IsoEnergy: A Promising Play on the Future of Nuclear Energy

After determining that the Arrow Deposit is of a world class standard Nexgen Energy (TSX:NXE) decided to spin off some of its other uranium exploration assets. And for background, if you don’t know NexGen Energy, you should, as it was one of the most successful mining exploration stories of 2016, reaching a market cap of $750M this year.

So Nexgen, in order to realize value of its highly prospective portfolio, created IsoEnergy Ltd. (TSX-V:ISO), which holds six strategically located and prospective assets in the eastern Athabasca Basin.

 

ISO’s portfolio includes a 100% interest in the Thorburn Lake project, prior to the discovery of the Arrow Deposit Nexgen had Thorburn Lake as its #1 priority. Thorburn Lake is within 7km of Cameco’s massive Cigar Lake deposit and initial drilling (14 total drill holes completed to date) identified uranium mineralisation and strong alteration typically seen near uranium deposits. ISO also holds majority interests in 5 other uranium plays including the Radio project in the eastern Athabasca Basin contiguous with Rio Tinto’s Roughrider deposit. Radio is a highly prospective project with a total of nine holes (totaling 3,472.9 metres) drilled during the summer of 2013 which identified clay alteration, structural disruption in the Athabasca sandstone and alteration and structures in the basement rocks. Such features are known to occur at or in the vicinity of high-grade uranium mineralization in the Athabasca Basin.

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Last week Energy & Gold had the opportunity to connect with IsoEnergy CEO Craig Parry to get filled in on the full story and where ISO is headed:

 

CEO Technician: What sets ISO apart from all the other uranium plays in the Athabasca?

Craig Parry: Great question. There are 3 key things that set ISO apart from the crowd:
  1. The team. Garrett Ainsworth is on our board and he is acting as an advisor to me, he was the discoverer of Patterson Lake South (now owned by Fission) and he has been instrumental in discovering many of the pounds we see at Nexgen’s Arrow Deposit. He is VP of exploration at Nexgen and he has really led the discovery of the entire southwestern part of the basin. We also benefit from having the entire Nexgen team who have discovered over 200 million pounds of high grade, high quality uranium. We have a tremendous team with an unmatched track record.

  2. The track record of our team has allowed us to raise C$10.5 million in the last few months in a challenging market environment for uranium explorers. ISO is a pure play exploration company and the fact that we are able to fund our exploration programs with relative ease really sets us apart from just about everybody.

  3. ISO also has a vision to do more than just exploration, we are also looking to be a consolidator of assets in the space.

To put it simply our competitive advantages are team & track record, access to capital, and a vision that is more than most junior exploration companies in the uranium space.

CEO Technician: What is the long term vision for ISO?

Craig Parry: We are committed to exploring our project portfolio and to make a tremendous discovery which will allow us to leverage our shares to acquire additional attractive assets in the Athabasca. There are so few well funded uranium exploration companies right now, we believe having access to capital puts us in the position to build an enviable portfolio.

CEO Technician: Are we at the point in the uranium space in which it is more prudent to acquire existing uranium assets rather than to continue to explore for new discoveries when the market isn’t really rewarding companies for exploration success?

Craig Parry: If you’re a larger company or a company like us that can act as a consolidator then now is the opportune time to do some of that. So far we haven’t seen any of that and it surprises me that there isn’t more M&A going on at the moment. However, I think it’s only a matter of time until we see the M&A pick up a bit.
We want to be a part of M&A in the uranium sector because we feel assets won’t be this cheap again. There might still be some more downside in the short term on share prices, but not much, and we’re even seeing some long term contracts signed at north of $30/lb U3O8 and some even up at $40/lb. These recent long term contracts signings are much more relevant data points than the spot price.

Scott Armstrong: Are you currently implementing a drill program on any of your projects?

Craig Parry: Investors can look forward to two large programs at both Radio and Thorburn Lake shortly. Both these projects have both seen historical drilling showing clear indicators that we could be narrowing in on something very interesting.

Scott Armstrong: Can you discuss your shares structure as well? This looks like a company with a lot of leverage as the float is very small.

Craig Parry: Yes, we are a very tightly held company, with NexGen Energy as the majority shareholder holding 75% of the stock with 4 additional shareholders owning 15%. So there are only about 5M or 6M shares in the public hands with an average cost of $1.00 or $1.10 per share. This will give enormous leverage to shareholders if we make a viable discovery this coming winter drill program. You don’t see this type of leverage in an exploration company very often, but you have it here.

We would like to thank Mr. Parry for his time and insights into ISO’s vision for creating a major uranium producer at perhaps the most opportunistic moment in this sector’s recent history. Right now uranium isn’t very sexy but it is from the ashes of bear markets that tremendous investment value is created. This could be one of those times for the uranium space and ISO could be one of the big winners given its tremendous team and unmatched access to capital at a time when most of its peers are struggling to raise a few hundred thousand dollars.

 

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