new rules will "provide assurance to industry, allies, and partners that the U.S. has made a clear decision to establish a secure fuel supply chain, independent of adversarial influence, for decades to come."

The ban is set to shake up the nuclear power market, a key component of the energy transition, Jonathan Hinze, president at UxC, a nuclear-fuel market information and analysis firm, told MarketWatch.

"The Russia ban is a big deal," he said. "It will shape the nuclear fuel market for many years to come."

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. 

The ban starts 90 days after enactment, although the Department of Energy is allowed to issue waivers in case of supply concerns.

"The reality is this: Over the last few years, there has been a very real and present possibility that Russia could stop abruptly sending enriched uranium to the United States," said Kathryn Huff, assistant secretary for nuclear at DOE.

The import ban would unlock US$2.7 billion from previous legislation for building out the domestic uranium industry, Reuters reported.

"A paired structure in which we invest in new conversion and enrichment capacity and then protect those investments with some import restrictions is what's required" to cut dependence on Russia, said Huff.

Last week, Biden also signed a foreign aid bill to provide billions of dollars of aid to Ukraine in its war against Russia.

'Pounds in the Ground'

Tisdale recently announced the completion of the first two drill holes into the Fraser Lakes B deposit.

The company entered into an option agreement with Skyharbour Resources Ltd. (SYH:TSX.V; SYHBF:OTCQX; SC1P:FSE) in 2022 that enables it to earn up to a 75% interest in the property by exploring and developing it. Initial drilling this year is scheduled to complete up to 1,500 meters of drilling in two phases as the company looks to confirm existing mineralization.

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, not including results from earlier drilling by Skyharbour.*

"The fact of the matter is there are pounds in the ground," Klenman said. "If anybody else out there can get that in the next couple of years, they're going to be named a successful exploration company. But we can start life with the ability to develop that deposit."

The "upside potential for additional discovery of more deposits is exceptional," Klenman continued. "We have a ton of exploration potential outside of the deposit itself . . . The next couple of years is going to be a busy time for us."

Finally, Klenman said the company's share price is "vastly discounted" and noted that at Tisdale's market cap, "you're not going to find another exploration company with the ability to develop" a similar uranium deposit.

Any shot in the arm to uranium prices by the U.S. uranium ban will be a sentiment driver in the industry and "assign greater value to those pounds in the ground," he said.

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."

Tisdale looked attractive and "worth going overweight on while it is still at a low price," he wrote. At the time, the stock was trading at about CA$0.17 per share; it is trading even lower now.

Ownership and Share Structure

Tisdale provided a breakdown of the company's ownership and share structure, where CEO Alex Klenman owns 4.43% of the company with 1.396 million shares.

Planet Ventures Inc. owns approximately 12% of the company, with 3.88 million shares, while Skyharbour Resources owns approximately 3.5%, with 1.11 million.

There are 31.5 million shares outstanding, while the company has a market cap of CA$1.81 million and trades in the 52-week period between CA$0.09 and CA$0.57.

_{*The historical resource is described in a technical report on the Falcon Point uranium project, Northern Saskatchewan, dated March 20, 2015, and filed on SEDAR by Skyharbour Resources Ltd. Tisdale is not treating the resource as current and has not completed sufficient work to classify the resource as a current mineral resource. While Tisdale is not treating the historical resource as current, it does believe the work conducted is reliable, and the information may be of assistance to readers.}

Important Disclosures:

1. Tisdale Clean Energy Corp. and Skyharbour Resources Ltd. are billboard sponsors of Streetwise Reports and pay SWR a monthly sponsorship fee between US$4,000 and US$5,000. In addition, Tisdale Clean Energy Corp. has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Tisdale Clean Energy Corp.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
4.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

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Contributing Author Disclosures (Noted at the time the contributor opinion was published)

1. Street Smart, an affiliate of Streetwise Reports, has compensated [Clive Maund], for writing this article. However, the views, opinions, analyses, and any recommendations in [Maund]'s article are solely their own personal views, opinions, analyses, and recommendations, and are expressly not those of Street Smart or Streetwise Reports. The content created by [Maund] is about companies they believe in based on their personal investment opinions and analyses, and their opinions and analyses are not influenced or dictated by Streetwise Reports or its affiliates or as a result of compensation provided by Street Smart.

Clivemaund.com Disclosures

The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.