An aerial photo shows Fission Uranium’s PLS uranium mine and mill project in Saskatchewan.SUPPLIED
Even as the world’s energy demand is growing, there is increasing awareness about the urgent need to decarbonize energy systems. That’s why nuclear power’s potential as clean energy is coming the forefront to drive “a renaissance for nuclear energy,” says Ross McElroy, president and CEO of Fission Uranium Corp., a uranium mine development company with projects in the Athabasca Basin uranium district.
“With climate change at the top of everybody’s list of concerns, the global drive to reduce carbon emissions is contributing to nuclear power taking its rightful place in the energy mix,” he explains. “It’s a trajectory that is unparalleled in modern times.”
Canada, and Saskatchewan in particular, endowed with the world’s “highest-grade uranium deposits in what is considered one of the safest and most stable mining jurisdictions,” can play a key role in helping to meet the rising uranium demand required for maintaining and expanding nuclear power generation, and Mr. McElroy proposes that the uranium industry represents considerable potential for investors.
Among his top advice for investors with an interest in uranium projects are: one, evaluating the market; two, looking at the strength represented in different jurisdictions; and three, choosing a company with the right assets and expertise.
#1 Prices, trends and trajectory
“The first level of information investors have to consider is the current price of the commodity as well as the outlook,” says Mr. McElroy. “During the 2023 calendar year, uranium was up 90 per cent compared to 2022, and supply continues to be very tight. It’s a situation that is expected to continue for some years, which makes this an exciting investment platform.”
As a result of the significant price increase, uranium has become one of the best performing commodities, and Mr. McElroy predicts this upward trajectory will continue. In large part, this is the result of heightened international attention on nuclear power as a means to reduce carbon emissions while maintaining energy security.
According to the Nuclear Energy Institute, one uranium fuel pellet creates as much energy as one tonne of coal, 149 gallons of oil or 17,000 cubic feet of natural gas. As jurisdictions step up efforts to shift away from fossil fuels, there is increasing recognition of the benefits of nuclear as baseload energy, he says. “With its ability to deliver reliable electricity 24/7, 365 days a year – even at peak times, nuclear power has some of the same capabilities as fossil fuels, but at the same time, it is clean energy.”
Nuclear power currently provides about 10 per cent of the global electricity, and Mr. McElroy expects this number to grow, especially with advances in technologies that promise to make using nuclear power more adaptable and more cost effective.
With 57 new generators under construction in 2023, many countries have plans to expand the global nuclear reactor fleet of 440. What’s more, technology innovation in small modular reactors (SMRs) promises to be a “game-changer,” he says. “Standard nuclear power generators are meant for areas with a large population and significant power demand, yet smaller and remote communities, of which we have many in Canada, also require power. Many of these places currently rely on diesel or sometimes LNG, but with the development of SMRs, nuclear power can be more widely accessible.”
Implementing SMR technology in areas currently dependent on fossil fuels not only represents significant emissions-reduction potential – it can also boost the percentage of nuclear in the global power mix, Mr. McElroy suggests. “With the introduction of SMRs into the system, it’s not hard to imagine having one-third of global electricity powered by nuclear.”
A growing nuclear reactor fleet plus commercial application of SMRs, he points out, will lead to a significant increase in uranium demand.
Ross McElroy" There are very few jurisdictions that are as safe as Canada, which has fantastic high-grade reserves that allow the production of low-cost uranium.
President and CEO, Fission Uranium Corp.
#2 Geopolitics, reputation and process
While uranium deposits can be found worldwide, Canada has some key advantages, says Mr. McElroy. “There are very few jurisdictions that are as safe as Canada, which has fantastic high-grade reserves that allow the production of low-cost uranium.”
Placed among the top three uranium producers worldwide, Canada ranks after Kazakhstan and before Australia – and has a competitive edge on parameters like political stability, environmental impact and production capabilities. “We also have considerable expertise at all levels of the cycle, from exploration and mining to milling and fuel enrichment,” Mr. McElroy says. “And Canada’s mines are very big, so we can produce a lot of uranium per year.”
While Canada’s reputation for a stringent regulatory environment may inspire confidence in investors and trade partners, this also means “it takes time to build a resource from discovery to production,” he notes. “Internationally, the process may take 10 years, but in Canada, permitting can add five to eight years, so stepping up production to meet rising demand is not going to happen overnight.”
What makes this situation even more challenging is that the market only recently emerged from a 10-year slump, where exploration and development were hampered by low uranium prices, Mr. McElroy says. “Advancing many of these projects – with a few notable exceptions including Fission Uranium – was simply not economically viable. Now, with demand rising, the supply side is at a point where it needs to catch up.”
#3 Area, assets and expertise
Northern Saskatchewan, home to the largest high-grade uranium deposits in the world, currently supplies almost one-quarter of the global uranium supply for electricity generation, and Mr. McElroy says there is substantial local support for the minerals industry both from the provincial government and communities.
“In our case, we have been developing strong relationships with Indigenous groups and communities,” he says. “At the local level, people understand the importance of mining to the overall economy, for example, for creating jobs and building new services. There is a lot of appetite to see these projects move forward.”
In addition to community support, Fission Uranium has “been able to attract the strongest team of experts, from geologists, environmental and permitting experts through to some of the industry’s leading mining and process engineers, who understand the uranium sector at all levels,” Mr. McElroy says. “Since the discovery 11 years ago of our Triple R deposit – which stands out for the most significant uranium deposit at a shallow depth – we’ve moved forward with economic and engineering studies, and are now in the advanced permitting phase with the Province of Saskatchewan and the Canadian government.”
Being in the position to “bring uranium out of the ground at the beginning of 2029 – and then move into the fuel cycle – makes us one of only three developers of merit with projects that will be operational within the next several years in the Athabasca Basin,” he adds.
With such a limited number of projects in advanced stages along the development pipeline, Mr. McElroy believes “Fission Uranium is well positioned among the highest quality uranium companies operating in Canada, and in northern Saskatchewan in particular.”
Produced by Randall Anthony Communications with the Prospectors & Developers Association of Canada. The Globe’s Editorial Department was not involved.