Value Hive Podcast

Rebecca Hunter: Life As A Uranium Explorer

Fri Feb 02 2024

uranium explorationmining industryinfrastructuredrillingsupply-demand imbalancenuclear powergeological workskilled labor

Description

This episode of the Macarops Value High podcast features Rebecca Hunter, VP of Exploration at Form Energy, who shares her experiences and insights in uranium exploration. The episode covers topics such as the impact of the Fukushima disaster on the uranium industry, the importance of infrastructure and planning in mining exploration, factors affecting drilling results and evaluating potential, the supply-demand imbalance in uranium, keys to successful exploration, and the challenges of attracting skilled labor. Rebecca also discusses her experiences in uranium exploration camps and her appreciation for nature. Overall, the episode provides a comprehensive overview of the uranium exploration industry.

Insights

Infrastructure plays a crucial role in mining exploration

Infrastructure is essential for accessing remote areas and reducing costs in mining exploration. Companies like Agnico Eagle have successfully overcome infrastructure challenges by building roads and using diesel generators for power.

Proper planning is essential for exploration success

Proper planning, including conducting geophysical surveys before drilling, is crucial for exploration success. Rushing into drilling without adequate preparation can lead to suboptimal results and wasted resources.

The supply-demand imbalance in uranium is driving interest in nuclear power

The supply-demand imbalance in the uranium market, driven by new reactors being built and existing reactors extending lifetimes, is driving interest in nuclear power. The demand for uranium is expected to increase significantly, especially with the consideration of small modular reactors (SMRs).

Exploration companies should prioritize thorough geological work

Exploration companies should prioritize thorough geological work to increase their chances of finding deposits. Good management with technical expertise and a track record of success is also valuable in assessing a company's potential.

The mining industry faces a shortage of skilled labor

The mining industry is facing a shortage of skilled labor due to limited promotion and image issues. Advocacy is needed to attract more people, including women, into the industry.

Experiences in uranium exploration camps

The speaker shares their experiences at Mindslight Camp and Exploration Camp, where they stay in small tents, use camp kitchens for meals, and enjoy being out in nature. They also mention using a syntholometer to measure radioactivity while walking the ground.

Chapters

Introduction
Rebecca Hunter's Experience in Uranium Exploration
Importance of Infrastructure and Planning in Mining Exploration
Factors Affecting Drilling Results and Evaluating Potential
Evaluating Mining Companies and Supply-Demand Imbalance in Uranium
Keys to Successful Exploration and Attracting Skilled Labor
Experiences in Uranium Exploration and Appreciation for Nature

Summary

Transcript

Introduction

00:01 - 07:50

The Macarops Value High podcast aims to make high risk-adjusted returns and offers differentiated research, theory, and education resources.
The podcast has a highly engaged community of professionals, retail investors, and traders who share a love for investing.
MIT Investment Management Company (Matico) invests with emerging managers and created emergingmanagers.org as a resource for stock pickers.
Metemco is the investment office of MIT and occasionally hires new members for their investment team.
Teagas is a product that provides expert interviews on public and private companies for hedge funds, mutual funds, family offices, allocators, and VCs.

Rebecca Hunter's Experience in Uranium Exploration

07:20 - 15:29

Rebecca Hunter, VP of Exploration at Form Energy, discusses uranium exploration and mining exploration in general.
She started in geology in Saskatchewan and fell in love with Earth Science and mineral deposits.
Rebecca worked at Cameco in their exploration department until post-Fukushima when things got tough.
She took on the FELON project in the Nineveh territory to find uranium deposits but faced challenges after Fukushima.
Rebecca did a PhD to further understand the area and has experience in junior exploration.
The speaker wanted to help the process of finding resources that were cut short and left unfinished.
They did a PhD and gained experience in various exploration roles before returning to forum, where they staked the old ground that Cameco had.
The Fukushima disaster had a significant impact on the uranium industry, causing capital to dry up and leading to layoffs and cuts.
The speaker spent around $50 million on exploration in Nunavut, with drilling being the most expensive part of the process.
Different methods like sampling, geophysics, and drilling are used to narrow down potential targets for exploration.
Infrastructure is crucial for accessing remote locations and making projects viable. Lack of infrastructure can be a challenge in areas like the Athabasca and Theelon districts.

Importance of Infrastructure and Planning in Mining Exploration

15:05 - 22:46

Infrastructure plays a crucial role in the mining process, as it provides access to remote areas and reduces costs.
Exploring areas with less infrastructure requires larger-scale projects to mitigate the higher costs.
Agnico Eagle successfully overcame infrastructure challenges by building roads and using diesel generators for power.
Mining companies are experiencing increased costs across various aspects such as equipment, labor, and environmental regulations.
The rising costs impact budgeting processes, requiring companies to allocate more money for exploration.
Despite the higher costs, the current uranium price surge makes many things more attainable in the industry.
Proper planning is essential for exploration success, including conducting geophysical surveys before drilling to identify optimal targets.
Geophysical surveys are particularly important for uranium exploration due to blind deposits that cannot be seen without specialized techniques.
Companies should prioritize spending time on technical work and surveys to maximize the effectiveness of drilling efforts.
Rushing into drilling without adequate preparation can lead to suboptimal results and wasted resources.

Factors Affecting Drilling Results and Evaluating Potential

22:19 - 29:54

Rushing into drilling without sufficient time for surveys and understanding of the project is not ideal.
Exploration companies should ideally spend a couple of years on geophysical work before drilling.
The decision to start drilling right away or wait depends on the amount of previous work done on the project and its potential.
Shareholders often demand quick results, but finding a deposit requires more than just geophysics.
Senior companies with cash flow can afford a more methodical approach to exploration.
Differentiating between good and poor drilling results can be challenging due to companies promoting their discoveries.
In uranium exploration, subtle indicators like alteration and associated structures can be significant clues.
Grades over 0.5% or 1% are considered good for unconformity type deposits, but thickness also matters.
Shallow mineralization improves economics as it can be extracted via open pit mining.
Depth and grade are important factors in evaluating the potential of a company's project.

Evaluating Mining Companies and Supply-Demand Imbalance in Uranium

29:31 - 37:15

Evaluating mining companies requires considering factors such as grade, depth, and location.
Mining lower-grade and more complex deposits is becoming common as the easy commodities have already been mined.
Open pit mines are easier to understand and involve scooping out the deposit, while underground mines require drilling a shaft and extracting the ore through drifts.
Sinking a shaft in an underground mine is expensive, with costs increasing with depth and additional considerations for ventilation.
The choice between underground and open pit mines depends on factors like price points and availability of uranium.
Companies may focus on reopening shuttered open pit mines or extracting deeper zones in underground mines based on economic viability.
In situ recovery operations, similar to those in Kazakhstan or the US, could be a game changer for unconformity deposits by injecting wells to extract uranium without extensive underground development.
The supply-demand imbalance in uranium is driving interest in nuclear power due to new reactors being built and existing ones extending lifetimes.
There is a supply-demand imbalance in the uranium market, driven by new reactors being built and existing reactors extending lifetimes.
The demand for uranium is expected to increase significantly, especially if small modular reactors (SMRs) are considered.
Bringing new uranium supply online can be economically feasible if the price is high enough, but it requires significant capital expense and a rigorous permitting process.
The stockpiling of uranium after Fukushima has ended, leading to a realization of how much uranium is actually needed for net-zero goals and reactor requirements.
The decision-making process for exploration companies involves considering whether to get bought out or become a producing company based on market conditions and discoveries made.
Valuing an exploration company can be challenging, but factors such as share price, project quality, and methodical approach to geology can indicate potential value.
The sentiment that deposits are getting deeper and harder to find may not always be true; sometimes it's due to insufficient good work being done in certain districts.

Keys to Successful Exploration and Attracting Skilled Labor

36:45 - 45:07

Deposits are not necessarily getting deeper or harder to find, but rather the lack of good geological work has hindered exploration success.
Companies that push boundaries and conduct thorough geological work tend to be more successful in finding deposits.
Evaluating relative valuation between exploration companies can be done by considering factors such as land package, location within the right corridors, and following major companies with prime real estate.
Good management with technical expertise and a track record of success is valuable in assessing a company's potential.
Exploring underexplored districts and recognizing opportunities where majors may have overlooked can lead to significant discoveries.
The mining industry faces a shortage of skilled labor due to limited promotion and image issues. Advocacy is needed to attract more people, including women, into the industry.
Despite challenges, passionate individuals can be trained and mentored to become successful explorers who contribute to the next generation of discoveries.

Experiences in Uranium Exploration and Appreciation for Nature

44:42 - 52:12

The speaker describes their experiences at Mindslight Camp and Exploration Camp.
At the camps, they stay in small tents and share with others.
Depending on the time of year, there may still be snow on the ground.
They have camp kitchens for meals.
The speaker mentions helicopter rides to the work site.
Initially, they were sometimes alone in the field with radio contact to a crew nearby.
They use a syntholometer (similar to a Geiger counter) to measure radioactivity while walking the ground.
The speaker enjoys being out in nature and finds it beautiful.
Nowadays, their work involves more computer-based tasks like invoicing and program planning.
The interviewer appreciates hearing from someone doing hands-on work rather than just investors' perspectives.
The speaker's Twitter handle is @UraniumHuntress.
If given the chance, they would have dinner with Mark Twain or early pioneers in geology.