George Glasier: Uranium Legend Talks Upcoming Uranium Boom and Best Way to Play
As president and CEO of Energy Fuels from 2006 to 2010, George Glasier put together a world-class management team, acquired several uranium projects and permitted the Piñon Ridge uranium mill in Colorado. In 2006, Energy Fuels appreciated 4500% in the market, making it the best performing stock in Canada that year!
Will the good years repeat? Increasing worldwide demand for uranium cannot be met by existing supply. Taking a new project into production is a tedious process meaning supply crunches are inevitable. The current price is so low that mines have been shutting down. This comes at a time when nuclear power plants are being built at incredible speed.
Modern, cheaper and safer, carbon neutral nuclear energy is replacing fossil fuels all over the world.
George Glasier’s new company, Western Uranium, (OTCQX:WSTRF, CSE:WUC), was launched just 18 months ago. Already, George has assembled a suite of 7 past producing mines, all located in the United States, boasting uranium resources exceeding 100 Mlbs. Additionally, the company has access to an existing mill and possesses the only fully permitted new mill location, which can be built at anytime.
Add to that a revolutionary mining technology called ablation and a recipe is in place for major success. Click below to hear about ablation technology, which reduces costs by over 50% and nearly eliminates mine waste.
Western Uranium is currently undervalued relative to its peers and owns a technology that can undercut it’s peers. Production can be achieved in just 6 months time. Palisade Global Investments is a major shareholder in Western Uranium and a supporter of management and the company.
Palisade Radio Host, Collin Kettell: Welcome back to another episode of Palisade Radio. This is your host, Collin Kettell. On the line with us today is a guest you might be familiar with if you have been in the uranium business for some time or if you participated as an investor in the last major uranium boom. His name is George Glasier and he was previously the president and CEO of Energy Fuels from 2006 until 2010. George, welcome to the program.
President and CEO, Western Uranium, George Glasier: Thank you, Collin.
CK: During your time at Energy Fuels you managed to put together a world class management team, acquire several uranium projects, and successfully permit the Piñon Ridge uranium mill in Colorado which was the first uranium mill to be permitted in the USA in 25 years. We were just talking about before we hit record on the interview that in your first year as president of Energy Fuels the stock appreciated by 4500%. That is not a typo. It went up 45 times in 2006 and ended the year as a biggest gainer by far on the TSX.
I want to start by highlighting the power of uranium as an investment for people coming into the space. There are so few companies to invest in; so few of quality that when interest comes into the space, as we have seen in the past, there are explosive moves. George, what is going to make another uranium boom come like we had back from 2002 to 2007?
GG: Well, I think the same forces are in play today. Basically the worldwide supply will not meet the worldwide demand. You take a look at all the projections and starting as early as maybe 2018, 2019 we are going to be short of uranium. Of course when the supply cannot supply needs prices are going to go up and it takes a long time to bring a uranium project on line. What we have is a situation where the shortage of uranium will not be satisfied even with a drastic increase in the price because it takes so long to bring projects on line. We have seen over the last couple of years projects being curtailed or actually shut down because of the low price of uranium we have today. That is going to compound the problem and theoretically skyrocket that price in that time frame.
CK: Well, George, let us step back a little bit to before 2006 and talk about how you found yourself in the small niche space like uranium. You quickly rose to the top and had one of the most successful companies at the time. How did you find yourself in the uranium space?
GG: Well, I started in uranium business back in the late ‘70s with a startup company, a privately-owned company. It became the largest producer in the United States; twice as big as anybody else. That company was very, very successful. But we sold the company because of the death of the majority owner. I got out of the uranium business in the early ‘90s. The price of uranium was pretty low on those days so I got into some other business ventures and stayed in those things until the uranium price started up in 2003, 2004 time period.
I started looking at the industry again and in 2005 decided it was time to try it again, so I set up a company called Energy Fuels and listed it on the Toronto Stock Exchange. That was when you talked about the drastic increase in the share price of Energy Fuels in 2006. We listed on the Toronto Stock Exchange with a reverse merger with a shell corporation and basically took that corporation and put in the key uranium assets that I had acquired. Obviously that is the company called Energy Fuels today which is a very, very successful uranium company in the US although I am not in management I’m still a shareholder in that company. That is kind of my real quick background.
I got out of the management of Energy Fuels in 2010 to take care of some of my other business interests and then got back into the uranium business about two years ago with the acquisition of some assets from Energy Fuels. That was how Western Uranium really got its start by acquiring some of the original assets I acquired for Energy Fuels. We did another reverse merger to go public and this time on the Canadian Stock Exchange and that is where we kind of stand the day.
CK: Well, we are going to get into Western Uranium a little bit more as we get deeper into the interview here. In terms of uranium, one of the reasons that I find it to be such an exciting investment is it is one of the few commodities where when the price of the actual commodity skyrockets, it does not necessarily affect the use of the commodity. That is because nuclear reactors, as a percentage of other costs, their fuel cost is only about 1 or 2%. When the price of uranium goes up substantially it does not cut back on the amount of people or utilities that want to use nuclear power. George, can you talk a little bit more about all of the reactors going on line and then the upcoming demand that we are going to see in the next few years that is going to drive the uranium price up?
GG: Sure. Of course in the world today we are our producing a great deal of electricity with nuclear energy. In the US we are the biggest producer of nuclear electricity, not as a percentage but actually in production. We got about a hundred reactors in operation and about three or four under construction and that is going to continue. There is no reason to shut these reactors down. There had been a number of reactors – a few reactors of the older design – shut down because they are somewhat inefficient and could not meet the new safety standards. But the new reactors being built now will produce some of the cheapest power that we have in the US.
This is the case around the world. China, India, and Russia are all building nuclear power plants at a break neck pace because the fact is, I think as you said, the fuel cost of reactors is almost insignificant in cost of production of electricity, and, of course, they are carbon free. It is one of those sources that produce electricity 24 hours a day without any carbon output. That is another real plus if you are looking at global warming. You have got to go to some sources to produce electricity around the clock. Nuclear is the only one that does carbon free other than, of course, hydro. But hydro is, again, limited by your hydro resources. Those countries that do not have that resource are looking to nuclear power. That is one of the things that are going to drive the boom of uranium. To fuel all our reactors, you got to have the uranium supply.
CK: Well, George, you just highlighted the demand for uranium in the USA. What you did not touch on is the source of uranium, which many of our listeners might know, primarily is sourced from outside the United States and imported that was done through a deal with Russia which has expired a couple of years ago where they were disassembling warheads and using the fuel for power in the US. Now a lot of the fuels coming from other countries, only a few million pounds, are actually produced in the US. That might be part of the reason why the new company you started just about 18 months ago, it is called Western Uranium; it is listed on the Canadian Exchange under WUC. You actually just got your listing earlier this week on OTCQX, which is significant in that US investors can now easily buy shares of the company. Congratulations on getting that listing.
But just in twelve to eighteen months you have already assembled some great assets. You have over 100 million pounds of uranium in the United States and you have control of a proprietary mining technology which we can talk about that is going to totally revolutionize the uranium mining business. On top of all that you have access to a fully permitted mill and a tolling agreement with an already existing mill. George, why not start out by giving us the overview of Western Uranium that you would give to an investor hearing it for the very first time?
GG: Okay, I would be happy to do that. We started the company only about eighteen months ago by acquiring some of the key assets in Colorado and Utah from Energy Fuels. Along with this were seven mines that were already permitted for operation and that is a key. Having mines you can put into production fairly quickly will allow us to be one of the next producers in the US or in the world. The assets you mentioned with the acquisition, the merger with another company called Black Range Minerals; that created a very large asset base in the United States. All of our assets are in the United States and that is one of the keys. The US now produces less than 10% of its consumption when you are talking about nuclear energy fuel. We think the US will be a key in providing additional fuel especially the US utilities that generate nuclear power.
We are asset based including as you mentioned the only fully licensed uranium mill that has yet to be built in the United States and a toll-milling agreement with the only existing mill that is operational in the United States. We are in a position to be in production fairly quickly, so that is kind of the basis. Then along with the acquisition of Black Range we acquire the rights to this new technology called ablation mining technology, which should, in our estimation, reduce the cost of production of uranium from the type of deposits that we have. This technology has been tested on a commercial scale, but it has not been employed at a mine site yet. Our next goal is to put this technology, actually at a permitted mine, and start the production.
CK: Well, worldwide cost of production, as defined by most mines which are hard rock mining techniques, are $50 to $60 per pound. Therefore, you have a lot of companies out there that are in a sitting and waiting game. You have pure optionality plays. Most of the uranium companies that exist today have spent tens of millions of dollars building up deposits that have no viability to go into production at current prices. While we do believe that uranium prices will go to $60 and beyond possibly in the next few years, you have decided to go ahead and put together a company that could be viable at $30, $35, $40 per pound and quite profitable through this ablation technology.
I would rather let you explain the ablation than me doing so, but essentially it is a technology that works within the mine. It turns the sandstone into a slurry. It then under high pressure shoots the slurry at itself which upgrades the uranium/vanadium ore by seven to eight times, and so by the time that you get your ore out of the mine gate you already are upgraded by a factor of eight times, which, of course, cuts down significantly on the cost. Do you mind adding to that a bit?
GG: I think that is a good description of the process. It is a patented process that was developed by some scientists from Wyoming, and even though it sounds simple it is not as simple as it sounds. There had been attempts to upgrade uranium ore over the past fifty years to find ways to cut the cost. The biggest problem in a lot of these is it could not be put into a commercial production scenario where the ablation technology has been put into a commercially or continuous slow process. It will take basically the rock out of the mine and allow you to remove a good part of that rock and just leave it at the mine site without using any chemicals. In the milling process, to remove the uranium from the rock you use chemicals. You dissolve uranium and sulfuric acid and then go through steps to precipitate it out and take it back out of the dissolved solutions.
The ablation process uses no chemicals. It is a physical process that you described where the slurry is driven against— particles are driven against each other and it releases that uranium coating from the sand. Then the sand, which is almost then like a clean beach sand, is re-deposited right into the mine. It does not change your mining cost you still have to mine it. What it changes is your transportation cost and your milling cost. If you take a look at the equations, and this is just common industry knowledge, of all those three, mining, milling, and hauling, the milling cost is the most expensive process. If we can reduce the quantity of product that we have to put through the mill we obviously reduce the cost.
Environmentally, it is also a real plus because the biggest problem with uranium mill is the disposal of the tailings, the waste from the milling process. We are cutting down. As you said, we upgrade this or we reduce the volume of material up to 80% of what we put through the mill. That means 80% less of these tailings material we have to dispose of, and that is a real economic advantage because we are producing less tailings so less disposal areas and less exposure to the environment. It is a real plus from that standpoint.
And we think the technology obviously could be used around the world will be first used in the US because we have the commercial machines ready to go. We have permitted mines. But we have some interest from other countries about using this and whether it is licensed to the other producers that is something yet we have not decided. Again, it works on all types of sandstone-hosted uranium deposits.
CK: George, Western Uranium, as you pointed out, has seven permitted mines which literally equates to tens of millions of dollars of past underground work, exploration already done and then, of course, the proprietary technology of ablation. You guys just got your OTCQX listing, also oversubscribed a recent placement. It is a cover basic G&A cost and cost for moving forward. But what is next? What does it cost to get into production and with uranium hovering around $29, $30 per pound, is it time to go into production right now or would you prefer to wait for slightly higher uranium prices?
GG: Well, higher prices certainly would not hurt. We are looking at a kind of a term price right now which is a bit more than the $29, $28. But with the term price today, our mines, we believe, would be economical. We are looking at the next stage is building. We have one commercial ablation machine. But for a mine like the Sunday Mine Complex, which is a complex of five permitted mines, we need to have maybe three or four of these machines to handle the output.
Our next step, obviously, will be to build additional ablation machines to put at the mine site. It is much more efficient to run that mine at full capacity. We could put one or two machines there, but when you staff up a mine like that, if you can get up to full production, your economics just look better. What we will be doing over the next few months is working on the construction of additional ablation machines to move to the Sunday Mine Complex probably sometime mid 2017. It looks like that would be the time frame we would start. Uranium price may or may not go up by then, but we will be in position. We announced we do have one contract with a US utility so we need to start producing to deliver into that contract.
CK: Well, based on the valuation of Western Uranium, the leadership team, the assets controlled, I am of the opinion that Western Uranium is extremely undervalued. I am a substantial shareholder of Western Uranium as a disclosure. Western Uranium is currently being valued as if it is an optionality play, meaning investors are currently just valuing it based on the amount of pounds in the ground and even at that point it is deeply undervalued. But when put in a context of a potential near term producer and a low cost producer there is tremendous upside available to investors that are willing to buy now. Of course, as George pointed out, a rise in the price of uranium does always help. But a company that has a new technology and can produce at a substantially lower cost than his peers is always going to be an attractive place to put money.
George, I want to ask you as we start to close up the interview here, for interested investors, of course, they can go ahead and go to your website. They can also look up the stock which is listed on the CSE and OTCQX. Is there any way for people to get in touch with you or other people on the management team to hear more about the company?
GG: Sure, absolutely! My phone number is listed on our website. I am happy to talk to investors or potential investors anytime. I have got an email address. There are several ways to contact me. Feel free or the investors should feel free to contact me. I am always happy to talk about the company and give what information I can to investors and potential investors.
CK: All right, George, thank you so much for coming on the program; truly a legend in the uranium business. Hopefully, as we have another boom coming up here investors positioned properly are going to make a fortune as they did back in 2002 to 2007 particularly with companies like Energy Fuels.
GG: Thank you, Collin.
Mr Glasier was previously President and CEO of Energy Fuels Inc (TSX:EFR). During his time at Energy Fuels, he was responsible for assembling a first-class management team, acquiring a portfolio of uranium projects, and leading the successful permitting process that culminated in the licensing of the Piñon Ridge uranium mill; planned for construction in western Montrose County, Colorado. The Piñon Ridge mill will be the first uranium mill to be licensed in the USA in more than 25 years.
More recently, Mr Glasier was President and CEO of American Strategic Minerals Corporation (ASMC), which in early 2012 had established a joint venture with Ablation Technologies LLC for the ablation process. After ASMC elected to focus its efforts away from uranium, he resigned as CEO and was assigned ASMC’s rights to ablation. As announced on the 6th July 2012, BLR has in turn acquired all of the rights held by Mr Glasier with respect to ablation. BLR has subsequently established its own joint venture with Ablation Technologies LLC to commercialise the ablation process for use in uranium on a world-wide basis
Palisade Global Investments Limited holds shares of certain companies discussed in this interview. We receive either monetary or securities compensation for our services. We stand to benefit from any volume this interview may generate. The information contained in such write-ups is not intended as individual investment advice and is not designed to meet your personal financial situation. Information contained in this report is obtained from sources we believe to be reliable, but its accuracy cannot be guaranteed. The opinions expressed in this interview are those of Palisade Global Investments and are subject to change without notice. The information in this interview may become outdated and there is no obligation to update any such information. Do your own due diligence.Share this on: