An eager reader notices that yet another Canadian energy company is angling to exploit South Dakota’s natural resources.
Vancouver-based Pegasus Resources has bought 147 lode mining claims over 3,037 acres in Fall River County for $1.5 million in cash. Pegasus bought the claim from Cowboy Exploration and Development, which gets its mail in Laramie, Wyoming, but claims its principal office is in Pinellas Park, Florida. Cowboy E&D was just organized on March 11, after another Laramie business entity with the same name and Laramie P.O. Box (2498) was administratively dissolved by the Wyoming Secretary of State in 2017 after incurring six tax delinquency notices since 2007.
Pegasus refers to its Fall River acquisition as the Chord Uranium Property, a reference to the Chord Uranium Company, which had seven mines among the 43 active uranium mines held by various operators in Fall River County in 1960, and perhaps to local miners Roy and Eugenia (Jeannie) Chord, small independent operators who fought claim jumpers and big companies crowding them out of the uranium market. Chord sold the property in 1975. Pegasus says Union Carbide exploration in the area in the late 1970s indicated the claims could yield 3.8 million pounds of uranium. Pegasus notes that the acres it wants to mine lie just 5.5 kilometers southwest of the Dewey-Burdock area that Encore Energy (which last fall acquired Azarga, which used to be Powertech) has been trying for years to get permission to mine for uranium. Like Encore/Azarga/Powertech, Pegasus would use in situ recovery to extract uranium by injecting lots of water into the sandstone.
This announcement comes just a couple months after Pegasus bought uranium stakes in Emery County, Utah, where the Minerals Corporation of America mined small amounts of uranium and vanadium in the 1950s. Pegasus is also looking for uranium in the Athabasca Basin of northern Saskatchewan. While uranium remains below its peak price from 2007 of $137 per pound, it has recovered recently from post-Fukushima doldrums to just about double the $30 per pound that, by one estimate, makes uranium mining profitable. That higher price is being driven by multiple factors:
One of the ironies of the global battle to fight climate change by reducing carbon emissions is that while energy generation from renewables such as solar, wind and geothermal have their place, nuclear energy has been demonstrated to be the safest and cleanest form of power generation – and produces no carbon footprint. Governments around the world have recognized this reality and currently more than 200 nuclear reactors are being planned or built.
The US has recognized uranium as being a critical resource vital to the Country’s economic and national security. As such, the federal government has allocated $1.5 billion towards building a domestic strategic uranium reserve over the next ten years.
Several decades of fear and negative public sentiment towards nuclear energy resulted in limited uranium demand and investment, resulting in less exploration for uranium and fewer new mines put into production. Today, rapidly rising demand for nuclear power is driving demand for the uranium necessary to power the reactors – and this has sparked a global exploration boom to discover, develop and mine new uranium deposits.
The uranium boom is coinciding with the rapid growth of the electric vehicle (EV) industry as many governments have mandated a transition away from fossil-fuel powered vehicles to EVs, in order to meet global carbon emission targets. The world will require reliable and cost-effective electricity to keep these vehicles running, and nuclear power is one of the safest and most reliable sources.
These factors appear to be creating the perfect storm for junior exploration investors that is forming the foundation for a long and sustainable bull market for metals and minerals of all kinds. Add to this the global economy recovering from the ravages of the Covid-19 pandemic, and demand and price pressure for all commodities could very well continue to rise for many years to come [Phil Gracin, “Pegasus Resources Acquires Claims with Significant Historical Resources Near to Encore Energy,” The Deep Dive, 2022.04.12].
Encore/Azarga/Powertech is still waiting for its South Dakota water permit; if Pegasus wants to go squirting for uranium north of Edgemont, it had better file its paperwork yesterday and brace for a long wait.