Transcription of The Stock Network Interview with Alligator Energy (ASX:AGE), CEO and Managing Director Dr Andrea Marsland-Smith Robertson
Lel Smits: Alligator Energy is advancing its flagship Sandfire uranium project in South Australia, where it plans to extract uranium through a low-cost in-situ extradition method. The company has recently added the Plumbush deposit to the Sandfire resource, completed its field recovery trial and launched an extensive drilling program to grow the project further. I’m joined today by Alligator Energy CEO and Managing Director to discuss Sandfire’s growth, the path to production and the outlook for uranium.
Andrea, welcome back to the Stock Network.
Andrea Marsland-Smith Robertson: Thank you, Lel. Thank you very much.
Lel Smits: Now, Andrea, for investors that are new to Alligator Energy, can you outline what you think makes Sandfire your flagship project and also what makes it an attractive project?
Andrea Marsland-Smith Robertson: So look, Sandfire is in South Australia, which is one of the premier uranium mining and exploration portfolio districts in the world, meaning that it’s supportive of uranium exploration and mining. And it’s been exporting uranium for over sort of like probably 50 years. And so the Sandfire project is the next uranium mine to be permitted in Australia.
So there’s no uranium mines before us and certainly none in the next five to 10 years, except for our project that will be permitted in Australia. So we really are the next uranium mine to come online. So being in South Australia and particularly near Wayella, which is a regional town in here in South Australia, it’s not a remote project either.
So it’s close to infrastructure, power and water, skill sets that we need for the workforce. So it’s in a great location as well, as opposed to our peers, which are all in remote areas in South Australia. But that’s just got a competitive financial advantage there.
But really, we’ve been working on the Sandfire project for the last three or so years, de-risking the project. And now we’re ready to go into feasibility study, which is currently underway and our mining lease application. Brilliant.
Lel Smits: And in terms of growing the uranium resource, adding the Plum Bush deposit as materially lifted the Sandfire resource, can you tell us about the potential of the current drilling campaign, also testing the corridor between Blackbush and Plumbush?
Andrea Marsland-Smith Robertson: Sure. So we started out, we announced our maiden resource for the Blackbush deposit, which was 18 million pounds a couple of years ago. We’ve been drilling around Blackbush to make sure the quality of that deposit is great and solid and hangs together.
And so that 18 million pounds supports a 12-year mine life at 1.2 million pounds of production per year. So the addition of the Plumbush asset that we recently announced towards the end of the financial year has put another 12 million pounds into that inventory, which now we’re looking at a 30 million pound project. Now, putting that in context, most of the US uranium mines, which are similar in situ recovery mines, they have around 30 million pounds.
So we’ve got a robust, producible inventory here. So we’re looking at increasing that mine life north of 12 years now. And particularly then also, that doesn’t include the drilling that we’ve been doing in between the Blackbush and Plumbush areas.
So we recently commenced an aggressive drilling campaign. We stepped out 600 metres from the southern extension of Blackbush, and we’ve hit the same mineralisation. So we know there’s more pounds to be discovered on top of the 30.
So now we’re looking at a 30-plus million pound project, which is a very robust in situ recovery project. Absolutely. And in terms of Big Lake extending Alligator Energy’s uranium opportunity, the project also in SA has delivered some promising drill data.
Lel Smits: What have you found? And also, Andrea, can you outline how it fits into the broader Alligator story going forward?
Andrea Marsland-Smith Robertson: Yeah, look, the Big Lake project sits in the Lakehead Basin, again, in South Australia. It’s a project that was a conceptual project back in a few years ago. We worked for two years to work out it was such a big land holding that, where do you start? But really, we were the first mineral explorers for uranium in what is traditionally an oil and gas basin.
Now, that’s significant because in Kazakhstan, they have very large in situ recovery projects there associated with oil and gas basins. So we were the first mineral explorer to explore for uranium in this province. And in August 24, we had success in finding uranium in sediments, which is what you want to find in sands, which indicated that we’ve got uranium in the system.
Now, these systems in this top geological setting are quite large. So in Kazakhstan, the systems run for 55 kilometers in length. So they’re very large systems.
And Kazakhstan produces between 40 and 50% of the world’s uranium production. So this is the scale that we’re after here. So we’ve got some really good early indicators.
Our follow-up program this year has found extensions. We’ve confirmed that we’ve got the right ingredients there. And it’s really giving us encouragement to keep going with this project and start some serious exploration to try to uncover the large system that we potentially could have there.
Lel Smits: Brilliant. And Andrea, finally, uranium demand and also the outlook with nuclear power gaining renewed attention globally. What factors do you think are driving this uranium demand? And also, what’s your outlook for the uranium market?
Andrea Marsland-Smith Robertson: Yeah, well, it’s a number of things.
So, you know, nuclear now isn’t simply being driven by decarbonisation anymore. It’s more about energy security. We have rapidly increasing electricity demand.
And also the growth of AI and data centres, which are all very big pool on electricity, are all strengthening the case for nuclear power worldwide. At the same time here, we just don’t have a uranium supply that has responded at anywhere near the same pace. And in fact, it’s been quite stagnant.
Because the uranium price has been down for quite some years, there’s been no exploration or investment in the space. So we have a few legacy mines that are restarting. Ours is a new project.
And so we’re getting that into production. And really, in from the World Nuclear Association conference in London, and they see the requirements are doubling for nuclear power by 2040. So new uranium mines take a long time to come into play.
And again, there’s not many that will be coming online in the next 10 years really to supply the gap. So what we’re seeing in the long term uranium prices, which is the space that the nuclear utilities purchase the uranium, it’s gone from $81 a pound this time last year to now $96 a pound. So it’s telling you now that utilities are starting to really focus on securing that future supply wherever that’s coming from.
So while the spot price is often volatile, the underlying fundamentals actually very, very strong. And it’s a very attractive environment for projects, not just for Sandfire, which is great timing in the current macro climate, but also bringing on Big Lake, having some aggressive exploration there to start bringing on some new projects into the worldwide landscape of uranium projects.
Lel Smits: Andrea, thank you for your outlook on uranium and also the update from Alligator Energy.
Andrea Marsland-Smith Robertson: Thank you very much, Lel.
Ends