In an October 15 research note, Fundamental Research Corp.'s
Head of Research Sid Rajeev, B.Tech, CFA, MBA and equity analyst
Nina Rose Coderis, BSc (Geology) commented that uranium and
vanadium explorer Blue Sky Uranium Corp. (BSK:TSX.V; BKUCF:OTCQB; MAL2:FSE) is well positioned to provide a solution to the rising demand for uranium in Argentina.
The report pointed out that currently there are three operating nuclear reactors in Argentina. A fourth reactor is now being built and two more are planned for construction. At present, there are not any domestic sources of uranium, and the country must import 100% of the uranium it consumes.
The analysts remarked that this creates a solid opportunity for domestic uranium producer Blue Sky Uranium which holds a 100% interest a portfolio of four uranium assets in Argentina. Fundamental Research added that the company's management team has a solid track record and has been operating in the country for nearly 30 years.
Fundamental Research explained that "Blue Sky has the largest NI 43-101 compliant uranium resource in Argentina." The report stated that the Preliminary Economic Assessment (PEA) for the company's flagship Amarillo Grande project located in the Rio Negro province estimates the value of the resource at US$135 million with very low estimated cash costs of US$16/lb.
Research analysts Rajeev and Coderis indicated that the project is a medium-sized/low-grade deposit with an inferred resource of 22.7 Mlbs U3O8 (uranium) and 11.5 Mlbs V2O5 (vanadium). The analysts stated that about 85% of the projects economic value is attributed to the property's mostly shallow, near-surface uranium deposits located within depths of 25 m from surface. Blue Sky is now conducting an active drill program with the goal of expanding and upgrading the existing resource.
The analysts mentioned that global efforts toward clean energy are providing strong tailwinds for the uranium sector. Fundamental Research stated, "We have a positive outlook on uranium prices and believe that long-term prices have to be at least US$50/lb for new projects to come online."
The report advised that in terms of equity market valuation, Blue Sky is trading at just US$4.24/lb, much lower than the average for the sector of US$5.85/lb.
Fundamental Research listed that Blue Sky's future success will be predicated upon results achieved in its ongoing drill program and continued rising interest and optimism in the uranium industry.
Fundamental Research Corp. stated that it rates Blue Sky Uranium Corp. as a "Buy" with a fair value estimate of CA$0.47 per share. The firm advised that the valuation is based upon average uranium prices of US$55/lb.
The company's shares trade on the TSX Venture Exchange under the symbol "BSK" and last closed for trading at CA$0.275/share on October 26, 2021.
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Disclosure:
1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
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Disclosures for Fundamental Research Corp., Blue Sky Uranium Corp., Oct. 15, 2021
The opinions expressed in this report are the true opinions of the analyst about this company and industry. Any “forward looking statements” are our best estimates and opinions based upon information that is publicly available and that we believe to be correct, but we have not independently verified with respect to truth or correctness. There is no guarantee that our forecasts will materialize. Actual results will likely vary. The analyst and Fundamental Research Corp. “FRC” does not own any shares of the subject company, does not make a market or offer shares for sale of the subject company, and does not have any investment banking business with the subject company. Fees were paid by BSK to FRC. The purpose of the fee is to subsidize the high costs of research and monitoring. FRC takes steps to ensure independence including setting fees in advance and utilizing analysts who must abide by CFA Institute Code of Ethics and Standards of Professional Conduct. Additionally, analysts may not trade in any security under coverage. Our full editorial control of all research, timing of release of the reports, and release of liability for negative reports are protected contractually. To further ensure independence, BSK has agreed to a minimum coverage term including an initial report and three updates. Coverage cannot be unilaterally terminated. Distribution procedure: our reports are distributed first to our web-based subscribers on the date shown on this report then made available to delayed access users through various other channels for a limited time.
This report contains "forward looking" statements. Forward-looking statements regarding the Company and/or stock’s performance inherently involve risks and uncertainties that could cause actual results to differ from such forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company's products/services in the marketplace; acceptance in the marketplace of the Company's new product lines/services; competitive factors; new product/service introductions by others; technological changes; dependence on suppliers; systematic market risks and other risks discussed in the Company's periodic report filings, including interim reports, annual reports, and annual information forms filed with the various securities regulators. By making these forward-looking statements, Fundamental Research Corp. and the analyst/author of this report undertakes no obligation to update these statements for revisions or changes after the date of this report. A report initiating coverage will most often be updated quarterly while a report issuing a rating may have no further or less frequent updates because the subject company is likely to be in earlier stages where nothing material may occur quarter to quarter.
