To the shareholders of Consolidated Uranium:
As we begin 2021, I wanted to take a moment to reflect on our Company's achievements over the past year and set out our objectives for the upcoming year and beyond.
- Uranium Market Resurgence
Looking back to early last year, the decision to enter the uranium sector as a global consolidator does seem prescient. After trading in the low to mid
At Consolidated Uranium, we subscribe to the view that uranium prices, both spot and long term, are likely to move higher as the current price level is insufficient to support existing production or restart idle capacity let alone new mine development. At the same time, the outlook for nuclear power, the driver for uranium demand, is strong with reactor build programs advancing around the world and nuclear becoming a more prominent part of the low carbon power generation narrative.
This confluence of a potential uranium supply crunch with growing demand for nuclear power could be the perfect storm for the uranium sector this year and comes on the heels of a prolonged bear market where exploration and development spending has been steadily declining.
- Proven Business Model
Our strategy at Consolidated Uranium is to acquire uranium projects around the world that have seen significant past exploration expenditures and market attention but are not being advanced or focused on at present by the current owners. This consolidation strategy was proven in the previous uranium bull market (2005 to 2010), deployed by the likes of Mega Uranium Ltd. (TSX: MGA), Paladin Energy Ltd. (ASX: PDN) and Energy Fuels Inc. (TSX: EFR) as well as by several other companies that were ultimately acquired, such as
- Highly Experienced Team
The year 2020 saw many leadership changes at Consolidated Uranium. We added three new directors, each with deep mining, public markets and M&A experience. At the same time, we retained the uranium "DNA" of the Company with original founders Leigh Curyer (CEO of NexGen Energy Ltd. (TSX: NXE)) and
- Compelling Portfolio of Initial Acquisitions
In 2020 we signed four option agreements to acquire five projects in three countries. As we built out the initial portfolio, we had exacting criteria for the individual project characteristics to pursue as well as how each project fits within our overall portfolio. Our approach involved targeting projects which have seen significant past expenditures and some level of resources delineated. While we recognize that substantial returns can be generated from a new discovery, we also recognize that there is significant risk in such a long-term approach.
Our initial portfolio checks a lot of boxes with options on projects in two of the top uranium producing jurisdictions in the world (
Project Details: | |||
Project(s) | Location | Current Owner | Date Signed |
Mega Uranium Ltd. | |||
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The |
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Project(s) | Location | Current Owner | Date Signed |
IsoEnergy Ltd. (TSXV: ISO) | |||
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Project(s) | Location | Current Owner | Date Signed |
Moran Lake Uranium | |||
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Project(s) | Location | Current Owner | Date Signed |
Laguna Salada Uranium and Vanadium | Chubut, | U3O8 Corp. | |
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Laguna Salada is an advanced stage project with a historical preliminary economic assessment published in |
- Compelling Future Ahead
Completing the four option agreements last year was only "phase one" of the Company's new strategy and we anticipate another active year ahead. Since employing this new business model, the Company has reviewed dozens of opportunities and has a full pipeline of projects under various stages of evaluation and negotiation with a range of counterparties.
Our ability to complete future transactions has been enhanced by our successful financings that were completed last year. In total, the Company raised gross proceeds of approximately
In closing, I would highlight that while 2020 was a tremendous year for the Company, as we executed successfully on all tenets of our new business plan, we feel confident that we are still in the initial stages of building out the Consolidated Uranium portfolio and ultimate value.
I would like to thank all our existing shareholders for supporting and joining us on this journey.
Yours truly,
About
In addition, the Company owns 80% of the Mt. Roe gold project located in the Pilbara region of
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Cautionary Statement Regarding "Forward-Looking" Information
This letter contains "forward-looking information" within the meaning of applicable Canadian securities legislation. "Forward-looking information" includes, but is not limited to, statements with respect to activities, events or developments that the Company expects or anticipates will or may occur in the future including future financial results, investment strategies, goals, plans, business opportunities and ability to create value for shareholders, as well as market and industry trends and growth opportunities. Generally, but not always, forward-looking information and statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or the negative connotation thereof or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative connotation thereof.
Such forward-looking information and statements are based on numerous assumptions, including that general business and economic conditions will not change in a material adverse manner, that financing will be available if and when needed and on reasonable terms, and that third-party contractors, equipment and supplies and governmental and other approvals required to conduct the Company's planned activities will be available on reasonable terms and in a timely manner. Although the assumptions made by the Company in providing forward-looking information or making forward-looking statements are considered reasonable by management at the time, there can be no assurance that such assumptions will prove to be accurate.
Forward-looking information and statements also involve known and unknown risks and uncertainties and other factors, which may cause actual events or results in future periods to differ materially from any projections of future events or results expressed or implied by such forward-looking information or statements, including, among others: negative operating cash flow and dependence on third party financing, uncertainty of additional financing, no known mineral reserves or resources, reliance on key management and other personnel, potential downturns in economic conditions, actual results of exploration activities being different than anticipated, changes in exploration programs based upon results, and risks generally associated with the mineral exploration industry, environmental risks, changes in laws and regulations, community relations and delays in obtaining governmental or other approvals. Such risks and uncertainties are set out under the heading "Risk Factors" in the Company's Management's Discussion and Analysis for the financial year ended
Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information or implied by forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking statements or information. The Company undertakes no obligation to update or reissue forward-looking information as a result of new information or events except as required by applicable securities laws.
The scientific and technical information contained in this news release was reviewed and approved by
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