The price of uranium has reached 10-year highs above $US53 per pound ($A158/kg) as supply concerns grow following Russia’s invasion of Ukraine.
Ukraine contains the world’s sixth largest uranium reserve of roughly 46,000 tonnes and produces the ninth highest volume of the resource.
Nuclear power accounts for 20 per cent of the United States’ energy sector, meaning Russia taking control of Ukraine could have significant effects on the uranium market, as world leaders continue to place sanctions against Russian trade.
In Australia, Vimy Resources has completed a $17 million placement to advance its Mulga Rock uranium project in Western Australia, showing local confidence in the sector.
Vimy managing director and chief executive officer Steven Michael said it was important for Australia to secure domestic supplies before Russia and Ukraine’s resources became unfeasible.
“The past few days have been exceptionally volatile for the global uranium sector, given the events… in Ukraine,” he said.
“The strategic value of uranium deposits in Tier 1 jurisdictions has never been more apparent and there are few new term development opportunities that meet those criteria.
Vimy’s new $17 million will be put towards completing the Mulga Rock bankable feasibility study, advancing pre-development site works at Mulga Rock, and commencing an extensive drilling program at its Alligator River project in the Northern Territory.
This will be Vimy’s first major uranium drilling program since 2019, as it hopes to upgrade the existing high-grade resource of 11.7 million kilograms at 1.3 per cent triuranium octoxide.
In December, Vimy achieved substantial commencement at Mulga Rock, satisfying its approved mining proposal just days before it was due to expire.
Had the approval expired, Mulga Rock would have been subject to more recent ‘no uranium’ legislation in Western Australia and the project would have been cancelled for the foreseeable future.
As it stands, Michael said Vimy shareholders had proven the market’s support for its new projects.
Vimy’s major shareholder and new institutional investors recognise the growing strategic value of both Mulga Rock and Alligator River project in Australia and Vimy’s development plants,” he said.
“The long-term fundamentals of uranium remain robust and this is reflected in the strong support from investors.
“Having a strong balance sheet allows Vimy to approach the uranium contracting cycle in a much more strategic manner.
“Also, the potential to establish two uranium projects in Australia at this time of heightened geopolitical uncertainty cannot be underestimated.”