Tisdale Clean Energy Corp. (TCEC:CSE; TCEFF:OTCQB; T1KC:SE) garnered the attention of HoldCo Markets, which initiated coverage on it with a CA$0.13 per share price objective, reported HoldCo Markets in an Aug. 22 research note.
"Our positive thesis is underpinned by the earn-in potential for as much as a 75% interest in the South Falcon East property," HoldCo wrote.
Tisdale is working toward an earn-in of this uranium-thorium project in the periphery of Saskatchewan's Athabasca Basin, pursuant to its 2022 agreement with the project owner Skyharbour Resources Ltd. (SYH:TSX.V; SYHBF:OTCQX; SC1P:FSE) Tisdale may earn 51% by 2026 for about CA$11 million (CA$11M), of which it is to spend CA$5.5M on exploration at South Falcon East, and 75% by 2028.
117% Uplift Possible
Tisdale is currently trading at about CA$0.06 per share, noted HoldCo, whose price objective on the uranium explorer indicates a potential return for investors of 117%. Higher uranium prices would benefit the stock further.
"From our conservative base US$4.50 per pound in situ valuation for the current Fraser Lakes B deposit, every about US$0.50 per pound increase to the valuation metric translates to a net asset value uplift of about 15%," the investment firm wrote.
Resource Sets Company Apart
HoldCo presented the factors making Tisdale an attractive investment opportunity.
One is that South Falcon East has an existing resource, thereby differentiating Tisdale from its peers, HoldCo highlighted. The resource, encompassing only the Fraser Lakes B deposit at the property, has an NI 43-101-compliant Inferred resource of 6,900,000 pounds (6.9 Mlb) of 0.03% U3O8 and 5.34 Mlb of 0.023% thorium dioxide (ThO2).
The resource does not include results of drilling by both Skyharbour and Tisdale, noted HoldCo.
Characteristics of Deposit
The grade of the Inferred resource, 0.03% U3O8, HoldCo wrote, is lower than the roughly 2% U3O8 average grade of any deposit in the Athabasca Basin but "should not be discounted." Similar or lower grades are found at various uranium projects in the U.S., restarted in the past year using in situ recovery, and at some of the world's largest open-pit uranium mines, like Rossing and recently restarted Langer-Heinrich, both in Namibia. The global average uranium grade is lower at about 0.018% U3O8.
"Though the South Falcon East deposit happens to be on the periphery of the Athabasca Basin, the low-grade nature of the deposit doesn't negate the future potential to mine it economically," HoldCo Markets wrote.
South Falcon East's close proximity to infrastructure may also improve the project's economics, added the investment firm. In the area are Skyharbour's Moore Lake project, Cameco Corp.'s (CCO:TSX; CCJ:NYSE) McArthur River mine and Key Lake mill, and Orano SA and Rio Tinto Plc (RIO:NYSE; RIO:ASX; RIO:LSE; RTPPF:OTCPK) projects.
Also notable about the South Falcon East project, HoldCo pointed out, is its relatively shallow depth and its Rossing-style uranium mineralization, associated with intrusive rocks such as granitic pegmatites and alaskite and atypical for the Athabasca. Projects with this mineralization include Rossing, Langer Heinrich and Norasa.
"The trade-off between lower grade and shallower depth can also lead to a profitable mining operation," wrote HoldCo.
Potential to Expand Resource
South Falcon East boasts exploration upside, HoldCo purported. The resource remains open in almost every direction, and Tisdale's 2024 phase one drilling showed potential to expand it and increase the average grade.
"At the current microcap valuation [CA$2.4M], the risk remains on the upside for future drilling success along with earn-in completion," the investment firm wrote.
What to Watch For
HoldCo listed the potential and likely catalysts for Tisdale. One is possible amendments to its earn-in agreement with Skyharbour, regarding timing and/or payment amounts.
Two others, contingent on financing noted the investment firm, are Tisdale starting phase two drilling at South Falcon East and making required milestone earn-in payments to Skyharbour.
Another possible stock mover is drill success at any of the nearby projects, including Skyharbour's optioned North Shore Uranium and Russell Lake projects.
Leadership, Ownership, Share Structure
HoldCo presented brief bios of the key members of Tisdale's management. Alex Klenman, chief executive officer (CEO) and director, has worked 30 years in business development in the private and public sectors and has experience in the junior mining and uranium spaces specifically, having been the CEO and director of Azincourt Energy Corp. and a consultant to Forum Uranium.
Also of note, member of Tisdale's advisory board include Jordan Trimble, Skyharbour's president and CEO, and Trevor Perkins, a skilled and experienced geologist, previously with Rio Tinto and Cameco.
Management and insiders own about 15% of Tisdale. Venture capital firm Planet Ventures Inc. holds about 9.3%.
Tisdale has 37.19 million shares outstanding.
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Important Disclosures:
- Tisdale Clean Energy Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000. In addition, Tisdale Clean Energy Corp. has a consulting relationship with Street Smart an affiliate of Streetwise Reports. Street Smart Clients pay a monthly consulting fee between US$8,000 and US$20,000.
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Tisdale Clean Energy Corp.
- Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor/employee.
- 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.
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Disclosures for HoldCo Markets, Tisdale Clean Energy Corp., Aug. 22, 2024
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