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Uranium Stocks Are Quacking Loudly

Source: Michael Ballanger 01/16/2024

Michael Ballanger of GGM Advisor Inc. shares his thoughts on some energy stocks as the price for uranium hits new highs.

I have held shares in Colorado-based Western Uranium & Vanadium Corp. (WUC:CSE; WSTRF:OTCQX) since 2017 when I participated in my first private placement at CA$1.79 per share. Cameco Corp. (CCO:TSX; CCJ:NYSE) NexGen Energy Ltd. (NXE:TSX; NXE:NYSE.MKT) Tisdale Clean Energy Corp. (TCEC:CSE) Skyharbour Resources Ltd. (SYH:TSX.V; SYHBF:OTCQX; SC1P:FSE)

Since then, there have been a number of other private placements as high as CA$1.80 and as low as CA$0.80 that subscribers have been offered since 2020, and all the way along this journey, CEO/Chairman George Glasier has vowed to commence production from the Sunday Mine complex first in 2018 when vanadium had its spike to nearly USD$30/lb. and again here in 2024, with assurances that the Maverick Mills Processing Facility would be permitted in 2023.

Twice in the past seven years, the stock has had a spike in response to “false-start” uranium moves to CA$3.25 (2018) and CA$4.18 (2020) before dropping back below CA$1.00/share. With their marketing materials indicating a 56 million pound resource of U3O8, I have always expected that one of the majors would come along and scoop it up for the resource with access to sufficient capital to build a mill on the Sunday Mine site. Unfortunately, that has never happened.

The company just completed a CA$7.25 million funding in December that once again allows them to proceed with G&A expenses and marketing programs with “Use of Proceeds” from the prospectus going towards “expanding production capability at Sunday Mine Complex by adding a second mining team to develop the next major ore body and continue long hole drilling program.”

This is essentially the same use of capital described in 2018 for the “high-grade vanadium resource” that was going to be mined and sold that year but never materialized. I placed a target price of CA$6-8 per share back in 2018 based upon the uranium/vanadium resource and, like many other shareholders, suffered through the years waiting with bated breath for uranium supply to dwindle and the pent-up demand for nuclear fuel to drive prices higher.

Finally, here in 2024, we just watched companies like Cameco Corp. (CCO:TSX; CCJ:NYSE) and NexGen Energy Ltd. (NXE:TSX; NXE:NYSE.MKT) hit all-time high price levels while WUC/WSTRF is still 50% below the 2020 peak at CA$4.18.

As I wrote in a previous missive, the uranium ducks are quacking loudly, and with gap openings like the ones we saw in CCJ:NYSE on Friday, the chart patterns of these companies are quickly moving from “gradual” to “vertical,” and when that happens, a reversal is sure to arrive. As a result, I began taking profits on CCJ:NYSE last week and will continue this week if prices continue to advance.

Now, I might be early in selling my positions in these names but what I do not want to experience is another reversal and downside correction in WUC/WSTRF. At the same time, I do two GGM Advisory EMAIL ALERT not want to miss what could easily be a flood of excitement into the little junior uranium exploration issues that have yet to get the attention that usually accompanies the mania phase of markets, not unlike the lithium names back in 2022-2023.

The correct strategy is to reallocate the CCJ and WUC/WSTRF funds into the junior exploration space and while remaining in the uranium space, moving to a micro-cap explorer like Tisdale Clean Energy Corp. (TCEC:CSE) takes me out of the CA$90 million market cap of WUC/WSTRF and into a CA$2.9 million market cap in TCEC, a 30-times differential. CEO Alex Klenman and I have had a number of conversations regarding his South Falcon East exploration program, which is open to the west and to depth while being located in the Athabasca Basin region of Saskatchewan.

TCEC can earn 75% of the project by spending CAD $10,500,000 over a 5-year period and issuing shares to project generator Skyharbour Resources Ltd. (SYH:TSX.V; SYHBF:OTCQX; SC1P:FSE).

The miniscule share capital structure at 16,467,806 (pre-funding) allows for tremendous price elasticity if the current uranium mania escalates in 2024. Why I like the strategy is that if, for some reason, the uranium boom goes the way of the lithium space in late 2023, there is very little downside risk in a CA$2.9mm explorer with less than 20mm share issued.

On the upside, it will take very little buying pressure to take the price into the CA$.50-1.00 range, thus offering subscribers multi-bagger upside versus minimal downside risk.

In speaking with Alex on the weekend, he has assured me that my subscribers will be protected up to CA$500k, so I am going to sell the 25,000 WUC/WSTRF held in the GGMA Portfolio Account at CA$2.00 (or better) and reallocate the CA$50,000 into 275,000 shares of TCEC/TCEEF units that come with 275,000 CA$0.30 warrants exercisable for two years.

Any kind of exploration success in the Athabasca Basin will be met with voluminous demand, so the upside leverage is potentially explosive.

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Important Disclosures:

  1. [Skyharbour Resources Ltd. and Tisdale Clean Energy Corp.] are billboard sponsors of Streetwise Reports and pay SWR a monthly sponsorship fee between US$4,000 and US$5,000.
  2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of [Cameco Corp., Western Uranium & Vanadium Corp., Tisdale Clean Energy Corp., and Skyharbour Resources Ltd.].
  3. [Michael Ballanger]: I, or members of my immediate household or family, own securities of: [All]. I determined which companies would be included in this article based on my research and understanding of the sector.
  4. Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
  5. This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

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Michael Ballanger Disclosures

This letter makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. Always consult your registered advisor to assist you with your investments. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and options trading and we recommend consulting a financial adviser if you feel you do not understand the risks involved.

( Companies Mentioned: CCO:TSX; CCJ:NYSE,
NXE:TSX; NXE:NYSE.MKT,
SYH:TSX.V; SYHBF:OTCQX; SC1P:FSE,
TCEC:CSE,
WUC:CSE; WSTRF:OTCQX,
)

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