Over the last decade, there have been times client companies have pointed me to their ticker, pitched that good things are coming, and just… not been able to make it happen.
Sometimes the drills don’t hit.
Sometimes the new partnership doesn’t get through due diligence.
Sometimes the funding doesn’t come through.
And sometimes the sector just sputters when we all thought it would roar to life.
Atco Mining (ATCO.C) was a deal pitched to me about a year ago that I wrote up once, touched on a second time, but it just didn’t kick over.
To be fair, it was a super small company looking to another company to do exploration for it in the field of uranium, while pivoting from the ‘salt caverns as hydrogen storage’ sector, while everyone was struggling to raise funds across the board, so it was kind of a triple miss, no matter how hard they tried.
And they tried.
You know who didn’t?
Me.
I mean, I wrote the stories and tried to help, that’s not what I’m talking about. But there was only so much I could say without it becoming tired and rote.
“Any day now,” just isn’t ny jam. I can’t tell my audience something is worth buying just because I cashed a cheque, and the truth was Atco was inexpensive and had upside and exposure to three sectors that I like, but the market wasn’t paying out those qualities at the time and if I wrote a story every week saying they were going to, not only would you not believe me, but it would have burned out Atco’s rep.
When people hear ‘any day now’ too much, and the day doesn’t come, they block you from their brain going forward.
So I paused. And Atco stopped calling. And things went quiet.
Until this week.
I know the prices are low, but $0.015 to $0.03 is a double, friends – on no news.
Market cap; $1.9 million, which has a lot of room to run before it’s near properly priced.
So what happened to get the price moving?
Nothing for the past six months, but a week ago things came to life with a $1.15 million raise announcement at $0.015 per share, which is now half the price of the market quote.
Usually financings would be priced at $0.05 or more, so this is a rare bird we’re seeing right now. The share price moving up during a financing would usually mean the word on the street is something’s coming, though I have no insight into what.
Insider filings show nobody selling, and a fair amount of buying back in September, so that supports the thinking that someone is loading up.
BUT WHAT IS IT?
I’m glad you asked.
On the uranium side, Atco is paying Standard Uranium (STND.V) to drill the Atlantic project for them in the Athabasca Basin. That covers 6.5 kilometres of an 18-kilometre-long, east-west-trending conductive exploration trend, which hosts numerous uranium occurrences and was Atco’s hail mary shot when the salt thing wasn’t booming. To be fair, it’s a nice project and STND are the best guys to be working it.
In year one of drilling, in a three-year effort to earn 75% of the project, Atco hit mineralization and satisfied the requirements of the option agreement.
- Uranium Found: Tests from drilling in winter 2024 showed significant amounts of uranium in several drill holes (ATL-24-002, ATL-24-004A, and ATL-24-005A). These findings were in areas thought to be good for finding uranium, where the right types of clays are present.
- Location of Uranium: The uranium was found in multiple layers starting from the sandstone down to deeper rock layers. This shows that the area under the sandstone (the base rock) is rich in uranium. Other elements often found with uranium were also discovered in large amounts in several drill holes.
- Confirmation of Geological Features: The structure and features within the sandstone and deeper rock layers matched what was expected based on previous studies. The drilling confirmed the presence of significant geological disruptions and zones that are typically good places to find uranium.
- Promising Early Results: The initial results from this exploration are very promising, showing that the theories about where to find uranium in this area were correct. There are still many places in this area that haven’t been tested yet, offering more opportunities for discovery.
If uranium kicks off again, and the most recent edition of the Vancouver Resource Investment Conference was all about how that’s likely, Atco could be on something nice for a very reasonable price.
But the company also has a thick roster of salt properties that, if I’m honest, I think are as important.
Why salt?
Two reasons:
- There’s a genuine shortage of salt out there in the world (no, really) specifically road salt.
- The best way to store hydrogen is in salt caverns – the caves left behind once you’ve exhumed the salt.
That second point is worth repeating – hydrogen has some rough storage requirements. It has to be underground, and it requires some flexibility, which is tough to do with standard tankers. Using salt caverns gives you the depth, flexibility, and low capex that makes for a perfect hydrogen storage option.
Atco has EIGHT salt projects and with a little work done, could start making solid doughbucks as a storage option for a burgeoning induistry.
Atco isn’t a client these days, but I’m a big believer in ensuring companies get what they paid for, even if it’s a year down the line when they don’t expect it, so I’ll be ensuring I keep an eye on things here as this deal evolves in the weeks and months ahead.
And, at this price, I might just have a nibble.
— Chris Parry
FULL DISCLOSURE: Not a client, no commercial interest, but has been in the past and I feel like I owe them. If that makes me conflicted, so be it.
