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How Junior Mining Companies Hit the Reset Button

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How Junior Mining Companies Hit the Reset Button

How Junior Mining Companies Hit the Reset Button

Special thanks to Dajin Resources for sponsoring.

There is a saying in junior mining that “a rising tide floats all boats”. Basically what this implies is that when the market is doing well, all speculative companies benefit from a booming market at the same time. In other words, an investor can hold a position in any of these companies and receive a payoff.

However, what they don’t tell you is that a falling tide can make it a pretty rocky environment for even many of the best boats and navigators. In this type of environment, many companies can face dire circumstances in which they may need to get creative to survive. This is analogous to our current situation where junior mining stocks have been in a bear market for over four years.

If push comes to shove and a company’s situation becomes troubling enough, one answer is to hit the “reset” button. Management teams that cannot raise money may use this type of solution to rejig their share structure, pay off debt obligations, and eventually reposition their company to raise money again.

How does this work? First, the troubled company would roll back the stock such that multiple shares would be exchanged for one new share (for example, a 6:1 rollback would mean 6 old shares are turned into 1 new share). Note that such a rollback also changes the stock price by the same ratio, so a $0.01 stock would then be trading at $0.06.

Then, the company would issue new stock to settle any debt that is on the books and then raise money again. Ultimately, in order to be successful at any of this, the company needs to also shift their direction in some meaningful way. Changing the management team, switching focuses, or acquiring a new project may be ways to give a company new life.

While it is never fun to admit defeat for management teams or investors, ultimately this “reset” button is something that is a unique part of this sector and for good reason. It gives a clean slate, and creates a share structure and situation which can possibly be turned around.

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Uranium

Charted: Global Uranium Reserves, by Country

We visualize the distribution of the world’s uranium reserves by country, with 3 countries accounting for more than half of total reserves.

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A cropped chart visualizing the distribution of the global uranium reserves, by country.

Charted: Global Uranium Reserves, by Country

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

There can be a tendency to believe that uranium deposits are scarce from the critical role it plays in generating nuclear energy, along with all the costs and consequences related to the field.

But uranium is actually fairly plentiful: it’s more abundant than gold and silver, for example, and about as present as tin in the Earth’s crust.

We visualize the distribution of the world’s uranium resources by country, as of 2021. Figures come from the World Nuclear Association, last updated on August 2023.

Ranked: Uranium Reserves By Country (2021)

Australia, Kazakhstan, and Canada have the largest shares of available uranium resources—accounting for more than 50% of total global reserves.

But within these three, Australia is the clear standout, with more than 1.7 million tonnes of uranium discovered (28% of the world’s reserves) currently. Its Olympic Dam mine, located about 600 kilometers north of Adelaide, is the the largest single deposit of uranium in the world—and also, interestingly, the fourth largest copper deposit.

Despite this, Australia is only the fourth biggest uranium producer currently, and ranks fifth for all-time uranium production.

CountryShare of Global
Reserves
Uranium Reserves (Tonnes)
🇦🇺 Australia28%1.7M
🇰🇿 Kazakhstan13%815K
🇨🇦 Canada10%589K
🇷🇺 Russia8%481K
🇳🇦 Namibia8%470K
🇿🇦 South Africa5%321K
🇧🇷 Brazil5%311K
🇳🇪 Niger5%277K
🇨🇳 China4%224K
🇲🇳 Mongolia2%145K
🇺🇿 Uzbekistan2%131K
🇺🇦 Ukraine2%107K
🌍 Rest of World9%524K
Total100%6M

Figures are rounded.

Outside the top three, Russia and Namibia both have roughly the same amount of uranium reserves: about 8% each, which works out to roughly 470,000 tonnes.

South Africa, Brazil, and Niger all have 5% each of the world’s total deposits as well.

China completes the top 10, with a 3% share of uranium reserves, or about 224,000 tonnes.

A caveat to this is that current data is based on known uranium reserves that are capable of being mined economically. The total amount of the world’s uranium is not known exactly—and new deposits can be found all the time. In fact the world’s known uranium reserves increased by about 25% in the last decade alone, thanks to better technology that improves exploration efforts.

Meanwhile, not all uranium deposits are equal. For example, in the aforementioned Olympic Dam, uranium is recovered as a byproduct of copper mining occurring at the same site. In South Africa, it emerges as a byproduct during treatment of ores in the gold mining process. Orebodies with high concentrations of two substances can increase margins, as costs can be shared for two different products.

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