The urgency set by science is clear: to mitigate the severe impacts of climate change, emissions must be slashed by nearly half by 2030 and reach net-zero by 2050. Meeting these targets necessitates a fundamental shift away from fossil fuels, steering towards clean, accessible, affordable, sustainable, and reliable alternative energy sources.
Renewable energy sources, such as solar, wind, water, waste, and geothermal heat, are bountifully provided by nature. They have the advantage of being constantly replenished and release minimal or no greenhouse gases and pollutants. Despite fossil fuels still dominating global energy production, accounting for over 80%, there is a notable shift towards cleaner energy. Currently, about 29% of the world’s electricity is generated from renewable sources, indicating a gradual but significant move towards greener energy solutions.
In this feature, we look at movements in three future energy sources: uranium, helium and hydrogen and some Australian companies doing good work in each of these sectors.
Uranium should not be feared
The spot price of uranium began the quarter at US$55.50 per pound and soared to a 14-year high of US$73.50 by the end of September. Concurrently, long-term market pricing also saw an increase, moving from US$56 per pound to US$62 per pound.
This uptick in prices, particularly noticeable from late August, was driven by tightening supply. Throughout September, a surge in both the volume and price of uranium was observed, primarily due to the heightened activity of traders, investment funds, and some suppliers competing for available uranium. Reports also indicated that some nuclear utilities were purchasing uranium on the spot market.
By August, the volume of uranium contracted under long-term agreements for the year had already matched the 2022 level of approximately 120 million pounds of U3O8. The market saw an influx of Requests for Proposals (RFPs) from nuclear utilities from August onwards, adding to the demand pressure.
Cameco, a major player in the uranium market, announced that its planned production for 2023 would fall short by about 3 million pounds, leading the company to purchase additional material on the market.
The uranium supply chain faced further challenges due to geopolitical events. A coup in Niger, along with ensuing logistics complications, disrupted production at a French-owned uranium mine for a month. Anti-French sentiments within Niger also raised concerns about potential long-term supply risks from the region.
Post-quarter, in October, the volatility in spot uranium prices persisted. Sellers responded to the scarcity of available uranium by pushing up prices further. The Nuclear Energy Institute (NEI) hosted its International Nuclear Fuel Seminar in Charlotte, North Carolina, where extensive discussions between nuclear utilities and potential uranium suppliers took place, highlighting the ongoing dynamism and complexities of the global uranium market.
Helium is poised for growth
The global helium market is poised for growth, with its valuation projected to increase from $4.45 billion in 2022 to $5.03 billion in 2023, reflecting a compound annual growth rate (CAGR) of 12.9%. This market expansion, however, is set against a backdrop of global economic challenges. The conflict between Russia and Ukraine has significantly disrupted the path to economic recovery post the COVID-19 pandemic, at least in the short term. The repercussions of the war, including economic sanctions on various countries, a surge in commodity prices, and supply chain disruptions, have sparked inflation across a wide range of goods and services globally. Despite these challenges, the helium market is expected to continue its growth trajectory, reaching an estimated $6.48 billion by 2027, at a CAGR of 6.6%.
The helium market encompasses the sales of both liquid and gaseous helium. These products find extensive use in various sectors, including medicine, scientific research, refrigeration, aircraft gas, and as coolants for nuclear reactors. The market values reported are based on 'factory gate' values, which represent the price of goods as sold by manufacturers or producers. This pricing includes not only the physical products but also any related services provided by the creators of these goods. The market's scope covers sales to various entities such as downstream manufacturers, wholesalers, distributors, retailers, as well as direct sales to end customers.
Hydrogen projects increase
In an effort to diminish the global carbon footprint, both industry and government leaders are increasingly focusing on hydrogen as an energy carrier, particularly the variant produced through renewable-fueled electrolysis, known as green hydrogen. As of 2022, Australia has emerged as a leader in this field, having established the most green hydrogen plants in the world.
There's also a noticeable surge in the number of projects announced globally for the production of low-emission hydrogen. If all these proposed projects materialize, the annual production of low-emission hydrogen could hit 38 million tonnes (Mt) by 2030. However, it's worth noting that 17 Mt of this projected figure is from projects that are still in the early stages of development.
Comparing these projections to past data reveals a significant increase. The potential production from announced projects by 2030 is 50% higher than what was projected at the time of the International Energy Agency’s (IEA) Global Hydrogen Review 2022. Of this potential production, only 4% has reached the stage of a final investment decision (FID), which represents a doubling from the previous year in absolute terms, now nearly 2 Mt.
Breaking down these figures further, 27 Mt of the total projected production is expected to come from electrolysis using low-emission electricity, while 10 Mt is anticipated to be produced from fossil fuels, coupled with carbon capture, utilisation, and storage technologies.
Aura Energy
Aura Energy Ltd (ASX:AEE, AIM:AURA) remains dedicated to accelerating the development of the Tiris Uranium Project in Mauritania and progressing the Häggån Polymetallic Project in Sweden.
Key developments in the Tiris Uranium Project during this period include:
- The Front-End Engineering Design (FEED) is on schedule for completion in Q4 2023.
- The Tiris Uranium Resource stands at 58.9 million pounds of U3O8 (113 million tonnes at a grade of 236 ppm U3O8), with further potential being explored as indicated by an Exploration Target announced after the period.
- Ongoing negotiations for offtake agreements are taking place in a context of rising uranium spot prices, with the World Nuclear Association reporting increased demand projections.
- The renewal process for the Tiris tenements and the granting of the exploitation agreement are progressing as expected.
For the Häggån Project, the Scoping Study has been released, revealing considerable scale and flexibility:
- The post-tax Net Present Value (NPV) is estimated to be between US$380 million and US$1,231 million, not accounting for U3O8 by-products.
- The project encompasses a diverse range of commodities for future markets, including vanadium, potash, nickel, molybdenum, zinc, and potentially uranium.
- Efforts are underway to secure a 25-year Exploitation Permit.
- The Scoping Study encompasses less than 3% of the known 2.0 billion tonne Mineral Resource Estimate at Häggån.
Following the reporting period, the Swedish Government has proposed legislation to parliament aimed at supporting a transition to 100% fossil-free energy production, including the expansion of nuclear energy.
Alligator Energy
Alligator Energy Ltd (ASX:AGE, OTC:ALGEF)’s quarter highlighted significant progress across its uranium and energy minerals projects.
At the Samphire Uranium Project, drilling efforts continued throughout the quarter, culminating in 118 holes drilled for the year, with 45 of these completed during the reporting period. High-grade uranium results within the Blackbush JORC Mineral Resource envelope have bolstered confidence in upgrading the Mineral Resource Estimate from Inferred to Indicated status. Drilling on the edge of the Inferred Mineral Resource has also revealed that uranium mineralisation extends beyond the current resource outline, setting the stage for year-round drilling starting in late January 2024.
AMC Consultants are working on an update to the Mineral Resource Estimate expected in November 2023, while Wallbridge Gilbert Aztec (WGA) is updating the Scoping Study to potentially increase production schedules and mine life.
A Heritage Survey with the Barngarla Determination Aboriginal Corporation was conducted, enabling drilling in new areas in 2024.
For the Big Lake Project, a field trip with traditional owner representatives gained in-principle support for drilling, pending final heritage clearances and regulatory approvals. The Nabarlek North Project's extensive exploration program is well underway, with the geophysics program completed and other sampling programs progressing.
In the energy minerals sector, the Piedmont Project saw a comprehensive data integration and review, including remodelling of electromagnetic targets with new petrophysics, petrology, and geochemistry data.
On the corporate front, Alligator Energy reported a cash balance of $37.9 million at the quarter's end, not including funds received from the Share Purchase Plan in October 2023.
Blue Star Helium
Blue Star Helium has delivered strong progress during the September quarter of 2023 with a focus on Voyager development in Las Animas County in Colorado and corporate reorganisation.
The company highlighted significant progress at Voyager, with all pre-production activities on track to kick off the first production in the December quarter.
Blue Star is also progressing with its Galactica and Pegasus projects, focusing on development planning and exploring commercialisation pathways.
These projects are considering a multiple-product stream design that would incorporate a CO2 by-product stream and in-field helium offtake gas with a 99.999% purity level.
On the corporate front, Blue Star Helium made significant changes to its leadership with Gregg Peters has been appointed as a non-executive Director, while Neil Rinaldi has taken on the role of non-executive chairman.
Meanwhile, Ross Warner has transitioned to the position of Executive President, Commercial and Legal.
As far as finances go, The company is placed in a healthy financial position at the end of the quarter, with a cash balance of A$2.468 million and no debt.
After the quarter, Blue Star Helium announced plans to raise an additional A$7 million through commitments and a share purchase plan.
GTI Energy
GTI Energy Ltd (ASX:GTR, OTC:GTRIF) (GTI or Company) made some excellent strides during the September 2023 quarter.
During the quarter the company declared a maiden Inferred Mineral Resource Estimate (MRE) at the Lo Herma Project located in Wyoming’s prolific Powder River Basin uranium production district. The MRE assumes mining by In-Situ Recovery (ISR) methods and is reported at a cut-off grade of 200 ppm U3O8 and a minimum grade thickness (GT) of 0.2 per mineralised horizon as:
4.12 million tonnes of mineralisation at an average grade of 630 ppm U3O8 for 5.71 million pounds (Mlbs) of U3O8 contained metal.
Lo Herma is around 10 miles from the US’s largest ISR U3O8 production plant at Cameco’s Smith Ranch-Hyland & ~60 miles from UEC’s Irigaray & Energy Fuels’ Reno Creek.
Highlights include:
- GTI’s combined Wyoming Inferred Mineral Resources grew to 7.37 Mlbs U3O8
- Lo Herma Project Exploration Target Range updated & increased by ~25%
- Permitting in progress for Lo Herma drill program targeting late 2023/H2 2024
- Aerial geophysics data collection completed at Lo Herma, Green Mountain & Loki West
- Carbon Neutral certification achieved under the Climate Active standard
Peninsula Energy
Peninsula Energy Ltd (ASX:PEN, OTCQB:PENMF) and its wholly owned subsidiary, Strata Energy Inc., experienced a productive last quarter with several key developments across their projects.
For the Lance Projects, a revised life of mine plan for the 'Ross & Kendrick' area was completed. This new strategy aims to initiate production by late calendar year 2024, positioning Peninsula as a fully independent, end-to-end uranium producer. The plan promises a robust and resilient development path, featuring an accelerated production ramp-up schedule. The highlight of this strategy is a comprehensive 5,000 gallons per minute (GPM) uranium in-situ recovery (ISR) plant, capable of producing up to 2 million pounds per annum of dry yellowcake (U3O8). Financial forecasts are optimistic, with sustainable monthly positive cash flow expected in the first full year of production (CY2025), a payback period of 3.5 years from August 2025, life of mine revenue for the Ross & Kendrick Project estimated at US$988 million, a Net Present Value (NPV8) of US$116 million, and an Internal Rate of Return (IRR) of 26.2%.
Construction activities for the expanded plant are slated to begin in late 2023.
Additionally, Peninsula announced the establishment of the Dagger Project post-quarter, which expands the company's mineral rights. Located roughly 20 kilometres northeast of the Lance Project's facilities, Dagger boasts an initial Mineral Resource Estimate of 6.9 million pounds U3O8 (Inferred) at an average grade of 1,037 ppm. A drilling program planned for FY2024 aims to facilitate a potential resource upgrade. The Dagger Project, along with the Barber Resource Area at Lance, offers substantial exploration and development growth potential for Peninsula.
On the corporate front, the company released its 2023 Sustainability Report and reported a cash balance of US$12.5 million along with a saleable inventory of 210,000 pounds U3O8.
Terra Uranium
Terra Uranium Ltd (ASX:T92) continued to build its corporate, technical functions and project geoscience understanding during the last quarter, as it expeditiously develops and expands Canadian field operations.
Terra Uranium executive chairman, Andrew Vigar said, “The Spring Field Program was completed during the quarter and our Core Projects of HawkRock, Pasfield and Parker have now been advanced from conceptual in nature to 18 drill ready target areas. The presence of anomalous uranium and pathfinders in our first drill hole at Parker is very encouraging, but there is much more to do. We are now actively advancing discussions with large JV Farm-In & Joint-Development Partners to fund drilling on our core projects starting this winter.”
Highlights from those projects include:
The Spring Field Program was completed during the quarter with the Pasfield Base Camp placed on care and maintenance ready to be activated again for the Winter program.
- Our Core Projects HawkRock, Pasfield and Parker have now been advanced from conceptual to 18 drill ready target areas. The Pasfield and Parker have seven targets each and HawkRock has 4.
- Expenditure commitments met on all 3 projects to at least the end of 2025.
- The results from the maiden drill hole at the 100% owned Parker Project have been received and evaluated, the first in the Parker Lake Project area, and the first within this 25km zone of ZTEM basement conductors on this section of the Cable Bay Shear Zone. A further 6 targets along this prospective zone remain to be tested.
- Diamond drill hole PK23-DD-01A at the first of 7 Parker Project targets confirmed uranium mineralisation is present with a peak of 2,000 cps in an altered and fractured zone in the basement.
- Seven drill targets defined from airborne and ground EM geophysics, geochemistry and ANT seismic at the Pasfield Project with planning underway for a Winter program.
- The Projects are approximately 50km west of Cigar Lake and 50km northwest of McArthur River, the world’s largest and highest-grade uranium mines, operated by Cameco.
- Further work is planned on all 3 Core Projects before the winter including reprocessing all layers of geophysical data (gravity, magnetics, and EM) using core sample physical property data and a full district scale structural analysis. This will complete the construction of a 3D Earth Model for targeting the next drill campaign.
- T92 is currently in advanced discussions with large JV Farm-In & Joint-Development Partners to directly fund drilling on our core projects starting this winter.
- T92 continues evaluation of uranium opportunities that complement our Core Projects.
Gold Hydrogen
Gold Hydrogen Ltd (ASX:GHY) is focused on the discovery and development of world-class natural hydrogen gas in a potentially extensive natural hydrogen province in South Australia.
It reported several highlights during the quarter, including:
- Gold Hydrogen’s Statement of Environmental Objectives (SEO) was gazetted by the South Australian Government allowing activity-based approvals to commence.
- Site construction activities commenced on the Ramsay 1 exploration well, in preparation for drilling.
- Independent reservoir rock characterization study completed, indicating that historical rock samples from the project area are capable of generating, facilitating migration, and storing hydrogen in situ.
- Data obtained from the airborne geophysical survey conducted by Xcalibur Multiphysics was fully interpreted by Nordic Geoscience and results integrated into Gold Hydrogen’s ongoing geological modelling and data analysis.
- CSIRO experimental soil gas survey results were incorporated into Gold Hydrogen’s ongoing geological modelling and data analysis.
- Mr Frank Glass appointed as Chief Exploration Advisor with effect from 5 September 2023.
HyTerra
HyTerra Ltd (ASX:HYT) delivered several news items from its Nemaha Ridge Project
Executive Director, Avon McIntyre said,“During the quarter, HyTerra focused on deepening our understanding of the Nemaha Ridge area through the acquisition and delivery of an airborne gravity gradiometry and magnetic survey over the areas in which our leases are located.
“This has given us a much-improved view of the subsurface and puts many of the historic wells with hydrogen occurrences in our leases into a geological context. The insights from this dataset area drive our lease acquisition and de-risking strategy to the point where we can identify notional drill sites. We look forward to the independent Prospective Resource assessment, which will high-grade our portfolio and inform our next steps.”
As of September 30, 2023, the Company’s cash balance was ~A$697,000.
Provaris Energy
In collaboration with Norwegian Hydrogen AS, Provaris Energy Ltd (ASX:PV1, OTC:GBBLF) continued its joint development efforts for the 270MW FjordH2 export project in Norway. The focus has been on securing site permits, optimizing the Pre-Feasibility Study (PFS), conducting systematic Quantitative Risk Assessment (QRA) studies, and preparing for detailed feasibility studies and Front-End Engineering Design (FEED) in 2024. A site visit to Ørskog, the project's location, was also undertaken by Provaris management, a non-executive Director, and a major shareholder.
For the Åfjord Project, in partnership with Gen2 Energy, a Prefeasibility Study commenced in August, aiming for completion by February 2024. The successful economic modeling and project site layout for Gate 1 have highlighted the attractive economics of Provaris’ unique supply chain solution for Norwegian export sites.
In Australia, Provaris is actively engaging with the Tiwi Land Council to advance the proposed draft project and land agreements submitted earlier this year, which include a significant community benefits package.
Progress has been made on the H2Neo carrier and prototype tank development. The prototype tank design is advancing as scheduled, with detailed structural calculations and finite element modeling completed.
From a corporate perspective, Provaris has collaborated with renowned German institutions to publish research that reinforces the competitive costs of compressed hydrogen supply into Europe. There is increasing interest from German utilities, end-users, and infrastructure owners in solutions for green hydrogen import by 2030. To facilitate investor relations activities in Europe, Provaris has appointed Frankfurt-based DGWA.