Uranium Deal Secures Key Projects in Athabasca Basin as Exploration Momentum Grows

1) James Guttman wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.

2)  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

For additional disclosures, please click here.

Cosa Resources Corp. (COSA:TSXV; COSAF:OTCQB; SSKU:FSE) has received conditional approval from the TSX Venture Exchange for its acquisition of a 70% interest in a portfolio of prospective uranium projects from Denison Mines Corp. The acquisition includes three highly promising assets: the Murphy Lake North, Darby, and Packrat projects, all located in Saskatchewan's Athabasca Basin, a globally renowned region for high-grade uranium deposits. This transaction underscores Cosa's strategic focus on advancing uranium exploration in one of the world's most resource-rich areas.

Cosa's shares resumed trading on the TSX Venture Exchange on December 2 after being temporarily halted following the initial announcement of the transaction. The deal includes the issuance of 14,195,506 Cosa shares to Denison, representing a 19.95% post-transaction stake, along with US$2.25 million in deferred shares to be issued over five years. The company anticipates closing the transaction in early 2025, subject to remaining conditions, including final TSX-V approval.

As per the press release, Cosa's management, known for its expertise and past discoveries in the Athabasca Basin, believes this acquisition will significantly enhance its portfolio. Notably, the Murphy Lake North project is situated within four kilometers of IsoEnergy's Hurricane Deposit, the highest-grade indicated uranium resource globally. The Darby and Packrat projects are strategically located near the Cigar Lake Mine and Rabbit Lake Mill, respectively, further bolstering their exploration potential.

Sector Section: Uranium Exploration and Nuclear Energy

The November 14 commentary from Ahead of the Herd detailed challenges faced by Kazatomprom, the world's largest uranium producer, which struggled with production shortfalls due to sulfuric acid shortages and delays in greenfield projects.

On December 2, Newsletter Writer Stewart Thomson highlighted Cosa Resources as a standout among junior miners.

The article noted the issue goes beyond the company and that the uranium market remains in a structural deficit, with reactor demand projected to outstrip mine supply by 170 million pounds. The analysis emphasized the urgency for investment in uranium exploration globally.

The uranium exploration sector has experienced significant developments driven by geopolitical tensions, growing energy demands, and an increased focus on nuclear power as a low-carbon energy source. On November 18, Stockhead reported a surge in uranium stock prices following Russia's decision to limit exports of enriched nuclear fuel to the United States. This action tightened global supply and highlighted uranium's critical role in energy markets.

According to Stockhead, "the rally in uranium stocks came as optimism around the sector grew," reflecting the heightened interest in uranium exploration and production to meet demand.

Further illustrating the sector's potential, Wired highlighted on December 7 that dormant uranium mines in Texas are being revived to address increasing domestic demand for nuclear energy. James Walker, a nuclear physicist quoted in the piece, stated, "The Department of Energy at the moment is trying to build back a lot of the infrastructure that atrophied." The report also mentioned that advancements in mining techniques, such as in-situ recovery, are enabling the economic viability of previously inaccessible uranium deposits.

'A Standout Among Junior Minors'

On December 2, Newsletter Writer Stewart Thomson highlighted Cosa Resources as a standout among junior miners. Thomson emphasized the company's strong technical positioning, stating, "A major breakout gap is apparent on the chart," and projected significant upside potential with price targets of US$0.50 and US$0.65.

He also commended the company's leadership, specifically its chairman, Steve Blower, for his experience as the former VP of exploration for Denison Mines. Thomson noted this as a key asset in navigating the company's growth and operational strategies.

In a December 5 article,  Jeff Clark of The Gold Advisor praised Cosa Resources Corp. for its strategic joint venture with Denison Mines, which included three high-profile exploration projects in the Athabasca Basin.

Clark noted that this agreement provided "access to premium exploration projects" and positioned Cosa Resources as a company with strong growth potential. Additionally, the partnership introduced Denison Mines as a strategic investor, which Clark described as a "marquee addition" that enhanced the company's credibility and future financing opportunities.

Cosa's Catalysts 

According to the company's investor presentation, the acquired projects complement its existing assets, offering extensive exploration opportunities. The Murphy Lake North project is particularly promising, with nearly 10 kilometers of untested conductive strike identified, making it a priority for exploration. Historical core reviews have already confirmed the presence of prospective lithologies linked to the Hurricane Deposit.

Denison Mines' involvement as a strategic partner and significant shareholder enhances Cosa's access to technical expertise and financial resources. This partnership also ensures alignment with Denison's ongoing advancements in uranium extraction technology, such as in-situ recovery methods. Furthermore, Denison's equity participation rights and board representation underscore the long-term commitment to the success of these joint ventures, according to the company.

Ownership and Share Structure

Updated ownership details with this transaction shall be released at a later date. 

Prior to the news, according to Refinitiv, management and insiders accounted for approximately 15.34% of Cosa Resources Corp.

According to Refinitiv, Executive Vice President and Director Wesley Short owns 4.08%, equating to 2.33 million shares. President, CEO, and Director Keith Bodnarchuk holds 3.57% or 2.03 million shares. Chairman Steve Blower possesses 3.41%, totaling 1.95 million shares. Vice President of Exploration Andy Carmichael owns 1.96%, amounting to 1.12 million shares.

Institutional investor CQS (UK) LLP holds 9.90%, with 5.64 million shares.

The rest is retail.

MarketWatch reports that Cosa Resources has a market capitalization of approximately CA$15.4 million, with 56 million shares outstanding.

The stock has traded between CA$0.19 and CA$0.66 over the past 52 weeks.