All posts by Peter Murray

Western Uranium blends big resource base, new technology in low-cost model

This story originally was published at www.proactiveinvestors.com on February 23, 2016 and featured in The CSE Quarterly.

Two things make Western Uranium (CSE:WUC) stand out from the junior mining pack: size and technology.

The first is straightforward enough. Western Uranium is the second largest holder of uranium resources in the United States, according to chief executive George Glasier.

The largest holder is Energy Fuels (NYSE MKT:UUUU), a company to which Western Uranium has close connections.

“We acquired our base assets from Energy Fuels in August 2014,” says Glasier, so there’s one connection. There’s also the small matter of Glasier having founded Energy Fuels himself.

So if there’s a man who knows his US uranium, it’s Glasier. And the company he’s now proceeding to build is a clear reflection of that.

A lot has been achieved in a short time.

At the time of the acquisition from Energy Fuels, Western Uranium was private. But shortly after that, in December 2014, it listed publicly on the Canadian Securities Exchange.

And following on from there Western Uranium acquired Australian company Black Range Minerals in a 1-for-750 all-share deal.

The entity thus created now controls a total resource base of upwards of 100 million pounds of uranium and 35 million pounds of vanadium across two of the key US uranium mining states, Utah and Colorado.

It was the acquisition of the seven permitted uranium mines that came with Black Range that catapulted Western Uranium into the number two slot behind Energy Fuels.

But there was more to that deal than just building scale.

Because it was with Black Range that Western Uranium acquired the second factor that gives it the edge over its junior peers: technology.

New technology in mining can be a mixed blessing, as anyone who’s followed the trials and tribulations of investing in nickel laterite processing can testify.

In uranium, certain types of deposit are amenable to leaching in-situ, which cuts down considerably on waste and completely does away with the need for tailings facilities.

Black Range’s technology doesn’t quite do that, but the effects and benefits are comparable.

It’s called “ablation”, a term borrowed from the medical profession, and it was originally developed by metallurgists looking to apply it to refractory gold deposits.

That didn’t work, but the same metallurgists then applied the technology to sandstone-hosted uranium deposits and the results were a whole lot better.

“Ablation causes a collision between sand grain particles,” says Glasier. “It removes the uranium coating and leaves a clear particle. That means it can leave up to 80% of the rock at the mine site.”

Perhaps even more significant in this environmentally conscious age, it’s a completely physical process and doesn’t involve any chemicals. Thus, the use of sulphuric acid in the milling process at a uranium mill can be significantly reduced. “It should substantially reduce the cost of producing uranium from our mines,” says Glasier.

So, with the two arms of the company – the resource base and the technology – in place, the next trick will be to find the finances to initiate production.

To that end, Glasier is about to embark on an extended roadshow that will encompass the US, Canada and Europe.

The thinking is that it will take approximately US$3million to get mining operations at the Sunday complex in Colorado into production while building the required additional ablation production units (‘ABT Units’), addressing the additional permitting costs of the State of Colorado for use of the ABT Units in the mining process and to retire the remaining debt.

That money will probably be raised through equity.

At the same time though, the company will also be working on putting together a US$35 million debt package to allow for the construction of a mill at a site already permitted at Pinon Ridge in south-western Colorado. The permitted mill site is currently owned by Pinon Ridge Mining Inc., an affiliate of the Company with common ownership interests of the principles of Western.

Ultimately, says Glasier, the plan is to produce upwards of 3 million pounds of uranium per year, and at very low cost.

Why so low? The first answer to that is the ablation technology, which is patented and tested. The second is that Western Uranium’s tenements also allow for a substantial vanadium credit to be applied in any economic model that gets built.

All told, Glasier reckons that Western Uranium will go into the lowest 10% of the cost quartile, which is welcome given that the uranium price has been relatively depressed of late.

Indeed, that weaker uranium price is the reason why the seven mines that Western Uranium acquired from Energy Fuels ceased production back in 2009. Other than the naked economics, they are ready to go.

But will the uranium price improve?

Longer-term, there’s plenty to be optimistic about. China is building nuclear reactors at a rate of knots. And Russia too is set to add significant new nuclear capacity, although the country is also one of the main producers of uranium. It’s estimated that by 2025 the number of nuclear power reactors in the world will have risen from the current 439 to a more substantial 497.

Western Uranium itself already has one secured customer.

An off-take agreement is in the bag with one US utility and doubtless there’ll be more to come. What the pricing will be in further deals is an open question, but it was interesting to see commentary from Cameco (TSE:CCO) recently in which the uranium giant argued that a position of oversupply is likely to linger for most of this year, but that an uptick may then be likely.

If so, the timing would suit Western Uranium nicely. “By the end of the year,” says Glasier, “we’re going to get production at the Sunday mine complex.”

Work on the mill will probably be well underway too, and there will be the additional kicker of marketing the ablation technology to companies overseas. The application to sandstone-hosted uranium deposits would suit some of the more well-known African uranium deposits in particular, and could well have a significantly beneficial impact on the economics of these projects.

More immediately though, the next crucial steps will involve the financing, a listing on a US exchange, and then deployment of those funds to generate early production.

Because this is not a market in which a junior miner can afford to take its time. But George Glasier knows that.

“The company’s moving fast in a tough market,” he says. “We are a low-cost and near-term producer.”

Learn more about Western Uranium Corporation at http://western-uranium.com/ and on the CSE website at http://thecse.com/en/listings/mining/western-uranium-corporation

Earth Alive’s unique microbial technologies gaining traction in mining, agriculture industries

This story was originally published at www.proactiveinvestors.com on February 29, 2016 and featured in The CSE Quarterly.

Listening to David Gilmour speak about the development of his company, Earth Alive Clean Technologies (CSE:EAC), is nothing if not inspiring.  His is an approach in which shortcuts are neither sought nor tolerated – do things right, or don’t do them at all.

By the sounds of it, that commitment to doing things the proper way is about to start paying off.  And not just on a single flagship product front but two, both with potential, as Gilmour puts it, “to grow into $100 million businesses.”

Earth Alive uses a fascinating set of technologies that rely on specifically selected microbial strains to create products for two very different industries: agriculture and mining.  Among the important outcomes is better soil health and consistency, both for agricultural operations that need stronger soils to cultivate healthier crops, and for mining operations where dust contamination from dry and loose soils is a constant problem affecting production and profitability, health and safety, and the environment.

These are not new challenges the company is addressing.  On the agriculture side, environmentally sustainable fertilization and irrigation are necessities of which we are all aware. Organic agricultural production and consumption is growing rapidly, and the company’s unique biofertilizer technology is ready to help growers meet demand for their products.

On the mining side, dust suppression is typically controlled with chemical treatments and huge amounts of water – sometimes millions of litres per day at a single mine site.  Needless to say, such solutions are costly not only in financial terms but also in their impact on the environment. The company’s proprietary EA1 dust control technology is positioned to help mining companies worldwide better their dust control practices.

Earth Alive in its current form began five years ago when Gilmour, who is both the company’s founder and CEO, took over a research and development company that was following a mandate to develop low-cost, high-performance fertilizers that were also environmentally sustainable.

One of the first things he realized was that while the company had great products, as well as the patents to back them up, agriculture is a market where people are set in their ways and products are heavily regulated.  The company would need to seek government certification before going much further.  Time to pivot…if only temporarily.

“We soon identified an opportunity to develop a high-performance, organic dust control product for a client involved in a huge mining project in Latin America where the use of chemicals and water was being constrained in a big way,” explains Gilmour.  “That put us on the map.”

But while replacing magnesium chloride and petroleum derivatives or obviating the use of extraordinary amounts of water is a noble goal, Gilmour and his team are realists.  “There are three characteristics we kept in mind at all times, “says Gilmour.  “One, it has to work well or better than the chemicals we replace, two, it has to be economically viable to use for the client, and three, it has to be environmentally sustainable.  Green technologies are great, but if they don’t work just as well as the chemicals they are designed to replace and cost more to use, nobody will adopt them.  Those three characteristics form the basis of our product development.”

Marketing was difficult when Earth Alive first started reaching out to potential users.  “We got to the market one company at a time, which for a small company like ours is very laborious.  When we announced the Brenntag agreement just before Christmas, it was the launch pad for broader distribution.  Now we are talking to every major mining company in the world, and a lot of that reflects Brenntag and their network of relationships in the mining sector.”

The agreement Gilmour refers to is with Brenntag Latin America, a subsidiary of Brenntag AG, the world’s leading distributor of chemical products.  Put simply, Brenntag knows everyone and sells them lots of products.  It is one of the most powerful allies Earth Alive could have aligned itself with.

As EA1 dust suppressant took off, the company was busy in the background completing its main agricultural product, Soil Activator, which uses microbial strains that each have a particular influence on soil and the growth cycle of plants.

One of the key strengths of Soil Activator is that it is not crop-specific.  “Soil Activator is efficient on everything from wheat to arugula, from tomatoes to bananas,” says Gilmour.   “It works well on its own for organic agriculture, but can also be utilized in tandem with traditional chemical fertilizers to better their performance and enhance absorption by plants.”

Underlying the impressive efficacy of Soil Activator is a return-to-the-basics approach to fertilization.

“The product utilizes different micro-organisms and a proprietary synergistic active,” explains Michael Warren, Vice President of Global Operations, Agriculture Solutions.  “We identified and use unique strains that are able to fixate nitrogen, solubilize phosphorus and chelate iron, among other benefits. These are actions that very few biofertilizers can achieve.

“There is often a whole host of nutrients already present in soil that plants just don’t have the ability to absorb.  Soil Activator will render these nutrients and make them available to plants.”

As with EA1 dust suppressant, Earth Alive has found a ready distribution partner for its biofertilizer in Brenntag, announcing a separate agreement for the exclusive distribution of Soil Activator with its Latin American subsidiary in February.

With the Brenntag sales and distribution network in 16 Latin American countries set to augment existing business in a big way, Gilmour is looking for Earth Alive to turn profitable later this year.  “We built the company in a way that our overhead is low, and now the whole production, distribution and sales chain is aligned with our partners.  All those years of preparing the business model and getting it to execution — the table is set,” says Gilmour.

“We have passed the developmental stage and are now onto full commercialization,” he continues.  “I really have to thank our shareholders for their support and patience.  They know that we are always progressing and always working to deliver on the business plan we put forth.  We could not have skipped the steps we took the past three years and still brought our technologies to market successfully.  But the result is that our technologies are now real players out there on the international market.”

Learn more about Earth Alive at http://earthalivect.com/ and on the CSE website at http://thecse.com/en/listings/technology/earth-alive-clean-technologies-inc

International Wastewater Systems modernizes energy recycling with fresh take on familiar technology

This story was originally published at www.proactiveinvestors.com on February 24, 2016 and featured in The CSE Quarterly.

“Why didn’t I come up with that…it’s so obvious?”  Pretty much all of us have seen a new product or service and wondered why it took so long for someone to finally do something with an opportunity that had been sitting right under everybody’s nose.

Lynn Mueller is one executive who refused to let such an idea get away, founding International Wastewater Systems (CSE:IWS) in 2010 to make a difference for customers and the environment by recycling something most of us discard on a regular basis without even thinking.

Warm water from showers, kitchen sinks and other sources cascades down the drain in huge volumes every second of every day, the energy initially used to heat that water being lost completely, or actually becoming a detriment by reaching our oceans and introducing unneeded heat to them.

International Wastewater Systems, or IWS as the company calls itself for short, recaptures that energy using technology that Mueller, the company’s president, explains is a century old, quickly sending it back up the chain to be used again.  It is a simple concept and it works, with users in Canada, the United States and Europe addressing their energy needs in a responsible way, and saving money at the same time.

The equipment that makes this happen is called the SHARC unit, developed in-house during the company’s first four years.

“I started out as a refrigeration mechanic, spending my early work years doing refrigeration and heat movement,” explains Mueller.  “All I’ve ever known my entire life is how to move heat.

International Wastewater Systems invented what we call SHARC technology, which is sewage heat recovery specifically designed to recapture a third of the energy used in the world that finds its way down the drain,” he continues.  “We refer to ourselves as the ultimate in renewable energy.  It is the same energy – we just use it one day, re-capture it, and then use it again the next day.”

The company did all of its original SHARC system installations in and around Vancouver so it could access them easily for monitoring and tweaking.  A couple of years ago product refinement had reached the point where Mueller decided that SHARC was ready for prime time.

The reaction has almost been more than the company can handle, with Mueller referring to the last 24 months as a “blur of growth” characterized by interest from all over the world.

It helps that SHARC is eminently scalable, with Mueller explaining that the system can handle anything from a single building to a district energy system.  Not surprisingly, SHARC units are custom-designed for each installation.

An easy way to understand the SHARC technology is to visualize it in stages, the first filtering out waste within the sewage that streams into the unit and returning it to the sewage flow so it can continue on its merry way.  What’s left is water that is clean enough to put through a heat exchanger, which extracts the heat energy for reuse.

“You temporarily intercept the flow, clean it up, use it for your heating needs, and then it goes off to the sewage treatment plant,” says Mueller.  “We’ve just had a thermal effect on it and nothing else.  We have not done any chemical processes or altered it in any way other than recovering the heat from it.”

Which brings us to that vintage technology – the heat pump.  “A heat pump is really just a glorified refrigerator,” explains Mueller.  “If you put warm food or beverages into a refrigerator, a few hours later your food is cold but the back or your refrigerator is warm – that is a heat pump in action, moving heat from the warm product into the refrigeration system and then by means of that heat pump it is rejected outside.”

Within the realm of IWS’s technology, that warmth is most often directed back into a building or used to heat water.

One of the installations of which IWS is most proud can be found in Sechelt, a small city popular with tourists and retirees on British Columbia’s picturesque Sunshine Coast.

“Sechelt built the world’s cleanest and most efficient water treatment plant,” says Mueller.  “The water leaving the Sechelt Water Resource Centre is of a quality such that you can actually drink it.

“The philosophy at the treatment plant was to be completely sustainable.  Energy recovered from the sewage heats and cools the entire building, so it uses no fossil fuels.  The system has worked flawlessly now for two years and people come from all over the world to see it.”

Potential users in Europe needn’t travel quite so far to see the SHARC system in action, as IWS has an office in Leicester.  And there are more international locations to come, as the company follows a philosophy of supporting the communities that welcome its products.

“Part of our strategy of being sustainable is that we want to manufacture and employ people where we do business.  Rather than building things offshore, we want to be a functioning, live part of every community where we operate.  For example, we want to open an office in Australia and will find a way to manufacture there and create jobs and become a functioning part of a sustainable, local community.”

The sustainability part is reflected not only in a commitment to respecting local communities, but in the efficiency of the system as well.  IWS’s equipment is not something developers install just to make themselves feel good.  The units run at what Mueller explains as somewhere between 400% and 500% efficiency, meaning that for every dollar spent operating the system, the owner gets back around $5.00 worth of heat.

With economics like that, it is easy to understand why the business is growing quickly.  Mueller says he foresees orders totaling tens of millions of dollars over the next three years, with cash flow likely turning positive in 12-18 months.  The public listing on the Canadian Securities Exchange in October 2015 was seen as a cost-efficient way to give the company access to the capital that will help fuel its revenue growth.

At the moment, revenue is generated in one of two primary ways, depending on jurisdiction.  In North America and most other markets, units are sold to the user, with IWS also collecting an ongoing revenue stream through maintenance work.

In the UK, however, the company enters power purchase agreements for its installations through the government’s Renewable Heat Incentive.  This program sees the government commit to paying a project owner a rebate for recovered green energy for 20 years.  IWS partnered with British institutional investors for the capital it needed and Mueller says the groups are working together well and should enjoy good returns on investment.

Helping to open additional international markets for IWS going forward is a new product called Piranha.  This is a standardized, self-contained heat pump built specifically for hot water heating that, like the bigger SHARC units, recovers heat from wastewater.  The stand-alone Piranha system is designed for residential buildings of between 50 and 200 units, and given the pace of urban densification worldwide seems like a product tailor made for the times.

“At its core, our message is that we can retrieve energy for you efficiently and without effort on your part, so there is no reason to throw it away,” concludes Mueller.  “As we move to a carbon free economy, we have developers coming to us and saying they want to plan for the future and get off of fossil fuels as much as they can.  We are the vehicle to do that because we can recycle more energy than anybody else and do it for any building in the world.”

Learn more about International Wastewater Systems at www.sewageheatrecovery.com and on the CSE website at: http://thecse.com/en/listings/technology/international-wastewater-systems-inc