Having looked after ourselves through the pandemic as evidenced by their $16.5 million in sex toy sales over the past year, quasi-explorer Delecta (ASX: DLC) is seeking to multiply that revenue in the form of rising uranium prices.
Yes, you did read that right.
While dabbling in mineral exploration, Delecta has continued to operare its wholesale sex toys business in Australia and New Zealand which provides revenue to fund its mining activities. Amid rising uranium prices and their reasonable cash position courtesy of the retail business, Delecta has resumed exploration of uranium at their Rex Project in Colorado where initial samplings have indicated high-grade uranium and vanadium is present.
“Due to renewed optimism surrounding future uranium pricing, the Company recently decided to ramp up exploration at its majority owned REX uranium-vanadium project,” said Delecta Managing Director, Malcolm Day.
“The project’s history of uranium mining, its proximity to operating infrastructure and the prevailing supportive government regime, bodes well for the development of the project.
“We look forward to continuing exploration at the REX project and evaluating other potential uranium-vanadium projects in the area.”
The Rex Project spans across 20 square kilometres where Delecta owns 60% of the project through their subsidiary Sunrise Minerals. The project is located within the Uravan Mineral Belt of Colorado which is well known for its historic production of uranium.
While exploration is accelerated with assay results from the current program expected in the coming weeks, it is an opportune time to resume uranium activities for Delecta at Rex where there is visible mineralisation of uranium on the surface outcrops.
12 initial samples recorded an average grade of 2,246ppm U3O8 (0.22%) with a peak value of 5,280ppm U3O8 (0.53%) returned.
The uranium market has been subdued since the Fukushima incident in 2011, but has been rising to reach 6-year highs of USD $42 per pound over the past month.
Delecta expects the spot price to reach $48 within the short term while industry expectations could see it reach $60 per pound by 2028.
These forecasts have resulted in a flurry of explorers resuming work on their uranium projects where production becomes profitable at these commodity prices but few will be funding their exploration in the same manner as Delecta.
In their Preliminary Report for FY21 when summarising their sex toy operations, Delecta cited “Government stimulus packages” as the reason for “a positive increase in sales revenues in the first half of the financial year”.
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