Uranium Explorer Amends Upsize Option on Athabasca Project

Tisdale Clean Energy Corp. reached an agreement to amend its option agreement with Skyharbour Resources Ltd. to earn up to 75% on the South Falcon East uranium project in the Athabasca Basin of Saskatchewan.

The original five-year agreement, entered into in 2022, gave Tisdale an initial 51% interest in the project with the option for the 75% earn-in through shares, cash, and exploration spending at the site. The updated agreement allows Tisdale to issue more shares to Skyharbour to satisfy the earn-in and lessens the cash burden.

The new agreement requires Tisdale to issue 2.5 million common shares to Skyharbour and pay the company CA$1.27 million before a February 2025 deadline (CA$820,000 of this can be paid in common shares). Tisdale is also required to incur expenditures of at least CA$2.5 million at South Falcon East before the end of May 2025.

The previous agreement required 1.1 Tisdale shares, CA$11.1 million cash, and CA$10.5 million spent on exploration at the project.

"This amendment allows us much needed flexibility to navigate what has been a tough cycle for juniors in which to raise significant capital,” said Alex Klenman, chief executive officer of Tisdale. “We are grateful for Skyharbour's flexibility and to providing a more favorable path for us to acquire the majority interest in what we agree is a unique and compelling opportunity. We believe the sector is poised for the next leg up, and we’re looking forward to being in a position to benefit from a more robust market in the months ahead."

The 12,234-hectare South Falcon East property encompasses the near-surface Fraser Lakes Zone B deposit. It has a historical Inferred resource of about 7 million pounds (7 Mlb) of U3O8 at 0.03% and 5.3 Mlb of thorium dioxide at 0.023% within 10,354,926 tons using a U3O8 cutoff grade of 0.01%.

The remaining ground offers "incredible exploration upside," Klenman has noted.

Results from two drill holes at the property earlier this year also found mineralization of 0.02% eU3O8 over 5.6 meters, including 0.07% eU3O8 over 1.1 meters and a 0.2-meter interval grading 0.11% eU3O8. Further results included 0.03% eU3O8 over 4.1 meters, including 0.11% eU3O8 over 0.2 meters; and 0.02% eU3O8 over 1.3 meters.

Co. Gains Analyst Coverage

The company last month garnered the attention of HoldCo Markets, which initiated coverage on it with a CA$0.13 per share price target, the firm reported in a research note.

Tisdale was trading at about CA$0.06 per share on Thursday morning. HoldCo's 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.

HoldCo noted one of the factors making Tisdale an attractive investment is the fact that the South Falcon East has an existing resource.

"Though the South Falcon East deposit happens to be on the periphery of the Athabasca Basin" its proximity to infrastructure may improve the project's economics, added the investment firm. In the area are Skyharbour's Moore Lake project, Cameco Corp.'s (CCO:TSX; CCJ:NYSE) McArthur River mine and Key Lake mill, and Orano SA and Rio Tinto Plc (RIO:NYSE; RIO:ASX; RIO:LSE; RTPPF:OTCPK) 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 atypical for the Athabasca. Projects with this mineralization include the Rossing, Langer Heinrich, and Norasa mines in Namibia.

The Catalyst: (Much) More Energy Needed

One of the most important elements for the energy transition is uranium, which rose to US$106 per pound in February and was about US$80 on Wednesday.

Experts agree that the world will need a lot more energy soon, and nuclear energy provided by uranium will have to be a part of it. The electricity needed for artificial intelligence (AI) and electric vehicles (EVs) alone will add 290 terawatt hours (TWh) of new demand to utility systems by 2030, according to Rystad Energy.

"Overall, the combined expansion of traditional and AI data centers, along with chip foundries, will increase demand cumulatively by 177 TWh from 2023 to 2030, reaching a total of 307 TWh," noted Rystad, an independent research and energy intelligence company. "Despite data centers currently representing a relatively modest portion of total electricity demand in the U.S., this marks a more than two-fold increase compared to 2023 levels, which stood at 130 TWh, highlighting the efforts of the U.S. to position itself as a global data center hub."

IG Bank noted that Morgan Stanley has estimated a nuclear renaissance could be worth US$1.5 trillion through 2050 in the form of capital investment.

According to the World Nuclear Association, about 60 new reactors are under construction worldwide — 30 in China alone — and a further 110 are planned.

John Ciampaglia, chief executive officer of Sprott Asset Management, told MarketWatch's Myra P. Saefong that the supply deficit for 2025 is looking to be around 20 million pounds as supply has been "slow and new production keeps being delayed." Sprott Asset Management "doesn't expect any meaningful new mine production for at least four years," he said.

Ownership and Share Structure

Management and insiders own about 15% of Tisdale. Venture capital firm Planet Ventures Inc. holds about 9.3%.

The company's market cap is CA$2.05 million and it has 37.19 million shares outstanding. It trades in a 52-week range of CA$0.05 and CA$0.22.