October 22, 2019

CanAlaska Uranium (CVE:CVV) Innovative Uranium Market

Midas Letter
Midas Letter
CanAlaska Uranium (CVE:CVV) Innovative Uranium Market

CanAlaska Uranium Ltd (CVE:CVV) (OTCQB:CVVUF) President and CEO Peter Dasler joins Midas Letter to discuss the Uranium market, how the company are being innovative as the Uranium prices trend sideways and the electrification of the world. CanAlaska is currently working with Cameco Corporation (TSE:CCO) on a project called West McArthur located in the Eastern Athabasca Basin. That basin has been coined “the “Saudi Arabia of Uranium” because its located in lowest quartile producers of uranium in the world with very high-grade mines. Since the Uranium market has been slow in recent times, the Company also holds properties prospective for nickel, copper, gold and diamonds.

Midas Letter
Midas Letter
CanAlaska Uranium (CVE:CVV) Innovative Uranium Market

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Ed Milewski: Joining me now, Peter Dasler, President and CEO of CanAlaska Uranium, ticker CVV. Peter, welcome to the show.

Peter Dasler: Excellent to be here, Ed. We’ve done a lot of work this summer, and I certainly want to update people on where we’re going over the next six months.

Ed Milewski: Yeah, now, I haven’t really been paying much attention to the uranium area. I sort of, I know that the price of uranium is quite – was quite low. Is it still quite low? Has it moved up at all?

Peter Dasler: The problem is, it hasn’t been moving. As supply has been dropping off, producers have been shutting down plants. But there was such a hangover after the Fukushima event, everyone geared up to produce a lot of uranium, and that just slowed down. However, in 2018, we came to a balance; we’re now producing more electricity from nuclear than we produced from before Fukushima, and we’re seeing a larger buildout of nuclear power plants around the world. Not so much in North America; we’ve got about three going here, with some small ones being tested now. But if you go through Asia or through the Arab states, and through Europe, you’re seeing a big buildout of nuclear power plants. So that means more uranium is needed.

Ed Milewski: Now, and there’s a lot of – this is a very topical area. We could talk about a lot of different things, but, now, I’ve been reading that some of the reactors that are being built now, are they building smaller reactors?

Peter Dasler: Yes, they are. They are planning to build smaller reactors.

Ed Milewski: Yeah.

Peter Dasler: But they have built some innovative situations. The Russians, two months ago, launched the first floating nuclear power plant, and moved that up to a city in Siberia. They’re going to have cheap electricity, they’re going to have a lot of hot water to heat buildings, and now, we’re seeing that the Chinese will put their first floating plant into production in December this year. 

Now, these aren’t large plants; they’re 100 to 150 megawatt plants, compared to the gigawatt plants, if you see, you know, in the big industrial uses. But there are even smaller ones than that. Bill Gates and Warren Buffett talking about building 30 to 50 to 70 megawatt plants, which are ideal for supplying small communities way in the north, or isolated locations. Now, the cost of the electricity from those is not going to be too much different from a large nuclear power plant, but is still going to be in that $0.07 to $0.15 a kilowatt hour, compared to (unintelligible).

Ed Milewski: Okay, so let’s talk about CanAlaska. CanAlaska, now, I looked at it briefly; now, you have a partnership with Cameco, correct?

Peter Dasler: That’s correct. We have several partnerships and, sort of, let’s say a business where project generators. But the largest one is with Cameco on a project called West McArthur. It’s a large uranium property next door to their biggest uranium mine, their biggest, richest uranium mine, McArthur River. And we’ve had some significant discovery holes on that project in the last two years, and over the last month, we have announced more discovery holes. So we think we’re well-positioned for a new discovery with all the infrastructure and all the benefits that come with a partnership with a company like Cameco.

Ed Milewski: And that’s, now, there’s the Athabasca Region is the most, the highest, the richest uranium area. If you’re going to find uranium, you want to find it there, correct? Is that the idea?

Peter Dasler: Well, certainly you can make a lot of profit from these very, very high-grade mines in the Athabasca. You know, they’re in the lowest quartile producers of uranium around the world; they have grades that run 10 to 15 percent uranium compared to anyone else, you know, in the 1 or less than 1 percent or 0.1 percent.

They’re not the lowest cost producers. In Kazakhstan, we have disseminated uranium in the sandstones, and they can pump that out of the ground. But certainly to supply the amount of uranium that’s needed for the nuclear power plants, being at the lowest quartile with these very high-grade mines, is a great place to be. We’ve got stability, political stability, and we’ve got lots of opportunities to find more mines.

Ed Milewski: Right, right. So now, I look and I see there’s only about 50 million shares in your company, is that right? 45, 50 million?

Peter Dasler: 45 million shares. Company’s been around over 25 years, and we’ve generally have funded ourselves from selling projects, being operators on projects…we’ve been very cautious with the funding that we’re taking in, and usually we’d have other large groups fund our exploration projects.

Right now, this summer, we funded our own project: $2 million in the ground at West McArthur, because we knew we could advance it, and we ended up with six more drill holes with uranium mineralization in them, and some very high-grade uranium, as well as a lot of, we’re starting to see now, the assays come in: a lot of copper and zinc, multi percent copper and zinc, that adds to the picture of a discovery for us.

Ed Milewski: Right, right. Now, did you ever roll your stock back, or were you able to do this on – it’s quite impressive that you don’t have 200 million shares outstanding like a lot of companies. You know, they keep raising money, they keep spending the money, they raise more money, and they end up having a lot of shares outstanding. But 45 million shares is very manageable.

Peter Dasler: We did change the structure of the company in 2010 to get our listing on the Toronto Exchange, and we were listed on the Toronto Exchange. Our share price needed to be over $1.00, and we consolidated our $0.13 shares to $1.30, but financed after that at $.160. We were trading at $1.60 when Fukushima happened. So right today at $0.25, you’re seeing the company that was consolidated in advance, and went on the main board of the Toronto Exchange; it wasn’t a rollback to restart the company, it was just progressing the company.

Ed Milewski: Right, right, right. Now, you’ve also doing some things in the nickel area, I understand?

Peter Dasler: Well, because the uranium market has been slow for some time, we had a group of engineers that had looked at a number of other projects for us. Our team has concentrated on Canada, and we saw that the nickel opportunities that exist in Manitoba were quite staggering. This area was the fifth-largest nickel producing area in the world, and now, we’ve seen that there’s no other exploration been going on there since 2005. And so we acquired some ground, but we drilled some test holes, we hit over 10 percent nickel in those drill holes, and now we’re out looking for partnerships to help us, because nickel, the sulphite nickel is very important for batteries. 

If you want to run your electric vehicle, then you’re probably going to need a lot more nickel in those batteries. Currently now we’re seeing 80 percent nickel in one of those batteries, and the more you can get into it, the more energy you can store. So, sulfide nickel deposits are becoming very topical; the nickel price has soared over the last six months, and we’re sitting, now, with about 500,000 acres of land in the Thompson nickel belt. We bought an old nickel mine, a very high-grade nickel mine, and we just drilled north of there and hit this very high-grade nickel, and we have two other projects that we’re working on right now.

They pale in comparison to what we’ve done in the nuclear end, with the uranium in the Athabasca, but I think they’re very strategic for the company.

Ed Milewski: Yeah. Now, tell me: who are the major shareholders of CanAlaska? Like, for instance, do you have some institutional shareholders? Management, etcetera?

Peter Dasler: Well, management has always had 10 to 12 percent of this company, but this year, we brought in a group that was headed by Sprott, Sprott Global, and so those clients and Sprott own around about 15 percent of the company; management has about 10 percent of the company right now, and we have, I think we’ve just had 30 percent support at our AGM. So we’ve got a loyal group of shareholders that have been with us to see this discovery phase. The institutional group (unintelligible) spearheaded by Sprott, and management has a significant stake in this company.

Ed Milewski: Yeah, I’ve followed the mining sector off and on for decades, and I have to say, right now is one of the toughest times to get a reasonable valuation. I mean, I’m just calling a spade a spade and saying, you know, I can show you all kinds of deposits; nobody seems to care. But that’s usually the opportunity, right? You buy them when everything is on sale. I know you mentioned Sprott, the company, but is also Eric Sprott, he’s put a lot of money into mining deals recently, and I know he did put some money into a nickel deal recently.         

Peter Dasler: Well, Ed, you know, you have to be contrarian in this business to get the edge for your shareholders. As a project generator, we look, you know, three or four or five years out, trying to anticipate what’s going to be in demand, and then we go and acquire the projects. In Canada, I was very fortunate: we have a huge database of information, and we can draw on that to select good pieces of ground. That’s how we still maintain 1 million acres of land in the Athabasca Basin, for uranium. That’s why we have a large position in the nickel district in Manitoba. But we acquired all of those years ago. Now the market is coming and saying, We need more uranium, we need more nickel. It isn’t got to the frenzy that we saw in 2005 and 2006 for uranium, but I think that’s coming rapidly. We see over, you know, 400 or 500 million pounds of uranium that’s short right now, that’s in demand; we see the demand for probably another large uranium mine every year to be discovered to satisfy that demand, and I’m quite happy to have CanAlaska positioned in front of that and wait for the crowd to come.

Ed Milewski: Yeah, for sure, for sure. I couldn’t agree with you more. Okay, so, I guess the thing about these things, they don’t turn when you want them to, necessarily, but eventually they do turn. And we’re starting to see evidence that metals – you know, gold certainly surged here in the last, you know, three, four, five months. Looks like it’s on a breakout pattern. You know, you think, the world seems to be slowing down in some of the, in Germany, for instance, it looks a little difficult. It should be very interesting going forward.

Peter Dasler: Well, I look at the fundamentals. You know, China has expanded tremendously over the last ten years; the rail networks rival the interstates that we have, that exist in the United States. These are high-speed, 200 mile an hour trains. You can’t run them without electricity. You can’t build that infrastructure with steel to make those rails; you can’t build buildings without having the copper in them, and I can see a huge deficit in that situation right now as the buildout continues.

Ed Milewski: Yeah.

Peter Dasler: Resources being consumed by China at a huge rate; we have great supplies of resources in North America, especially in Canada, and we have these very high-grade uranium mines where you can make a lot of money by selling to these world markets. There’s not just China; it’s India, it’s Pakistan, it’s Saudi Arabia, etcetera. It’s across the world. And so it’s coming, and I’m prepared to wait. I’ve seen this before.

Ed Milewski: The electrification of the world is upon us.

Peter Dasler: Yes, you know, it’s amazing that North America isn’t criss-crossed with 200 mile an hour train networks. But as soon as that starts to happen, the consumption of steel and copper and nickel will just go crazy. And I’m excited for that.

Ed Milewski: Yeah, yeah. Peter, great interview. Thanks for coming on the show. We’re going to leave it there, and we’re going to have you back at some point and we’ll follow up.


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