Guess which ASX mining share is surging 43% on a new uranium find

This mineral explorer had some good news for the market on Tuesday.

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Key points

  • The DevEx Resources share price is soaring today on news the company has discovered high-grade uranium
  • The deposits have been found at the company's 100%-owned Nabarlek project in the Northern Territory
  • The company says it will now expand drilling at the site

The DevEx Resources Ltd (ASX: DEV) share price is riding an enormous wave on Tuesday after announcing the discovery of high-grade uranium

DevEx shares are currently swapping hands for 38.5 cents a share, 28.33% higher than yesterday's closing price. Earlier today, the company's shares hit 43 cents a share, an intraday spike of more than 43%.

The ASX minerals explorer seems to have struck early success at its 100%-owned Nabarlek Uranium Project. 

Let's get stuck into some further details on the company's project milestone.

What has DevEx found? 

The Nabarlek Uranium Project is located in Alligator Rivers Uranium Province in the Northern Territory.

The Nabarlek uranium mine is considered Australia's highest-grade uranium deposit with past production of 24Mlbs @ 1.84% U3O8. The DevEx drill campaign has uncovered the following uranium equivalent intercepts:

  • 10.7m @ 1.20% eU3O8 from 123.4m, incl 3.2m @ 3.05% eU3O8
  • 9.1m @ 0.15% eU3O8 from 50.5m, incl 0.4m @ 0.80% eU3O8

The region presents a major opportunity for the company as uranium may play a central role in a low-carbon future.

As well, electric vehicles need electricity to recharge and uranium can act as a primary energy source. 

This likely explains why optimism has rocketed the DevEx share price today.

The drill result ultimately means DevEx now knows such high-quality uranium exists. As a result, the drilling programme will be expanded with a second rig arriving shortly, according to the company. 

Management upbeat about future prospects

DevEx managing director Brendan Bradley said: 

Our 2022 drilling programme at Nabarlek is off to a flying start, with the early success at Nabarlek South and North Buffalo clearly demonstrating the scale and quality of the opportunity in this highly endowed uranium field. The historic Nabarlek uranium mine has shown that these high-grade deposits can exist within a lens of between 30m and 75m in length.

It's important to focus on Bradley's comment about the quality of the opportunity. The company's fortunes are not yet set in stone because the uranium deposits need to be extracted before they can be sold. 

My view on the DevEx share price

In the last twelve months, the DevEx share price has risen by around 64%.

It's certainly taken the opposite trajectory to the S&P/ASX 200 Index (ASX: XJO) which has fallen by around 7% in the last year.  

DevEx has a current market capitalisation of $121 million at the time of writing. 

I believe it's important to understand the enormity of this discovery. It's essentially moved DevEx further away from the proof of concept stage and closer to commercialisation. 

DevEx shares are a less speculative investment now but what does the future hold for the uranium market when more deposits are discovered by competitors? 

Also, what is the likelihood of there being an oversupply? 

These are some of the risks I'd be considering in evaluating DevEx as a potential investment. 

Motley Fool contributor Raymond Jang has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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