Madison Metals: Uranium Mining Meets Fintech Innovation
Madison Metals (CSE: BRANCH) (OTCMKTS:MMTLF) is a uranium resource developer with a first-of-its-kind twist: Its unmined uranium backs a Non-Fungible Token (NFT) ruled by Lux Partners Ltda private financial technology company based in the Isle of Man.
So how does this work and how does it improve the chances of a positive investor experience?
Let me explain.
Madison Metals is a CSE-listed company with a highly experienced management team exploring a uranium project in Namibia with a historic uranium asset estimated to contain over £9 million. This shows a resource estimate from 2015 prepared by SRK Consulting.
Lux Partners Ltd. Lux drives Lux networkthe first decentralized blockchain integrated with and powered by a network of regulated banking and remittance partners.
Lux has agreed to “tokenize” up to 20 million pounds of yet-to-be-mined uranium, which it will market to interested parties as an NFT. Each NFT will be backed by one pound of Madison’s uranium. The funds realized from the sale of NFTs (plus transaction fees and royalties) will be returned to Madison to provide a non-dilutive alternative to exploration funding.
“Having the opportunity to potentially monetize our uranium resources at a premium using innovative technology provided by industry leaders is a testament to our forward-looking strategy to deliver shareholder value,” said Duane Parnham, president and CEO of Madison Metals in a press release. recent press release.
So instead of issuing shares to raise capital, which by the very act of dilution reduces shareholder equity relative to the value of the resource in the ground, the company ‘forwards’ up to £20m of its uranium to Lux.
The benefit of this approach is evident in Madison’s share structure. The company has a total of 20.5 million issued and outstanding shares – a compact issue that bodes well for future developments in the share price. Total fully diluted shares amount to an equally tasty 29.3 million.
The upside for shareholders means that Madison will have recurring income throughout the exploration and development phase.
This innovation provides Madison shareholders with a way to partially monetize their uranium resource to finance further uranium resource development without relying on stock market sentiment to obtain financing.
In the current environment, it’s a truly groundbreaking development, underscoring the culture of outside-the-box thinking inherent in Madison’s leadership team.
According to Zack Kelling, Lux Partners CEO, “Through the effort, users are exposed to the upside of the uranium market while earning additional fees from lending and liquidity. By digitizing assets, Lux expects to unlock greater price discovery, asset value and liquidity throughout the lifecycle for mineral extraction.”
Madison Metals uranium will become available for staking on the Lux Network on October 15th, but will be available on all NFT exchanges after that.
In one pricing model, Madison would sell US$30 million worth of U3O8 at US$17.50 per pound, after which it would rise to an average price of about $40 per pound for the remaining 20 million pounds.
Of course, it is not necessarily a slam dunk that the company will realize the full value of the £20m 1 awarded to Lux. But if you compare the level of global interest in uranium mining to the exploding interest among NFT enthusiasts, it is easy to imagine that there is a whole new audience for an NFT that is actually backed by a physical energy commodity like uranium.
The demand for uranium is increasing
Nuclear power plants generate approximately 20 percent of the electricity used in the United States and are the country’s largest source of emission-free electricity. According to the Nuclear Energy Institute, US nuclear power plants prevented the emission of more than 476 million tonnes of carbon dioxide in 2021.
With the sabotage of the Nordstream 1 and 2 pipelines now certain to increase pressure on energy availability in Europe just as winter approaches in the Northern Hemisphere, companies like Madison could become important components of revitalized zero-emissions energy mandates.
And with newer nuclear power generation technologies relentlessly advancing toward safety and stability in the process of nuclear fission, there are progressively fewer safety risks.
In accordance Spherical insight“The global nuclear power plant equipment market size was USD 31.72 billion in 2020. The market is estimated to grow from USD 32.44 billion in 2021, then to USD 38.82 billion in 2030, growing at a CAGR of 2.6% in the 2021-2030 period.”
The NFT market is still growing despite weakness in the third quarter
Coin Telegraph reports that the NFT market broke the 11 million ETH mark for the first time in three months, while the number of NFT holders grew by 32.24% along the same timeline, as shown below.
Conclusion
Madison Metals and Lux Partners’ new approach to capitalizing exploration through NFTs is a completely new approach to raising capital less dilutively than issuing shares and warrants. Investors thus gain exposure to the upside in uranium demand and industrial growth, and NFT investors gain exposure to uranium prices at a discount.
If this works as expected for Madison, it could be a paradigm shift in the way natural resource exploration and development is financed.
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