➤ Rising uranium prices and growing interest in nuclear energy have spurred U.K.-headquartered Thor Mining PLC to advance drilling at a project in Colorado.

➤ Russia's invasion of Ukraine has sent nuclear utilities and governments searching for new uranium sources outside Russia's orbit, leading some companies to contemplate reopening mothballed mines or breaking ground on new projects in North America.

➤ Uranium prices need to be approximately $45 per pound to $55/lb to justify developing a new project, according to Thor Mining Managing Director Nicole Galloway Warland. Prices have stayed above $45/lb since the war in Ukraine started at the end of February.

Thor Mining is focused on the exploration and development of commodities needed for the low-carbon energy transition, including uranium, lithium, copper, gold and other critical minerals. The company aims to capitalize on rising interest in U.S.-sourced uranium and is advancing development at its wholly owned Wedding Bell uranium-vanadium project in Colorado. Uranium mining companies reversed a 10-year decline in exploration budgets in 2021, thanks in part to higher uranium prices and a rosier demand outlook. In 2021, uranium prices ended a yearslong slide that dated back to the days following the 2011 Fukushima Daiichi reactor disaster in Japan, which chilled global interest in nuclear power.

Russia was the sixth-largest producer of uranium worldwide in 2021, according to S&P Global Commodity Insights data. The country's invasion of Ukraine has pushed some nuclear utilities to establish new sources for uranium.

Commodity Insights spoke with Thor Mining Managing Director Nicole Galloway Warland to understand how increasing uranium prices and a flurry of investor buying over the last year are influencing uranium developers' next moves. The following conversation has been lightly edited for clarity and space.

Thor Mining Managing Director Nicole Galloway Warland. Source: Thor Mining PLC

S&P Global Commodity Insights: Uranium prices have more than doubled over the past two years, from as low as $24/lb in March 2020 to $64/lb in April. How has the price rally affected Thor Mining's uranium exploration and development plans?

Nicole Galloway Warland: All commodities are up at the moment, whether that is for geopolitical reasons, green energy reasons, or supply and demand reasons. Uranium is no different. It has taken a while after Fukushima to really build back confidence in uranium again. But certainly, the war in Ukraine and other geopolitical situations are putting a lot of pressure on supply and demand of uranium. That's one side of things.

There is also a really strong push for green energy, or carbon-free, baseload power. I think people are now understanding with climate change that they need it. Renewables are great, but you do need baseload power. We need something that is clean and nuclear reactors tick a lot of those boxes. Looking at nuclear power capacity for the U.S., the country needs a domestic supply of uranium. That interest is obviously driving the price in a positive direction.

Why focus on exploring and developing uranium in the U.S.?

We have a very diverse portfolio of projects in Australia and the U.S. and are looking at commodities for the future: uranium, lithium, copper, gold. That led to the Wedding Bell uranium-vanadium project in Colorado. We have done some due diligence, and we now have designed a drilling program and are working through the county, Colorado and the Bureau of Land Management for permitting. We are hoping to be on the ground in the summer to undertake that drilling program. You don't always get the uranium and the vanadium forming together. These are quite high-grade deposits relative to other uranium projects or targets that we're exploring.

Has the Biden administration or any recent U.S. policy changes been particularly positive for uranium developers?

Certainly with the Biden government, there's been a strong push to build a domestic uranium supply for U.S. nuclear reactors. The domestic supply of uranium is very small. The country is still getting it from Russia, Kazakhstan, Canada and other places. I think the U.S. government is looking at the geopolitical situation and saying, "Look, we need our own domestic supply of uranium." We are pleased to be in a position to have three, drill-ready uranium-vanadium assets in the high-grade, historic producing Uravan mineral belt in the U.S.

In addition to the potential Russian sanctions on uranium pushed by U.S. senators, Thor is very encouraged by several announcements made by the Biden Administration and, in particular, U.S. Senate committees. There is a strong commitment to reestablish U.S. global leadership in nuclear energy and, in particular, secure a domestic supply chain. There was the recent bipartisan consideration of the Nuclear Infrastructure Act of 2020 by the U.S. Senate Committee on Environment and Public Works.

What price does uranium have to reach to justify exploring and developing a uranium project?

I think a rule of thumb would be about the $45 per pound to $50/lb range. Any lower and it is simply not economic. That's a ballpark number. Even throughout the exploration phase, you still look at prices.

The uranium market garnered a lot of investor attention starting last summer when asset manager Sprott Asset Management LP established a physical uranium trust and began acquiring and holding millions of pounds of uranium. Are you concerned that uranium prices are being inflated due to this activity and are not supported by market fundamentals?

That is a real risk. However, I believe the market fundamentals and demand in the mid-to-long term are very favorable. Geopolitical tension, a strong green energy push, constrained supplies and underinvestment will continue to drive prices.

In the U.S., there is a long history of uranium companies leaving behind legacy environmental issues, including land and water contamination and radioactive waste. As a company, how do you ensure projects gain community support and mitigate environmental risks?

I think it's one step at a time and about building people's trust. Looking at our case history, we've had other projects in the U.S., which we've rehabilitated with 100% of our bonds back based on the land reclamation work. That's the same in Australia. I think from a company standpoint, your reputation is very valuable. You have to have a good reputation when it comes to your social license.

When you're interacting with the community, you're making sure that key stakeholders are aware of what you're doing and how you're going to tackle reclamation. For me, reclamation happens when all parties are happy with the reclamation. It's making sure all parties are happy. They may not like the concept of exploration or mining. But if we can walk them through what we're trying to achieve — the benefits and how we can mitigate any environmental risks — and work with the experts, we can make sure we have the best practices in place.

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