CanAlaska Uranium (CVV) - New Uranium Discovery in the Making

CanAlaska Uranium Ltd. is a junior exploration company that prides itself on its hybrid model of project generation and active exploration. The Company is focused on the exploration of uranium, copper and nickel deposits in both the Athabasca and Thompson Nickel Belt regions.

The company believes that even though the commodity market is seeing a low point, it will turn and that this is an ideal time to enter the uranium market. The company notes that various mining companies are strategically positioning themselves in this de-valued environment, to enable large growth in the future.

CanAlaska Uranium Ltd. announced on the 6th of October 2022, that it would undertake a non-brokered private placement to raise CAD$ 8 million in gross proceeds. The company announced on the 2nd of November 2022, that it had concluded with the aforementioned non-brokered private placement. The placement consisted of the issuing of approximately 13.17 million flow-through units as well as approximately 4.5 million charity flow-through units, for gross proceeds of CAD$ 10 million.

CanAlaska Uranium Ltd. plans to continue advancing both its West McArthur as well as Key Extension projects in 2023. The company plans to have two drill rigs active at the West McArthur project and one drill rig at the Key Extension project. The company will also implement alternative drill technology, which will enable it to drill test the uranium mineralisation at greater depths of the West McArthur project.

The Uranium Sector and Following a Contrarian Strategy

Contrarian investment is the term used to refer to an investment strategy in which an investor purposefully goes against the grain. A contrarian investor buys when most of the market is selling and sells when most of the market is buying. Corry Belyk, the Executive Vice President and CEO of CanAlaska Uranium Ltd. explains Contrarian investment as:

“To put it simply, when everyone's leaving, that is the time you should get in, and that's the contrarian view. That's hard to do, it takes patience, but in general, if people don't want it, that's a great time to get it. You have to take a longer-term view. Contrarians do take that long view, I find, and they really try and buy at those lows, close to those lows or average into those lows, and really take advantage of that exit from other investors that are a little bit more panicked or otherwise distracted.”

Belyk explains that the uranium sector throughout the last 10 to 12 years has grown and changed, with various catalysts having positively impacted the sector.

“I am of the vintage where we came through 10 to 12 years post-Fukushima of a real low, a real prolonged low. Then it came up in 2019 to 2020, maybe that was the starting point where interest was coming back, and then it went into a bit of a lull. For me, late in 2021 when Sprott came into the market, when you had some of these other catalysts starting to take recognition of the supply-demand gap in the uranium space, and that really set it a little bit on fire. That was good for us.”

The interest in the uranium sector has dwindled according to Belyk in the recent past, but this creates an ideal time for an investor to follow a contrarian investment strategy and enter the uranium market.

“What we saw in late 2021 was that the interest really flowed back in. That's waned since; so that interest has come off a little bit, and I think some of that has to do with this exit that we just talked about, the masses exiting, but the contrarians are getting in and they're buying into the uranium space and the uranium story.”

Belyk explains that one of the indicators for him regarding the future of the uranium sector would be the activities of Cameco Corp. The company has been acquiring various properties and investing heavily in the uranium sector to position itself for the expected increase in uranium demand.

“I think one of the really important things we've seen in the last number of months, post the geopolitical issues in Ukraine and Russia and what that means to the market potentially, is that Cameco, one of the big miners and converters of uranium, is coming into the market with a big deal. They haven't been doing that for many years, they have been very conservative, and now you're seeing them loosen the purse strings, get into that uranium space and really create some value and potentially a slightly different part of the market through the Westinghouse deals. I think that's a real indicator of what's to come. They're positioning themselves in a devalued asset, I believe, in a market that they see in front of them. I think investors should take note.”

Belyk however does believe that companies across the board in the uranium sector are undervalued, with the majority of junior uranium mining companies having seen a decline in their share prices since June 2022.

“I'm going to be quite open and say they're undervalued as a whole. There are nuances there: you've got some companies that are valued essentially on no results. You've got other companies that are valued on results adequately. You've got companies that are perhaps not valued enough because of the results they've had, so you've got a mixed bag. But I think in general, it is undervalued at present. I say that because you've seen almost all companies across the board, at least our peers, have come off in valuation since June of this year. That is for no other reason than a softening in trading volumes, a softening in some of the sentiment, and geopolitics is playing a role, but the underlying fundamentals for the nuclear space are incredible.”

Belyk believes that the current market is an ideal time for an investor to enter the uranium sector. He believes that a realistic price target for uranium will be around USD$ 65 per pound in the future and explains to reach those prices the global demand will need to increase to a point where tier 2 (lower-grade) projects have to come online.

“I think the majority of the bull run is still in front of us. One of the reasons I say that is because if you want to bring on new production globally, just step back a little bit. If you want to bring on a new production that is break-even at around USD$ 65 per pound, that is break-even, you have to forward sell those pounds at USD$ 80 per pound to USD$ 90 per pound minimum in order to incentivize that to come on stream. The price of uranium is sitting at around USD$ 53 per pound to USD$ 54 per pound this week, we're still off from the USD$ 65 per pound again - break even for what we call or like to call those tier 2 assets around the world. That's the type of valuation they need and we're not there yet. There are a lot of upsides, so it's not too late. It's absolutely not too late. Now is the time. It's a brilliant time to get into the nuclear space.”

USD$ 10 million raise

CanAlaska Uranium Ltd. announced on the 6th of October 2022, that it would undertake a non-brokered private placement to raise CAD$ 8 million in gross proceeds. The company announced on the 2nd of November 2022, that it had concluded with the aforementioned non-brokered private placement. The placement consisted of the issuing of approximately 13.17 million flow-through units as well as approximately 4.5 million charity flow-through units, for gross proceeds of CAD$ 10 million.

Belyk explains that the raise has been able to create an opportunity for new investors to invest in the company but also for existing shareholders to increase their positions.

“We do have existing shareholders coming into this raise. We've also got some new ones coming in, and that's largely because of the summer exploration results we had. Some of that is still pending in the news because we haven't announced all of our assays yet. We're in the middle of a raise; we can't release those results yet, we can't even see them yet, so that's all still to come. I would say that there was great support. We started with a USD$ 8 million raise, and within an hour, before I even got to work, it was full, so we upped it to USD$ 10 million that day and it was full the next day.”

West McArthur Uranium project

The West McArthur uranium project of CanAlaska Uranium Ltd. is a joint venture between the company and Cameco Corp. CanAlaska Uranium Inc. owns 78% of the project, with the remaining 22% belonging to Cameco Corp. The project is located in the Athabasca Basin in Saskatchewan, within the proximity of the McArthur River uranium mine, the world’s richest uranium operation, owned by Cameco Corp. and adjacent to the Fox Lake deposit, discovered by Cameco Corp. in 2013.

CanAlaska Uranium Ltd. has throughout 2022 announced various exploration drilling results of the project. The highlights of the drilling results include 3.5% U3O8 over 6.0 m as well as 2.4% U3O8 over 9.0 m.

Belyk states that various samples sent for assay analysis have shown CPS values too high to be shown on the scintillometer, which suggests high-grade uranium mineralisation as there is a general correlation between CPS values and the grade of a sample.

“We're waiting on assays that we can't even measure with our scintillometer; it's totally off the scale. We'll see what that comes back at, but I guarantee that it will be high-grade. It looks right, and this is what we've been seeking at West McArthur for a number of years: this type of intersection in a new area that really says, wow! The level of alteration, and the style of mineralization; this all looks right. That's what makes us excited because it truly does look and feel right.”

Future

CanAlaska Uranium Ltd. plans to continue advancing both its West McArthur as well as Key Extension projects in 2023. The company plans to have two drill rigs active at the West McArthur project and one drill rig at the Key Extension project.

“In Q1 we will actually have 2 rigs at West McArthur and we're going to have a third rig at Key Extension, so we'll have 3 rigs turning in Q1 on CanAlaska's portfolio, so it's going to be a great set of news flow.”

The company will also implement alternative drill technology, which will enable it to drill test the uranium mineralisation at greater depths of the West McArthur project.

“I'm very fortunate to have on the team a set of senior geologists who have worked at Millennium, at Cigar Lake, at Orano's Shay Creek deposit, at depths in excess of West McArthur, using this very technology. We're bringing in the right equipment to do that work starting in Q1 next year. We're going to be able to get in there, get on it and really start to define what we think we have in front of us.”

Belyk believes that the company has great value creation potential and offers investors the ideal environment to enter the uranium market.

“I think investors are seeing what we're doing. They're seeing what the markets are doing. They're seeing signals from Cameco, and they are going, now's the time to position. Yes, we're a bit elevated from the USD$ 0.28 range, but there's a lot of value not yet captured in CanAlaska, because of what it's doing and the good work that's coming from that work. If you're taking that view, you really should try and get in there.”

To find out more, go to the CanAlaska Uranium website