Image via Blue Sky Uranium
The world is increasingly looking to go nuclear. As the demand for sustainable clean energy sources grows, both from developed and emerging markets, nuclear energy is receiving a lot of attention as a prime option. In fact, according to the World Nuclear Association, there are 440 nuclear power reactors currently operating in 31 countries around the world, but as of Jan. 1, 2016, there were 224 reactors either under construction or planned around the world, and an additional 330 reactors proposed with the potential to be operating by 2030.
With so many new reactors anticipated to come online, it’s no wonder that the price of uranium is expected to soar. By 2019, analysts expect prices to rise to as high as $75/lb. (per CIBC), representing a significant jump from the mid-$20/lb. level uranium currently sits at.
For Blue Sky Uranium Corp. (BSK:CA)(BKUCF), which is a member of the Grosso Group, its flagship Amarillo Grande Project in the Rio Negro Province of Argentina offers a number of significant catalysts to capturing uranium’s expected rebound and future growth. For one, Blue Sky is very optimistic that Amarillo Grande could potentially end up being a major discovery. In addition, Argentina’s emerging nuclear power industry is in great need of a domestic supplier to bring costs down, and the country itself is a relatively greenfield market from a mining perspective.
To learn more about how the company plans to leverage its very distinct advantages, Equities.com spoke with Nikolaos Cacos, CEO of Blue Sky Uranium, to learn more about its Amarillo Grande Project, the uranium market going forward, and the strategic benefits of being part of the Grosso Group—which is considered a pioneer in the mineral exploration industry in Argentina.
EQ: Can you give us a brief overview of Blue Sky and your operations?
Cacos: Blue Sky Uranium Corp. is a publicly-listed exploration company that is focused on uranium exploration in Argentina. Our flagship project is the Amarillo Grande Project, which translates directly to the “Big Yellow” because of the yellow carnotite. It is a form of uranium mineral that is found on the surface and that led to the discovery there. This is a very significant project in that it represents, not just a uranium project, but potentially the discovery of a new uranium district in Southern Argentina. This is what keeps us very excited and very focused on trying to identify and develop a significant-sized deposit down there.
EQ: There are multiple targets there that you're looking at on the project, which is located in Rio Negro Province. Most recently, you announced initial results from your Phase 1 Drilling Program at the Ivana target. Can you tell us about those findings, and what it tells you about the target?
Cacos: This is a very large district, and we've been able to divide that into three specific zones, with Ivana being one of them. On the surface, we are seeing uranium spread over a very wide area. This is a very large, 10,000-meter program, and the holes that we’re reporting today makes up only about a thousand meters. So, it’s only a small snippet of only one of the targets. What we're finding is that the uranium is occurring over some significant width, anywhere between 3 to 6 meters. This would allow us to then go back to highlight and trace the way that uranium flowed, so that we can begin to put together a resource estimate, which we intend to put together before the end of this year.
EQ: Can you tell us about the other targets and how they relate to Ivana? In essence, what is the scope of the opportunity of Amarillo Grande?
Cacos: There is an opportunity here to have a significant, world-class discovery. Our aim is to get something north of 15 million pounds of uranium before we can consider moving forward to put something like this into production. Simply, the size of the area and some of the initial results indicate that the potential is there. So, work is underway right now, and drilling to prove up that thesis.
EQ: With Phase 1 of Ivana completed, what are some next steps that we should look for as we mark your milestones?
Cacos: These are the initial results of Ivana. We’ll have a lot more results on Ivana to come. Also, the drill program has progressed to Anit, our second target. There's also a third target, Santa Barbara. The results from each of these targets, as they come out, are going to be very interesting to follow. In some ways, it’s like a picture that is covered. As we begin to unveil it, we'll begin to see more and more what the picture looks like. From there, we’ll be able to ascertain a resource calculation because this discovery occurs at surface. It's a superficial deposit. It also occurs in gravel, so it’s not hard rock. As a result, it’s potentially very low cost to put into production. With positive results from the current drill program, we hope to be able to advance to a feasibility study next year. We envision potentially a localized plant, with a number of deposits that can feed into it.
EQ: You also have projects in Chubut Province. What are your plans there?
Cacos: Our exploration work right now is exclusively focused in Amarillo Grande. In Chubut, we have some projects there, and we're also refining and adding to that property portfolio. Before we advance to do any work there, however, we want to make sure that the property that we have is what we want.
EQ: One of the things that makes Blue Sky so compelling is that you operate in Argentina. What are the dynamics of the country that make a uranium company there so unique?
Cacos: Argentina, as a prospective country for making discovery, is probably among the best in the world. Until the early 1990s, Argentina was never explored for any of the metals by private investment. It’s only after 1993 that Argentina became open to private investment. Grosso Group Management, which manages Blue Sky Uranium, has been one of the first few organizations to participate in Argentina for mining exploration. The group has made at least three other world-class discoveries in Argentina. We're focused on trying to make this one our fourth major discovery.
EQ: As a result of that, would you say that you have a first-mover advantage in Argentina?
Cacos: Absolutely. Through Grosso Group Management, we have great levels of contacts, not only with the federal and provincial government, but also throughout the mining industry, including potential vendors. We have a great track record. We have a huge respect for the communities and we are sensitive to their concerns. That always results in new opportunities that are offered to our group as opposed to other groups.
For example, in Rio Negro, when we first started picking up projects there, we teamed up with a geologist that headed exploration for the state-owned uranium company in Argentina. He helped point us to where we should be. There was no mining in Rio Negro at that time, but through conversations with the government we became partners, and now they very much encourage us to carry out uranium exploration. Rio Negro, by the way, has an advanced nuclear industry. They do research and they're also involved in building nuclear power plants.
EQ: What are your thoughts on the market dynamics of the uranium industry? The resource sector as a whole has experienced a prolonged downturn. It does look like it's starting to pick back up, and uranium seems to be the commodity that is garnering the most optimism. Where do you see uranium going from here?
Cacos: We see a lot of reports from experts, and we know that uranium has had to make a major recovery since the Fukushima Disaster, but we're seeing that there are nuclear reactors being built all over the world right now. Uranium, especially in this age where governments are environmentally minded in terms of reducing their carbon footprint, is truly an alternative energy that can satisfy these new energy needs globally.
Argentina itself has a growing nuclear power industry. Right now, it has three nuclear reactors. They’re building a fourth one, and there's more underway. But it imports all its uranium into the country. What we would like to do, as our aim and strategic goal with Blue Sky, is to become Argentina’s first domestic supplier of uranium, and, of course, produce enough uranium that we can also be an exporter.
EQ: Basically, there’s built-in demand right where you operate. When you combine that with the first-mover advantage you discussed previously, would you say that Blue Sky is in the right place at the right time?
Cacos: Absolutely. Most great discoveries are about being in the right place at the right time. We think we've got something major here with Blue Sky. We look forward to developing it and, as our work carries on, reporting back to say that we’ve got a major uranium situation in Southern Argentina.
EQ: Before we finish, could you tell us more about the team at Blue Sky as well as the Grosso Group?
Cacos: Absolutely. It’s our team that gives us our competitive advantage, and that comes two-fold. First, our experience in Argentina goes back 24 continuous years of activity. We are known there. The Grosso Group is an award-winning organization with multiple awards in Argentina for exploration and for mining. In fact, Joe Grosso, President of Grosso Group, just this year was inducted into the Argentine Mining Hall of Fame for his contribution to the mining industry in Argentina. This gives us a huge profile and goes a long, long way in terms of operating in Argentina.
Second, we feel like we have an excellent technical team, both in Canada and in Argentina. They're beginning to pan out now as we execute on our drill program. We’re excited to see all these elements come together and begin to define Argentina’s nuclear potential.
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