92 Energy (92E) - Uranium Discovery on 4th Drill Hole
Matt Gordon caught up with Siobhan Lancaster, CEO and Managing Director at 92 Energy, an Australian uranium exploration company. She spoke about company activities and its potential as an investment.
Founded in 2020, 92 Energy is an ASX-listed company exploring for high-grade unconformity-related uranium in the Athabasca Basin, Saskatchewan, Canada. The Athabasca Basin is a top-tier district that has some of the largest and highest-grade uranium occurrences in the world, including the Cigar Lake and McArthur River mines.
92 Energy has five uranium project areas in the Athabasca Basin region: Gemini, Tower, Clover, Powerline, and Cypress River.
The company is headquartered in Perth, Western Australia. It has a market cap of $AUD 30 M and 76.11 M shares outstanding.
Management At 92 Energy
In addition to Lancaster, management consists of Steven Wood, CFO and Company Secretary; Kanan Sarioglu, VP Exploration; and Steve Blower, Technical Director. The board of directors includes Richard Pearce, Chair, as well as Matthew Gauci, Siobhan Lancaster, and Oliver Kreuzer.
Meet Siobhan Lancaster and Her Colleagues
Lancaster has a wealth of experience in the uranium industry, having previously held executive positions in this sector. She was previously the Company Secretary for Corporate Affairs at Extract Resources, which discovered the Husab Uranium Project in Namibia. She was with Extract from just after that company made the discovery, and followed it through to the sale process. Prior to that, she was a corporate lawyer. This is her first tenure as a CEO of a publicly-traded company.
There are two principal technical people at 92 Energy: Steve Blower has experience in numerous discoveries in the Athabasca. He previously worked at IsoEnergy. Kanan Sarioglu, recently added to the team, has a wealth of experience in base-hosted uranium discoveries. The company anticipates adding to its technical expertise going forward.
The board brings extensive experience in Athabasca uranium and in company building. Oliver Kreuzer, for example, put together the original Athabasca prospectivity study, which is why the company is exploring in Saskatchewan today.
92 Energy’s Formation and Business Plan
92 Energy’s goal is to explore for and discover near-surface, basement-hosted uranium deposits. The company has had recent green-field exploration success with the Gemini mineralized zone, which was discovered on the fourth hole ever drilled by 92 Energy.
Lancaster was attracted to this opportunity by a confluence of ideas and happenings. First, there was overall intrigue because there hadn’t been an ASX uranium exploration-company listing in the last decade. Meanwhile, she was approached about the ability to pick up key assets in the Athabasca. She started looking at IsoEnergy and NexGen and the discoveries that each company had made, and was piqued even more. So, in 2020, she put together a company that was exploring purely in the Athabasca Basin. The effort was clearly propelled by an uplift in the uranium price as the company was going through its formative stage.
Initial technical work started with a geologically driven regional study over the Athabasca Basin, which alerted the company to specific areas in the basin. The Gemini Project was one of those particular areas. Lancaster liked the project so much that the company pegged a whole lot of additional ground around the original asset, which was picked up from IsoEnergy.
The company has quite a bit of historical data on the area. There had been previous historical drilling and some previous exploration, but there really hadn't been anything done since the 1970s. 92 Energy saw this as a big opportunity. There were several uranium shows around, including radioactive boulders 12 km south of the Gemini mineralized zone. There was also bog sediment sampling and lake sediment sampling assaying up to 660 parts per million of uranium.
For a uranium buff who had worked in Namibia, those grades seemed extraordinary to Lancaster and definitely needed follow-up exploration. Key Lake is an example of an Athabasca mine that was originally discovered from radioactive-boulder shows.
92 Energy then flew a VTEM (Versatile Time Domain Electromagnetic Survey) over the Gemini Project, which was really the first thing that the company did as a team. Two weeks later, it was using those results and drilling on the prospective site.
What Can Investors Expect?
92 Energy has been able to raise money and has a nice discovery under its belt. The company has over AUD $20 M in the bank.
The company will be utilizing that money to aggressively drill the Gemini Mineralized Zone (GMZ). It has an initial plan to drill 6,600m, but that program can be expanded if winter is long and the drill results are good.
Next, the company intends to drill the Gemini extension zone, which it is extremely excited about. That zone is 1.8 km along strike to the north. A magnetic survey shows that there is a conductor running north and an overall low magnetic signature. The low magnetics can be interpreted as subsurface alteration. The company will test that theory and hopefully, Gemini will prove to be an extremely good area. Lancaster is hoping that this could be the next Arrow or Triple R, which are exceptional nearby deposits.
Although Lancaster’s uranium experience was, up to this point, in Africa, she is well aware of the seasonality constraints when exploring in the Athabasca. She has surrounded herself with top –notch, Athabasca-experienced people. Take Kanan Sarioglu, for example. He spent the last eight years drilling the Triple R deposit before he came over to 92 Energy. He's extremely familiar with all of the suppliers in the Athabasca Basin. In fact, 92 Energy just hired what everyone considers to be the top drilling team in the Athabasca Basin, Bryson Drillers.
The Deal with IsoEnergy
When 92 Energy was listed as an IPO in 2020, IsoEnergy received 16% of the company. IsoEnergy is currently a 14% shareholder in the company. 92 Energy was obligated to spend AUD $1M over the IsoEnergy areas. It has almost fulfilled those commitments already. There is also a 2% NSR (Net Smelter Return), which is a royalty attached to the IsoEnergy areas. But that is not in the discovery area.
Sprott’s Contribution and Overall Market Forces
As the company was in its embryonic thought stage, Lancaster and the team had an inkling the uranium market was about to turn. Indeed, Sprott entered the market and completely changed the short-term dynamics of the market by “whipping out” all of the excess inventory of uranium. That's done a tremendous amount for the spot price. It has increased from USD $30 at the beginning of the year to $45, where it's sitting now.
Essentially, there had been a ten-year lack of exploration and development in the area, and eventually, companies started to go through their supplies. In addition, the demand story, especially with the decarbonization and electrification trends, caused a global uptrend in the uranium market. Finally, the European electricity crisis has also played a role. It's all just playing beautifully into the story for the long-term fundamentals of uranium.
What’s Next for 92 Energy?
Lancaster would like to keep moving forward towards a resource at a good clip. She did just that in her previous experience at Extract, which went from a discovery, to a resource, to a DFS, and finally to a mining license within a very short period of time. It was aggressive drilling that got that done. She would like to repeat that process and, hopefully, drill as aggressively as possible with the drilling budget as the season allows.
She would also like to access additional cash as needed to keep the program in full swing. Uranium is a global commodity, so there is the possibility to find capital not only from North American sources, but from Asian, European, and Australian coffers as well. The key, she said, is that money will be forthcoming if the discovery is good.
At the moment, 92 Energy is listed only on the ASX. Of course, it may be appropriate down the road to look at a dual listing on a North American or other market. That decision won’t be made until the drill rig goes into the ground and starts drilling, and results come in. At the moment, the company only has one discovery hole.
Partnering Possibility with Baseload?
One potential move for 92 Energy is to partner with Baseload Energy, its neighbor in the Athabasca Basin. Both companies are currently eager to concentrate on each of their acreage positions, but Lancaster always likes to talk to her neighbors.
The company is off and running in the Athabasca. Next up is a rig starting to turn in early- to mid-January, 2022. Stay tuned for further details.