Black Friday is Now! Don’t miss out on up to 60% OFF InvestingProCLAIM SALE

Alligator Energy's strategic partnership with Traxys delivers opportunities

Published 13/06/2023, 12:28 pm
© Reuters.  Alligator Energy's strategic partnership with Traxys delivers opportunities
UXXc2
-

Alligator Energy Ltd (ASX:AGE) has made significant progress in its strategic partnership with Traxys North America LLC, the US branch of the global commodities trading group Traxys.

Open doors

This collaboration, formed in May 2021, has opened doors for Alligator in uranium marketing, long-term offtake contracting, project development financing and uranium and energy minerals project acquisitions.

Traxys, a renowned merchant in metals, minerals and alloys, boasts an annual turnover exceeding US$9 billion and its uranium marketing and trading group operates across the Americas, Europe, Australia and Asia, handling up to 15 million pounds of U3O8 annually. It also manages contract supply books in conversion, UF6, futures and options.

Alligator has reaped significant benefits from this partnership. The company has coordinated more than 25 meetings with nuclear utilities in the US and Europe, identifying key anchor nuclear utilities interested in establishing conditional offtake contracts.

Uranium and nuclear fuel pricing trends

Joint participation in global nuclear conferences, including the recent World Nuclear Fuel Market meeting, has allowed Alligator to engage in discussions on uranium and nuclear fuel pricing trends.

The Traxys agreement has facilitated the evaluation of external uranium resource opportunities, enabling the development of a future supply pipeline. Alligator has received regular uranium and nuclear market updates from Traxys, supporting informed decision-making at both the board and management levels.

The ability to access pre-production finance of up to US$15 million through a secured commercial prepayment for U308 (ASX:UTO) under the Traxys agreement is expected to significantly contribute to the completion of a bankable feasibility study, mining lease approval and a final investment decision for the Samphire Project.

Alligator Energy and Traxys recently attended the World Nuclear Fuel Market meeting, where the shortage of enriched uranium product (EUP) in short and long-term markets was a key topic.

Transport difficulties and restrictions on Russian material, along with self-imposed delivery restrictions from Russia, have exacerbated the shortage. As a result, uranium spot prices have risen to US$57 per pound this month and the long-term price reached US$55 per pound in May.

Developing relationships with nuclear utilities takes time and the planned Field Recovery Trial at Samphire presents an opportunity for Alligator and Traxys to showcase the project's technical operations to prospective customers. This trial-stage engagement can help foster trust and facilitate future business partnerships.

Market access

Alligator Energy views its relationship with Traxys as a significant advantage, providing market access and potential uranium supply to support mine start-up and increase market share. The ongoing interactions with potential offtake customers and industry players over the past two years have already proven valuable.

“We view the relationship with Traxys as a key differentiator for Alligator Energy, providing market penetration into the opaque long-term uranium and nuclear fuels contracting business, while providing potential access to available uranium supply to either support mine start-up, or add to produced uranium volumes and increase market share,” said Alligator CEO and MD Greg Hall.

“The broader benefit of direct engagement with potential offtake customers and the wider industry is already apparent from the interactions that have occurred over the last two years.”

Alligator Energy's collaboration with Traxys has positioned the company as a key player in the uranium and nuclear fuels contracting business, enabling market penetration and potential growth in uranium supply and market share.

Read more on Proactive Investors AU

Disclaimer

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.