Monday, December 26, 2011

Athabasca Uranium (ATURF) Digging Brand New Sites

The eventual end of the program that extracts fissionable material from decommissioned Soviet-era nuclear warheads will require nuclear plant operators to find new uranium supplies.  Uranium producers can expect no shortage of capital to chase new deposits.  Athabasca Uranium (ATURF) is going after uranium in Canada.

I have concerns about the relevance of the management team's expertise.  There is little room for doubt about their collective talent, although I'm having difficulty looking up the operating histories of some of their previous companies (specifically Kinetex Resources and Choice Resources Corp.).  The thing about uranium is its uniqueness among energy sources.  Its radioactivity requires special handling far above and beyond normal mining safety protocols.  Its potential use in the most lethal weaponry possible make it subject to stringent controls on reporting and transportation.  I truly believe there only a small number of mining people on the planet with expertise that is germane specifically to uranium and other radioactive resources.  It's kind of nice that one ATURF director has nine years of experience with uranium explorer Northern Continental Resources (merged with uranium explorer Hathor in 2009).  Another director has a long background in nuclear energy.  I still wish the company had more nuclear bench strength in its management rather than its board.

All of the company's projects are still in the early surveying and drilling phases, so evaluating any of them is impossible for now.  At least they're digging in an area known to be productive.  I wish they had more capital because $4M doesn't sound like much for the number of sites they need to drill.  ATURF needs some 43-101 reports in 2012 on what they find.  Stay tuned.

Full disclosure:  No position in ATURF at this time.