Australia: Land of Uranium (and Thorium) Reserves: And Significant New Discovery at Edge of Cooper Basin, South Australia During a Uranium Bull Market

 

     Radioactive ores were first produced in Australia in 1906. As the graphs below show, 2000-2015 was the peak of Australian uranium production. Australia is by far the first in the world in terms of uranium reserves. The map below shows the mines and deposits.

 

     Oddly perhaps, Australia has no nuclear power plants. Anti-nuclear sentiment has been prevalent in the country in the past, even affecting uranium mines. There was a ban on uranium mining in Western Australia that was removed in 2008 by the Howard administration. A ban on Queensland uranium mining was removed in 2012 but reinstated in 2015. A ban was lifted in 2012 in New South Wales as well. Opposition against uranium mining was led by the Australian Labor Party (ALP). Virtually all Australian uranium is exported.

     In January 2021 Australia closed its largest uranium mine, the Ranger Mine, after 40 years of production. While Australia has by far the largest uranium reserves, in 2021 it was the fourth largest producer of uranium after Kazakhstan, Namibia and Canada. Now, only two uranium mines are producing in Australia: Olympic Dam and Four Mile, both in South Australia. The closing of the Ranger mine is expected to result in a medium-term 20% drop in Australian uranium production. Some historical trends in production are shown below.

 

 

 

Australia is Rich in Thorium Too

     As the graph below shows, Australia is tied with the U.S. as the world’s third richest country in thorium reserves. While thorium has been used in the past as a nuclear fuel, there are currently no reactors using it and thus there is no current market for thorium. There is no current production of thorium in Australia, and it is thought that there won’t be production in the future either. Reserves and locations of undeveloped thorium in Australia are shown below.

 

 

Big Lake Project on the Edge of the Cooper Basin

     With only two operating mines, the search for the most economical to mine resources was on. There has not been a significant greenfield discovery of high-grade uranium ore since 2007 when the Samphire Uranium Project was developed. That has changed with recent drill tests indicating medium-grade uranium ore in South Australia on the edge of the Cooper Basin by Alligator Energy. While the ore quality is not as high as that of the Samphire project, it is a thicker accumulation. Drilling began in May 2024. The drill hole results are shown below:

 

・Hole AC24-021 — 20 metres at 110 parts per million (ppm) uranium from 106 metres, including 1 metre at 241 ppm uranium from 123 metres

・Hole AC24-021 — 1 metre at 185 ppm uranium from 129 metres

・Hole AC24-022 — 5 metres at 130 ppm uranium from 107 metres

・Hole AC24-023 — 5 metres at 45 ppm uranium from 104 metres

・Hole AC24-025 —10 metres at 120 ppm uranium from 180 metres

 

The ore is hosted in paleochannel sand units. More initial and follow-up drilling is in progress and planned. Uranium-bearing fluids migrate upward along fault planes from there Big Lake granite suite that serves as the uranium source rock. They collect in tabular bodies in the paleochannel sands. Some of the geological information is shown below.

 

 

The Current Uranium Bull Market

     One reason the Alligator Energy discovery could be profitable is that uranium is currently selling at premium rates, As the graph below shows, this bull market is significant. There has not been such a peak in prices since around 2007. As the graph states, uranium does not sell in an open market like other commodities, but contracts are negotiated privately. The bullish trend began about eight years ago but has increased much since 2022.

 

References:

Alligator Energy Makes Uranium Discovery During First Drill Program at Big Lake Project. Gabrielle De La Cruz. Investing News Network. August 14, 2024. Alligator Energy Makes Uranium Discovery During First Drill Program at Big Lake Project (msn.com)

Significant New Uranium Discovery at Big Lake Uranium Project, South Australia. Alligator Energy. August 13, 2024. 2924-02838091-2A1540662&v=fc9bdb61fe50ea61f8225e24ce041a0e155a9400 (markitdigital.com)

List of countries by uranium reserves. Wikipedia. List of countries by uranium reserves - Wikipedia

Uranium mining in Australia. Wikipedia. Uranium mining in Australia - Wikipedia

Uranium and Thorium. Australian Government. Geoscience Australia. Uranium and Thorium | Australia’s Energy Commodity Resources 2023 (ga.gov.au)

List of countries by thorium resources. Wikipedia. List of countries by thorium resources - Wikipedia

Will the Bull Market in Uranium Continue? Andrew Hecht. Bar Chart. August 16, 2024. Will the Bull Market in Uranium Continue? (msn.com)