Both the uranium and green energy sectors were simmering quietly in the background of the global energy industry for years until the international market started to gather steam in its transition toward carbon-neutrality and energy sustainability and began to look for tried-and-true alternatives to hydrocarbons.
Now, the green energy market is experiencing a resurgence, prompting uranium developers and producers to reboot uranium assets held in suspension while the uranium spot price languished, and green energy-based producers of hydrogen to devote capital and labour in the creation of an entirely new market sector, built from the ground up.
In a moment we’ll investigate what ASX uranium and green energy companies have been up to this quarter, but first a look at the changing state of the market.
Green energy and uranium market overview
Russia’s war in Ukraine and the subsequent global oil and gas squeeze has reignited conversation around energy security as a strategic necessity, jump-starting the static uranium market.
The uranium spot price has surged over the last year:
While the Mineral Council of Australia’s Commodity Demand Outlook report offered a moderately strong forecast on uranium:
In its latest taxonomy report, the European Union agreed to consider nuclear power a sustainable energy source, reducing red tape and improving access to financing for companies moving within the industry.
In the same vein, Germany is considering operational extensions for its three remaining nuclear plants while Belgium has extended the life of two of its nuclear plants by 10 years and the UK has given development consent for two new nuclear plants.
Meanwhile, the green hydrogen industry is more difficult to define, given its nascent nature, but demand is nonetheless growing rapidly.
A report prepared by the International Energy Agency (IEA) for the G20 in 2021 places demand for hydrogen at 87 million tonnes in 2020 and forecasts that demand to increase to 500-680 million tonnes by 2050.
From 2020 to 2021, the Energy Transitions Commission valued the hydrogen production market at A$185 billion (US$130 billion), estimated to grow at a compounding annual growth rate (CAGR) of 9.2%.
Current hydrogen production is more than 95% fossil-fuel based, with green, renewable-based hydrogen production enjoying a renewed wave of interest.
In the spotlight: ASX uranium stocks
Peninsula Energy
Peninsula Energy Ltd (ASX:PEN, OTCQB:PENMF) is an ASX-listed uranium mining company which began in-situ recovery (ISR) operations in 2015 at its 100%-owned Lance Projects in Wyoming, USA.
The company is embarking on a project transformation initiative at Lance to change from an alkaline ISR operation to a low-pH ISR operation with the aim of aligning the operating performance and cost profile of the project with industry-leading global uranium production projects.
Peninsula’s early preparatory works have been delayed by supply chain and contract labour hurdles. The company expects to complete catch-up programs and an updated study for Lance in the coming quarter.
In more positive news, PEN has secured approval for a licence amendment to support its shift in uranium processing techniques, and Uranium Royalty Corp has acquired a 1% gross revenue royalty interest for the entirety of the Lance Projects area in return for US$1.25 million from a third party, a strong endorsement for the potential of the project.
Peninsula is well funded to continue its conversion activities, having US$7.6 million in cash on hand and a further possible US$15.6 million from 310,000 pounds of uranium currently in converter accounts as of June 30, 2022.
GTI Energy
GTI Energy Ltd (ASX:GTR) is focused on defining and developing economic in-situ recovery (ISR) uranium resources.
The company holds tenure in Wyoming’s Great Divide Basin and Utah’s Henry Mountains, having recently sold the Niagara Gold Project in Western Australia’s central Goldfields.
This quarter, GTR acquired an additional 13,800 acres (55.8 square kilometres) of contiguous ISR uranium exploration claims, abutting Rio Tinto’s tenure at Green Mountain in Wyoming, increasing GTI Energy’s holding to about 35,000 acres (141 square kilometres).
The company also raised $5 million in a share placement and sold the Niagara Gold Project for $4.5 million, generating plenty of funding for continued work on its uranium assets.
Between some recent drilling success – which revealed shallow mineralisation which GTR believes can support low-cost, rapid exploration – and a solid grasp of the conditions necessary for successful ISR, GTI Energy considers itself well places to capitalise on the growing uranium market.
To that end, GTI shares start trading on North America’s OTCQB market under the code GTRIF back in April.
Alligator Energy
Alligator Energy Ltd (ASX:AGE) is a uranium and energy metals exploration and development group with a multi-jurisdictional portfolio.
The company holds three uranium assets in various areas of Australia, as well as a battery metals project in Italy prospective for nickel, copper, cobalt, gold and platinum group elements (PGEs).
During the quarter Alligator confirmed the presence of high-grade uranium in drilling at the Blackbush Deposit, began a resource re-estimation to upgrade the Blackbush resource to the indicated category and kicked off a scoping study assessing ANSTO leach/ion exchange recovery.
AGE also conducted a re-examination of historical gravity data over the Samphire Project, giving the company a greater understanding of the area, before applying for two additional exploration licences around Samphire and a further 11 new licences at Big Lake.
Once granted this will take the strategic land holding for Samphire to 550 square kilometres (from 370 square kilometres) and for Big Lake to 10,787 square kilometres (from 818 square kilometres).
Finally, Alligator has secured approval from traditional owners for the Nabarlek North (Alligator Rivers) work program, which paves the way for execution of a large airborne gravity survey and regional auger and rotary air blast (RAB) follow-up drilling.
Valor Resources
Valor Resources Ltd (ASX:VAL) is focused on uranium, precious and base metals in Peru and Canada. The Picha Project in Peru is a copper-silver exploration project with a 3,000-hectare exploration concession south of Buenaventura's San Gabriel Gold Porphyry Project.
The company also holds land in the Athabasca Basin of Canada, with uranium projects at Surprise Creek, Cluff Lake, Hook Lake and Hidden Bay.
During the quarter, drilling at Surprise Creek generated some promising results of up to 2.1 metres at 4.37% U3O8, while geochemical sampling identified a 500-metre strike with rock chip ups to 6.37% U2O8, only partially drilled and open in several directions.
Copper was also identified in rock chip and soil samples at Surprise Creek, with concentrations as high as 5.9% copper in chips and 3,300 parts per million in soils.
At Cluff Lake, Valor identified seven priority targets backed up by historical data, geophysical interpretation and surface geochemical anomalies (0.15% uranium) and completed an airborne gradiometry survey to look for more areas of interest.
Speaking of surveys, Valor also completed an extensive airborne gravity gradiometry survey over Hook Lake and Hidden Bay, totalling 2,080 line kilometres at Hook Lake and 416 line kilometres at Hidden Bay.
In April, Valor acquired a further 60 square kilometres to the northeast of the Picha Project, situated along a regional northwest-southeast geological trend host to several deposits and prospects.
At the Picha Copper-Silver Project, Valor produced channel samples from the Ichucollo target of up to 1.45% copper and 9.1 g/t silver and delineated two new targets – the Occsani target, which returned rock chip samples up to 2.48% copper and 92 g/t silver, and the Chullunquiani target, which returned channel sampled up to 5.57% lead and 5.33% zinc.
Lotus Resources
Lotus Resources Ltd (ASX:LOT) is an ASX-listed uranium developer based in Perth, Western Australia, and focused on restarting the Kayelekera uranium mine in Malawi, Africa. Lotus owns an 85% equity interest in Kayelekera with the remaining 15% held by the Malawi government.
The project historically produced about 11 million pounds of uranium oxide (U3O8 equivalent) over five-year between 2009-2014, before closing to preserve the asset longevity due to a sustained low uranium price.
Kayelekera’s current mineral resource estimate is 37.5 million pounds of U3O8 at 630 parts per million (ppm).
Lotus is nearing completion for its restart definitive feasibility study expected to be released early this month and has also increased its total mineral resource estimate 11% to 51.1 million pounds uranium.
The resource estimate upgrade followed a 29-hole reverse circulation (RC) drilling program at the Livingstonia deposit, which both confirmed historical drilling results and extended the mineralised resource footprint.
A management visit to Malawi garnered fresh support from the government for a restart in production at Kayelekera, while negotiations continue for an updated mine development agreement which will set the fiscal regime for the project and company.
Discussions were also held with the ESCOM, the Malawian Electricity Utility, regarding the connection of the mine site to the national grid, and with several key stakeholders, including Karonga District Commissioner, non-government organisation (NGO) groups in Karonga and the local communities.
As of June 30, 2022, Lotus had cash in hand of $4.9 million (unaudited), exclusive of the restricted cash of $14.6 million held as part of an environmental bond.
In the spotlight: ASX green energy stocks
Frontier Energy
Frontier Energy Ltd (ASX:FHE) is developing the Bristol Spring’s Solar (BSS) Project 120 kilometres southwest of Perth, Western Australia, designed to be a major source of renewable energy and provide power as part of the company’s strategy to become a green hydrogen producer.
During the June quarter FHE produced preliminary results from a hydrogen study, indicating green hydrogen can be produced at the BSS Project earlier than anticipated, with existing infrastructure and access to the SWIS power grid enhancing the development timeline.
The company also selected Alkaline Water Electrolysis (AWE) as the preferred technology for green hydrogen production due to its technical maturity and identified several existing local water sources suitable for hydrogen production, negating the need for a desalination plant.
Finally, Frontier signed an MoU with global hydrogen experts, Nel Hydrogen Electrolyser AS (Nel) and ENGV to support the company’s hydrogen production ambitions.
FHE’s cash position was $4.8 million as of June 30 2022, with Hydrogen and Expansion studies on track to be released this month.
Provaris Energy
Provaris Energy Ltd (ASX:PV1) styles itself as an ‘early mover’ in the future of green energy, focused on developing integrated green hydrogen projects for export to regional markets through compressed hydrogen technology.
Provaris has been advancing the Tiwi Hydrogen Project on the Tiwi Islands of Australia’s Northern Territory, intending to build a solar farm, hydrogen electrolysis hub and hydrogen compression export port on the strategically placed islands.
Outline of the proposed Tiwi Hydrogen Project
During the quarter Provaris lodged a referral submission to the Northern Territory (NT) Environmental Protection Authority (EPA), continued outreach programs – supported by Austrade – to attract hydrogen offtake, project investment and technical partners, and in August completed a conceptual design that covers all aspects of the project from solar generation to shipping scheduling.
For the HyEnergy export project itself, PV1 completed milestones 3 and 4 (out of 5) for submission to the Western Australian government as part of the WA Renewable Hydrogen Fund grant.
The company also delivered an environmental assessment for a proposed offshore loading terminal, a H2Neo fleet cycle-time analysis, designs for shore crossing and subsea pipeline, unloading terminal designs, and an assessment of job creation for construction and operational phases.
As for PV1’s H2Neo Hydrogen carrier, Provaris has completed 90% of its contract design package for the ship, while the American Bureau of Shipping (ABS) has begun a Front-end Engineering and Design (FEED) review of the carrier.
ABS Consulting is also undertaking dispersion, fire, and explosion safety studies to advance HAZID analysis and Class Approval milestones in 2022, and small-scale testing is underway for structural steel plate and stainless-steel liner plates delivered to CFER Technologies, with cutting, machining and weld plans performed for testing.
Finally, PV1 executed an MoU with Northern Marine for a technical partnership to develop the GH2 carrier and advanced development for near-shore and off-shore compressed H2 unloading terminal designs suitable for Singapore and other target end-market port locations.
On the business development side of things, Provaris holds $11.5 million in cash as of June 30, 2022, and has kicked off a compressed hydrogen study for a connected supply chain transporting H2 into ports of Europe, while also advancing several opportunities to review compressed H2 as an alternative transport carrier into European markets.