Economic Realities of Bringing Uranium Production, North America Continues Advancing On Growing Supply Gap

• The uranium market shows a fundamental supply-demand imbalance with term prices steady at $80/lb while spot prices have weakened to $65/lb, with industry experts warning of a significant supply gap by 2030.
• Global uranium production remains well below consumption with the US producing only 1-2 million pounds domestically against 50 million pounds of annual demand, highlighting critical import dependence.
• Geopolitical factors including Russian supply restrictions, Chinese influence in Kazakhstan, and a US Section 232 investigation create uncertainty but potential advantages for North American producers.
• Multiple uranium companies (Ur-Energy, F3 Uranium, Nuclear Fuels, Laramide Resources, GTI Energy, Premier American Uranium) are advancing projects amid growing demand from traditional utilities and new technology sectors.
• Investors should consider a portfolio approach with exposure to producers, developers, and explorers in stable jurisdictions as current prices appear disconnected from the economic realities of bringing new production online.

The global uranium market sits at a critical inflection point as nuclear power experiences a renaissance amid growing energy security concerns and decarbonization goals. Despite a disconnect between spot prices (currently around $65/lb) and term contract prices (holding steady at $80/lb), industry experts point to fundamental supply-demand dynamics that suggest significant structural challenges in meeting future uranium requirements.

"The fundamentals are better now than I've ever seen them in 50 years," notes Dustin Garrow, Managing Principal at Nuclear Fuel Associates, who has spent five decades in the uranium industry. This sentiment reflects growing recognition of a looming supply gap that existing and planned production cannot fill, creating potential opportunities for investors in this strategic sector.

Supply Chain Challenges: From Mine to Reactor

Mining Production Shortfalls

Global uranium production remains well below annual consumption, with significant reliance on secondary supplies and inventory drawdowns. The United States consumes approximately 50 million pounds annually but produces only 1-2 million pounds domestically, highlighting a critical dependence on imports.

Mine restarts that were anticipated to help fill the supply gap have encountered difficulties. Projects like MacArthur River, Langer Heinrich, and Alta Mesa collectively fell short of production targets by approximately 3.5 million pounds in 2024.

As Garrow explains, "Between now and 2030, maybe 2031, we see a pretty small group that could finance, build, and start operating new greenfield projects."

Dustin Garrow, Uranium & Nuclear Market Commentator

Geopolitical Factors: Supply Security Concerns

Geopolitical considerations are significantly impacting the uranium market, creating both uncertainty and potential catalysts for price movements.

The U.S. has initiated a Section 232 investigation under the Trade Expansion Act of 1962, examining critical minerals including uranium from a national security perspective. This follows a previous uranium-specific investigation in 2018-2019 that concluded imports threatened national security but didn't result in protective measures. The current investigation, expected to conclude around October 2025, could potentially lead to tariffs or domestic purchase requirements.

Russian uranium supplies face restrictions in Western markets following the invasion of Ukraine, with the U.S. implementing a ban on Russian nuclear fuel. While there is speculation about potential waivers or a possible return of Russian material after a peace agreement, the uncertainty is causing utilities to defer term contracting decisions.

Chinese influence is growing in the uranium supply chain, particularly through investments in Kazakhstan and Africa. As Garrow notes, "All it takes is a call from Beijing or Moscow" to potentially redirect Kazakh supplies given the ownership structures in place. Kazakhstan, the world's largest uranium producer, has oriented its uranium sales toward China and Russia, with a 45-million-pound contract signed with China for deliveries from 2026 through 2030/31.

Price Dynamics and Investment Considerations

The uranium market currently exhibits a peculiar disconnect between spot and term pricing. While spot prices have weakened to approximately $65/lb, term prices have held steady at around $80/lb for over a year. According to industry experts, this disparity reflects the difference in market participants rather than fundamental oversupply.

The spot market is dominated by financial traders, with over 90% of transactions in 2024 conducted by intermediaries rather than end-users or producers. This has created a thin market where relatively small volumes can impact prices. Meanwhile, term prices have remained firm at around $80/lb, with producers showing reluctance to sign contracts at lower prices. This stance reflects the economic reality of developing new uranium projects, particularly greenfield developments that require significant capital investment.

Uranium Developers

Ur-Energy

Ur-Energy is ramping up production at its Lost Creek facility in Wyoming while simultaneously developing its second Wyoming mine, Shirley Basin, expected to be operational by early 2026. The company has secured seven contracts worth approximately 5.84 million pounds over the next few years, primarily with US utilities and at favorable pricing terms that include inflation escalation.

CEO John Cash reports significant improvement in production metrics:

"Flow rates have come up dramatically. We are producing consistently now at a rate of around 400,000 pounds on an annualized basis. That's dramatically better than where we left 2024 production."

With improving operational metrics and a second mine under development, Ur-Energy represents one of the few active producers in North America. The comapny is also excited for its second mine in the process of building, also in Wyoming - the Shirley Basin. It is expected to be online by early next year which will take the mine capacity up to 2.2 million pounds per year as per Cash.

John Cash, CEO of Ur-Energy

F3 Uranium

F3 Uranium has announced a significant new uranium discovery in Canada's Athabasca Basin, with 33 meters of mineralization showing counts over 37,000 CPS, exceeding their previous JR zone discovery. CEO, Dev Randhawa, explained the significance: "We found 23 meters of highly radioactive material and in it there were parts over 37,000 counts per second. So we know we've hit something. The mineralization is over 33 meters and JR zone is only 22 meters."

This represents the company's fourth major discovery in the region, reinforcing their exploration expertise. The discovery is located at approximately 400 meters depth, which compares favorably to some competitors' projects at 800 meters or deeper.

Dev Randhawa, CEO of F3 Uranium

Nuclear Fuels

Nuclear Fuels acquired the TenSleep Uranium Project in Wyoming's Powder River Basin, which CEO Greg Huffman describes as an exciting addition to Nuclear Fuels' portfolio given it is located less than 20 miles from Kaycee Uranium Project in Wyoming, and is known to host uranium mineralization based on historical production and exploration work.

What makes TenSleep particularly noteworthy is its geological characteristics, which are similar to the high-grade deposits in Saskatchewan's prolific Athabasca Basin rather than the typical roll-front deposits common in the United States. This presents an excellent opportunity for the discovery of an exciting new type of potentially In-Situ Recovery-amenable uranium in Wyoming according to Huffman.

Laramide Resources

Laramide Resources has filed an updated NI 43-101 Technical Report for its Westmoreland Uranium Project in Queensland, Australia. The updated Mineral Resource Estimate reports a total Indicated Resource of 48.1 million pounds of U₃O₈ (27.8 million tonnes at an average grade of 770 ppm) and a total Inferred Resource of 17.7 million pounds (11.8 million tonnes at an average grade of 680 ppm).

This represents a substantial resource base, with 70% now classified as Indicated and 30% as Inferred. The update includes re-estimates of the Redtree, Huarabagoo, and Junnagunna deposits as well as an initial resource for Long Pocket, strengthening the company's position as a developer of advanced uranium projects in Tier-1 jurisdictions.

GTI Energy

GTI Energy is advancing its Lo Herma ISR Uranium Project in Wyoming's Southern Powder River Basin, with a Scoping Study on track for delivery in Q2 2025. The company has completed all fieldwork studies including metallurgy and hydrogeology, as well as mine unit wellfield layouts and wellfield construction cost estimates.

"This is an important milestone for the Lo Herma project's development and keeps GTI on track to complete our Scoping Study during this quarter. The well field planning and process engineering studies are completed and costed which puts us in a good position to deliver the study and establish baseline economics for the project," notes Executive Director Bruce Lane. The company holds a resource of 8.57 million pounds at Lo Herma (6.21 million tonnes at 630 ppm) plus additional resources and exploration targets at other projects.

Premier American Uranium

Premier American Uranium is fast-tracking its Cebolleta Uranium Project in New Mexico toward a Mineral Resource update and Preliminary Economic Assessment (PEA), expected in early summer 2025. The company plans to incorporate historical drilling results and technical data from the former Willie P underground mine, which weren't available for the most recent resource model.

CEO Colin Healey comments, "We are excited to update the project-wide mineral resource model for Cebolleta and formally commence the PEA process. Since acquiring the Project last year, we have achieved several important milestones, each ahead of schedule, and we believe this marks a pivotal step in transitioning from exploration to development."

The Investment Thesis for Uranium

• Structural Supply Deficit: Global uranium production remains well below consumption with a projected supply gap by 2030 that existing and planned projects cannot fill.
• Rising Production Costs: Restart projects are experiencing 45% cost increases over projections, while new greenfield developments require prices at or above $80/lb to be economically viable.
• Growing Demand Base: Traditional utility demand is expanding through reactor life extensions and new builds, while emerging demand from data centers and AI companies creates additional upside.
• National Security Priority: Renewed focus on domestic supply chains and energy security, with potential for supportive government policies following the Section 232 investigation.
• Fuel Cycle Bottlenecks: Constraints in conversion and enrichment capacity create additional pressure on the nuclear fuel supply chain, potentially leading to higher uranium prices.
• North American Advantage: Companies with U.S. and Canadian assets may benefit from geopolitical trends reducing reliance on Russian and Kazakh supply.
• Producer Discipline: Term contract prices remaining firm at $80/lb despite spot price weakness indicates producer conviction about cost structures and future fundamentals.
• Actionable Strategy: Investors should consider a portfolio approach with exposure to producers, developers, and explorers, focusing on companies with projects in stable jurisdictions.

The uranium market exhibits fundamental supply-demand dynamics that support a constructive investment outlook. Current prices appear disconnected from the economic realities of bringing new production online, particularly given the need for greenfield projects to meet demand beyond 2030. While near-term price movements may remain volatile due to financial traders' dominance of the spot market, the medium to long-term outlook points to higher prices driven by structural supply limitations, production challenges, and growing nuclear energy demand from both traditional and emerging sources.

The geopolitical environment further complicates the picture but potentially creates advantages for North American uranium companies as Western utilities seek to diversify away from Russian and Kazakh supplies. For investors with appropriate risk tolerance and time horizons, these dynamics present a compelling opportunity to gain exposure to a critical element of the global energy transition and security landscape.