Argentina is a nuclear economy, energy dependent on the country’s well-developed nuclear industry – already the largest in South America. The problem? Argentina’s nuclear industry has no nearby sources of yellowcake to fuel its reactors. The result is that Argentina is presently over-paying for its imported reactor fuel (in excess of $100/lb), at a time when the spot price for uranium is languishing at roughly $25/lb. This is less than 1/5th of the 2007 peak, where the price of U3O8 soared to close to $140/lb.
Enter the Grosso Group. Formed in 1993; the Grosso Group assembled a management team whose objective was to look for mining opportunities in one of the planet’s least-explored jurisdictions: Argentina. Previously, political and regulatory restrictions locked-out most foreign mining companies from that nation’s mineral-rich territory.
The management team is led by Nikolaos Cacos, president and CEO. Mr. Cacos has two decades of management expertise in mineral exploration, and has served as the officer/director of several publicly traded companies. He is supported by Darren Urquhart, who brings with him more than 10 years of business, accounting, and taxation expertise to the Company’s operations.
It is only in the last 20 – 25 years that Argentina’s regulatory straitjacket has gradually been removed, and the Grosso Group has been poised to take advantage of this new mining potential. With Blue Sky Uranium (TSX: V. BSK,OTCQB: BKUCF, Forum), the Company assembled a large land package of prospective uranium properties in two of Argentina’s provinces: Rio Negro and Chubut.
Having already brought three projects to production with other Grosso Group mining companies, this management team boasts a high profile in Argentina’s mining sector. Its high-level contacts within the Argentine government include a six-hour meeting with Argentina’s president.
With several, large trends to explore; Blue Sky’s development of its collection of properties was previously hampered by both the weak uranium market, and the overall depressed state of the mining sector in recent years. But with a rebound in the mining sector having taken place this year, the Company is now looking to recapture its momentum.
The uranium market itself remains depressed, due to a previous glut in supply. However, much of this incremental supply came via the decommissioning of nuclear weapons, and the cannibalization of the enriched uranium which they contained. With the global nuclear industry continuing to grow, and with supplies of weapons-grade uranium finite and dwindling, the Company is eagerly anticipating a rebound in the uranium sector.
BSK completed a successful financing in July through a private placement. Blue Sky Uranium currently sits with roughly $2.5 million in its coffers, waiting to be deployed in its near-term exploration initiatives. But this wasn’t the only major move made over the summer. The Company was very pleased to announce it had added a technical advisor to its management team: Guillermo Pensado.
Pensado holds a bachelor degree in geology, and a master’s degree in mineral exploration. Having worked for several junior and senior mining companies, he is not only an experienced geologist, but has intimate familiarity with Argentina’s mineral trends. With added depth in its management team, the Company has come up with a new game plan to capitalize on the robust opportunities for uranium mining in Argentina.
The starting point in this new game plan was compiling and integrating all of the previous exploration data which the Company had amassed in its previous ten years of uranium exploration. As Blue Sky assimilates this information, and completes its geological modeling, it is preparing for a new round of exploration work, centering on three of its properties in Rio Negro province: Anit, Santa Barbara, and Ivana.
The Anit property has been the center of the majority of the Company’s previous exploration initiatives. However, Blue Sky’s most-recent exploration took place at Ivana. In hand-pit excavation work, BSK uncovered some exciting concentrations in its sampling, highlighted by an interval of 1.81% U3O8 over 0.75 meters, including 6.67% U3O8 over 0.15 m.
Blue Sky views the mineralization style and geological setting of the Ivana trend as being similar to the Langer Heinrich mine in Namibia – a measured-andindicated resource of 150 million lbs. However, with all three properties as a part of the same, overall trend, BSK has made the exploration of these three properties a concurrent objective.
Over the near term, the Company is planning some further sampling work. However, it is also eager to bring in a drill rig onto at least one of the properties, obtaining some deeper drill samples to complement its surface work. Once this additional exploration has been commenced and completed, BSK will evaluate its next steps based upon those results. Over the long term, Blue Sky is hoping to translate the uranium potential in these properties into a large-scale, surficial mining operation.
Parallel to this, Blue Sky intends to continue with its metallurgical testing, seeking the optimal processing formula to maximize the efficiency of any future mining operations. Previous metallurgical work already conducted at Anit was encouraging. The testing demonstrated that most of Anit’s mineralized material can be upgraded significantly. This can be accomplished through a technique involving low-cost wet screening. The Company is confident that it can continue to build upon those results through additional metallurgical work.
Very interested spectators in the development of these properties are both the government of Argentina and its nuclear power sector. Argentina’s Energy and Mines Minister has already publicly stated the government’s support for the development of uranium deposits within that nation:
At a recent meeting with Senator Luenzo from Chubut Province. Energy and Mines Minister, Mr. Jose Aranguren, emphasized the new Federal Government’s support for the development of the uranium mining industry in Argentina.
The enthusiasm in Argentina’s government for the growth of uranium mining in that nation can only grow. Argentina has committed to adding two, new nuclear reactors – its fourth and fifth. It recently reaffirmed this commitment through a memorandum of understanding signed with China, as it is Chinese financial institutions which are stepping up to fund these projects.
China and Argentina have signed a memorandum of understanding (MOU) reaffirming their plans to construct two new nuclear power reactors in the Latin American country with financing from Chinese banks. Construction of Argentina’s fourth reactor is to start early next year.
At least one of these two, new reactors will be a “CANDU” reactor, named after the Canadian technology upon which it is based. Still viewed as one of the world’s most-efficient reactors for the production of nuclear energy, once completed it will become the nation’s second operational CANDU reactor, very possibly fueled by uranium provided by Canadian-based, Blue Sky Uranium Corp.
This growing market for uranium in Argentina has only intensified the resolve of the Grosso Group, and Blue Sky Uranium to become part of the solution in meeting that nation’s growing demand for uranium. With Argentina already over-paying for its reactor fuel, and two, new reactors on the way, the possibility of government funding for uranium projects, in the form of grants, tax-breaks, or other incentives cannot be ruled out.
With plenty of “blue sky” potential for uranium mining in Argentina, the Grosso Group appears to be ready to begin moving another of its Argentine mineral exploration projects toward production.
FULL DISCLOSURE: Blue Sky Uranium Corp. is a paid client of Stockhouse Publishing.