Published March 18, 2022
Bargain Barrel: Uranium prices just touched decade highs. Here are 9 dirt cheap ASX stocks with upside
On March 11 the uranium spot price gained a remarkable 13% to $US60/lb – its highest point since 2011.
$US60/lb is also the magic number a lot of aspiring developers use to justify the profitability of their future operations, so this was a big deal.
The trigger for this spike? Possibly news that the US is looking to ban its nuclear power plants from buying enriched uranium from Russia.
Meanwhile, nations around the world are scrambling for base load energy sources that aren’t coal or oil and gas related. That leaves only nuclear.
The projected uranium supply shortfall just keeps getting bigger.
Over the past year, most established uranium stocks have made solid, but not remarkable gains. Could the real upside for ASX companies still be on its way?
Here’s a run-down of nine cheap, sub-$15m market cap stocks with exposure to this exciting thematic.
THOR MINING (ASX:THR)
Market Cap: $10m
Cash on hand: $2.9m (Dec 31)
The diversified explorer has three projects within a historic high-grade uranium-vanadium mining district in Colorado, known as the Uravan mineral belt.
Uravan has produced +85 million pounds of uranium oxide and 660 million pounds of vanadium over the past 100 years.
The company is still working through approvals for an initial drilling program at the ‘Wedding Bells’ project, it said earlier this month.
This program was going to target high grade uranium and vanadium at the ‘Rim Rock’, Groundhog’ and ‘Section 23’ targets.
Thor believes there to be “high potential” at Section 23 which, because it was previously held by the government, has never been drill tested.
“This company is a sandstone paleo-channel play which will be a lot cheaper to process,” says stock picker Noel Ong.
“A combination of uranium and vanadium which will be great when the time comes to valuing extra credits.”
DELECTA (ASXLC)
Market Cap: $13m
Cash on hand: $2.9m (Dec 31)
The explorer chose a good time to hit the ground at the Rex uranium project in Colorado, as optimism surrounding future uranium pricing grows.
During the December quarter DLC completed an early-stage exploration program at Rex, with rock sample results confirming the presence of “high-grade uranium and vanadium mineralisation on old mine dumps and around the abandoned mine portals”.
The company also acquired a substantive database of historic drill and mining information, “and evaluation of this data has enabled drill targeting to commence”.
The company is currently suspended pending the announcement of a material acquisition.
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