There are hundreds of resource explorers in the Canadian public markets and, of those, a startling number exist in the uranium space.
The bad news on that is, it represents a real oversupply of companies in the space.
The good news on that is, half will never stick a drill in the ground and, of those that do, half again have as much idea what they’re doing as an Alabaman eating with chopsticks.
The number of teams in the Athabasca Basin with real world uranium exploration knowledge and pubcos with the desire to utilize them brings the number of investment targets down to a very manageable few.
Atco Mining (ATCM.C) has no idea how to drill for uranium. Absolutely none.
But it does have a pretty interesting property that it knows is WORTH drilling, and it’s JVing with a company, in Standard Uranium (STND.V), that has the best technical team in the uranium business to get busy on that project – AND that has done work on it before.
How do I know that project is interesting? Because Standard doesn’t mess about with garbage.
I know the Standard Uranium crew well, and place them in the upper echelon of my ‘good guys who aren’t looking to screw anyone over and can be trusted to tell the truth’ list.
I know they merit a place on that list from a long history of working with them. I know it from seeing CEO Jon Bey many years back at a weed deal that went sideways due to executive chicanery that didn’t involve him, and how he put in countless hours of unpaid work, long after it had all gone bad, trying to make up for the misdeeds of others and get iunvestors whole. Back then he told me, “You’ve got one reputation and it’s worth protecting always.”
And I know it from the early days of Standard, when Bey traveled the world telling his story and got home to find the drill had broken in the shifting ice and he was out of drill cash and bigger players were trying to poach his team and somehow he knuckled down and kept the team together AND brought in new properties AND raised money in a down market AND got drilling again AND investors saw the stock run.
Every part of that challenge was harder than it should be, and every part of it was something anyone else would have cut their losses on and walked away, but Jon Bey fucking stood and his team got in behind him when they could have made more money doing otherwise, and god damn it if that isn’t a thing worth recognizing in this business, filled to the brim as it is with miscreants and douchelords and lifestyle CEOs with more tickers under their name than hot dinners.
Standard dug its way out of the mire and then – THEN – they saw this project, partnered up with Atco to get make light work with many hands, and said ‘let’s get drilling.’
Credit to Standard AND credit to Atco for picking the right guys to buddy up with.
SO WHAT NOW?
Yer damn right.
The first drilling campaign on the Atlantic project for Atco and its joint venture partner Standard Uranium Ltd. began less than a week ago with crews arriving on Feb. 26. Logistics are running smoothly on site and drilling is nearing the target of the first drill hole. The campaign is expected run 2,000 to 3,000 metres across four to six drill holes […] “I am thrilled to kick off the 2024 drilling season in the Athabasca basin as a member of both parties of the joint venture. I look forward to the advancement of our Atlantic project in the coming weeks and providing updates along the way,” stated Neil McCallum, PGeo, director of Atco.
Yeah, man. Plunge that metal down hard.
So, from my perspective as an investor in both companies – and I am, full disclosure – I love that they’ve separated themselves from the pack by putting holes in the ground. Half the CEOs out there, even those who’ve raised money to do so, will never execute an actual drill program because the drill can poke holes in a story as much as it can a piece of ground.
But here’s ATCO not just raising money, but raising flow-through money.
Atco is pleased to announce that the company will conduct a non-brokered private placement for gross proceeds of up to $1.25-million.
The offering will consist of a combination of non-flow-through [NFT] units at a price of five cents per NFT unit as well as a flow-through [FT] units at 5.75 cents. Each NFT unit will consist of one common share of the company and one common share purchase warrant. Each FT unit will consist of one common share of the company to be issued as a flow-through share within the meaning of the Income Tax Act (Canada) and one warrant. Each warrant will entitle the holder to purchase one common share of the company at a price of 15 cents at any time on or before that date which is 24 months after the closing date of the offering.
What does that mean?
Tax credits, kids, based on REAL WORK being done on the ground, not just fundraising.
A flow-through share is a type of common share that permits the initial purchaser to claim a tax deduction equal to the amount invested. The flow-through share regime allows public companies to transfer to investors certain exploration expenditures conducted on Canadian soil.
If a company takes flow-through money from you, the investor, they HAVE to spend that money on the ground.
Whan a mining explorer takes that path, there’s a commitment there to you, the retail Joe.
They’re not just doing work. They’re not just setting up a drill program. They’re committing to moving rock.
“I am highly encouraged by our developing story,” says Etienne Moshevich, chief executive officer of Atco. “This is why I want to give our shareholders and investors a chance to take part in what we hope will be a success drill program and beyond. I want to be very clear and point out that I will be subscribing in this financing. Our story is only beginning to develop and I look forward to updating our shareholders with our progress over the coming weeks.”
So let’s look at the Atlantic and why these guys are into it.
The Atlantic project encompasses seven mineral claims, covering a total area of 3,061 hectares, located in the Mudjatik geological domain, a region known for its recent significant discoveries, including the Hurricane uranium deposit by IsoEnergy. The project spans 6.5 kilometres along an 18 km long east-west conductive exploration corridor, which is home to several other uranium sites. In 2022, Standard Uranium conducted a detailed ground gravity survey on the project, uncovering numerous subsurface anomalies indicative of potential extensive hydrothermal alterations within the sandstone and near the basement conductors.
Historic drilling efforts have yielded notable findings such as Cameco’s drilling in 1992 (with hole BE-04) revealed concentrations of 0.06% U3O8 (triuranium octoxide) over a 0.5-metre section of sandstone and subsequent drilling by Denison Mines in 2012 (with hole BL12-13), adjacent to BE-04, identified a metal-rich fault zone within the sandstone, situated 130 metres above the underlying basement rocks. This zone contained 10.2 parts per million uranium, 786 ppm lead, and 2,270 ppm zinc across a 0.1-metre section.
Translation: Land makes radiation machines go beep beep.
For mine, you’ve got to respect the workers, the dudes that do what they said they would, that tap the best people they know to do it, and waste no time getting in there while raising cash specifically for the task.
Attaboy lads.
Atco market cap is $2.5 million. Lots of room to run on positive results.
— Chris Parry
FULL DISCLOSURE: As I said n the piece, these companies are in my Equity Guru portfolio and, if you hadn’t figured it, they’re marketing clients of mine.
