Corey, CanAlaska is not a typical mining company, being a ‘project generator’, whereby you work with partners in joint ventures…
We actually deploy a hybrid model of project generation and active exploration. Project generation is one of the ways we fund our large Athabasca Basin exploration portfolio, as we cannot finance it all ourselves. By bringing in partners to advance some of the earlier stage projects that we have generated, we are able to focus on the core assets we want to explore using our shareholders' funds. This model is beneficial because exploration in the junior space can be dilutive. When you bring in partners, it reduces the need to issue additional stock, allowing us to manage our dilution effectively.
The second half of our model is active exploration. We take our shareholders' money to explore our core assets, such as our West McArthur joint venture with Cameco and our Moon Lake South joint venture with Denison Mines. These projects are located in the Eastern Athabasca Basin, and we advance them with our treasury. Essentially, this hybrid approach allows us to de-risk our projects by using funding sources other than our share capital. This is valuable as we preserve a residual interest in these projects, often backed by royalties. If a partner is successful, we gain from their success, sometimes through royalties, shares, or cash.
But you are not interested in producing uranium yourselves?
Correct, our business model does not involve taking any of these assets to production. The uranium space is highly regulated, leading to a very long timeline to first production. We are really positioned at the front end of the value chain—focused on discovery. We take concepts, apply geoscience, and work toward making a discovery. If successful, we experience significant increases in share price, which is what our shareholders are after. They are looking for that early-stage discovery and the potential for rapid returns, either through a sale, an auction process, or a takeover. After making a discovery, we move it into the hands of companies that will take it forward to production, then start the process again.
There are currently 102 uranium companies exploring in the Athabasca Basin. What is your strategy to remain competitive?
There are different strategies to deploy, but our primary advantage is that we have been in the Athabasca Basin for 20 years. We were here in the last cycle and have weathered the lows when there were only a few companies, like Cameco and Orano. We retained our portfolio from the last cycle and were able to stake early and pick up land with the right geoscience attributes before the market became crowded. This early action means we have the right land, which is a crucial advantage.
Additionally, our team is a significant differentiator. We have rebuilt CanAlaska with experienced members from companies like Cameco and Orano, who are now working on making discoveries with our partners, such as at the West McArthur joint venture. Moreover, we have strong financial backing, a tight share structure, and have been mindful of dilution throughout periods of market lows. We have 163 million shares outstanding, allowing any discovery we make to provide significant appreciation. These factors—land access, experienced personnel, and strong financial management—set CanAlaska apart.
You have recently had good results from drilling in West McArthur. Could you update us on the progress and potential of the project?
The West McArthur project is a joint venture with Cameco, who joined the project in 2016. I was actually involved in negotiating that deal, which gives me a unique perspective now being on the other side with CanAlaska. Cameco invested around $5 million to earn a 30% stake, which allowed further exploration and the discovery of high-grade uranium. However, when Cameco reduced its global exploration budget, CanAlaska stepped in, took back project operatorship, and continued making discoveries.
In the last six months, we discovered ultra-high-grade uranium that resembles the McArthur River deposit, a massive operation near our project. We have drilled grades as high as 10-15% over substantial thicknesses, which shows this project has the right attributes to be considered tier one. The project is entirely open, with multiple kilometers of untested geology. Cameco holds a minority interest but remains actively involved. This project has the potential to be a game-changer for us, given its proximity to established infrastructure and the Key Lake mine. We aim to reach the first resource estimate by the latter half of 2025, which would significantly increase our value in the market.
What about your Moon Lake South joint venture with Denison Mines?
Moon Lake South is indeed promising but is at an earlier stage. We drilled eight meters of 2.5% uranium about 18 months ago. This project was generated around the same time as West McArthur, and Denison earned a 75% interest through a series of work programs. They now operate the project, while we hold a 25% interest. It is situated right next to Denison’s Wheeler River project, close to their Phoenix deposit, which they are advancing using in-situ recovery methods—an approach we are watching closely.
The project is in a great location and managed by a capable partner. Denison is continuing to explore and work on understanding the extent of the uranium deposit. They are gearing up for a second drilling program in 2024 to test additional targets, which appear connected to the high-grade mineralization we have intersected. Given the right partnership and the right project, we are optimistic about Moon Lake South's potential.
What is your perspective on the West's ability to become self-sufficient in terms of uranium supplies?
I believe the Western world has sufficient uranium resources, and there are more discoveries yet to be made. Projects like our West McArthur and others, such as Denison’s Phoenix deposit, have the potential to become significant production centers for the West. Additionally, regions like the U.S., other parts of Canada, and Australia are also likely sources of supply. However, to truly meet our uranium needs, there must be an investment in discovery. Explorers like CanAlaska, along with major companies, need to invest in finding and developing new deposits.
That said, a critical factor is incentivization, which includes long-term contracting and a supportive uranium price. Many deposits in the Western world are not economic below $80 per pound, so the market needs to support higher prices. Moreover, we need to cut red tape—streamline permitting and regulatory processes. It should not take 15 to 20 years to bring a tier-one asset into production. We need to find ways to accelerate this process, potentially using innovative technologies like Denison’s in-situ recovery. The West can certainly be self-sufficient, but it requires a shift in the market and regulatory environment.
Another important aspect, particularly in Canada, is the social side of things. We need to support the communities around these operations and establish agreements that bring value to them. By addressing social, regulatory, and investment challenges, we can move projects forward faster. If we found a deposit today, it might not be in production until 2045, which highlights the urgency of moving faster if we are to meet our climate goals by 2050.
Don’t you think that there is still a lot of anxiety and resistance in the public when it comes to uranium mining?
Public perception and understanding of uranium have improved significantly over the years. For instance, Saskatchewan has about 80% support for the nuclear industry, which is impressive for a major uranium-producing region. However, it is not just about the industry being more proactive. The real shift needs to come from the government, which should recognize the urgency and critical need for uranium as a clean energy source.
Where do you picture CanAlaska in five years?
I often tell my team that our ultimate job is to put ourselves out of work. By that, I mean our goal is to make a Tier 1 discovery and then get it into the hands of a company that can take it forward to production. In five years, I would like to see CanAlaska recognized for making a discovery that results in significant shareholder appreciation and contributes meaningfully to the future of nuclear fuel supply.
Our aim is to be part of the energy transition by providing a clean energy source through uranium. If we have made a discovery that truly makes a difference for future generations, then we have succeeded as a junior explorer.
