Orpheus Minerals launches $6m IPO to fund domestic uranium exploration

The discovery of greenfield uranium deposits in South Australia and the Northern Territory will be the focus of ASX debutant Orpheus Minerals when it hits the boards this month.

Orpheus has launched a $6 million initial public offering to kick-start exploration and provide funds for it to chase high-grade sandstone or sediment-hosted and unconformity (hard rock) deposits.

The company, which is a spin-out of Argonaut Resources (ASX: ARE), will also have a significant project generation budget with the aim to expand and build its pipeline.

Orpheus’ IPO will be based on the issue of a minimum 30 million shares at $0.20 each and will comprise a $3 million priority offer for Argonaut shareholders and a $3 million broker firm and general public offer.

Argonaut will retain a 26.9% interest following completion of the offer.

The offer is being led by Adelaide based broker Taylor Collison and Becketts Lawyers.

Orpheus is expected to list on the ASX before month end using the ticker code ‘ORP’.

Portfolio of assets

Argonaut has compiled a portfolio of assets within Orpheus and its wholly-owned subsidiary Trachre through direct application as well as corporate transactions with tenement holders.

It includes early-stage projects at Frome/Erudina and Cummins (in South Australia) and Mount Douglas (Northern Territory) and new applications at Ranger-North East (30 kilometres from the decommissioned Ranger uranium mine), T-Bone (the broader area containing at least 13 uranium deposits and 15 occurrences) and Woolner.

The project generation initiative will focus on areas which have seen limited exploration since Australia’s uranium boom of the 1970s, with Orpheus targeting palaeochannel and unconformity uranium deposits that are amenable to simple and economic extraction methods.

Orpheus said an opportunity exists to achieve “science-led exploration success” by leveraging new geophysical datasets in terrains which have lacked modern, systematic uranium exploration.

Uranium production

Last year, South Australia and the Northern Territory were responsible for the production of 4,192 tonnes of uranium, or approximately 8.7% of total world output.

Orpheus aims to capitalise on this success, led by an executive team with experience in the application of advanced techniques for uranium exploration and a track record of financing and developing resource projects around the world.

Underpinning the company’s strategy is a forecast increase in mid to long-term global demand for uranium in an environment where supply from stable jurisdictions (such as Australia) is currently in structural decline.

The World Nuclear Association has predicted demand will jump 27% from now until 2030 and a 38% from 2030 to 2040, with this demand expected to come mostly from the US, Europe or North Asia.

These regions use uranium in the production of zero-emissions power (meaning they do not directly output carbon dioxide during electricity production) and are considered to be viable and safe options for nuclear generation to meet increasing energy needs.

Right timing

Orpheus chairman Pat Elliott said depressed uranium prices and a market imbalance have created the right timing to launch Orpheus on the public market.

“After a considerable period of low prices providing minimal incentive for investment in exploration, as well as little in the way of uranium discoveries in the last 30 years in Australia, the market may be entering a period of significant imbalance amidst increasing uranium demand based on projected new nuclear reactors being put into operation,” he said.

“All of this is occurring in the global political and economic context of carbon dioxide emission abatement and longer-term net zero targets … greenfield uranium exploration will need to significantly increase to find the uranium mines of the future and Orpheus intends to be at the forefront of this effort.”