Gear Up For Uranium Mania

• Thinly-traded uranium spot market and rising uncovered utility demand suggest higher prices ahead
• Uranium price rise not matched by miners; shift expected as small/mid-caps begin outperforming
• Developers and explorers poised to benefit most as speculative interest enters sector
• US uranium miners have huge upside due to utility supply deficit and policy support
• Industry analysts increasingly warning of potential uranium price spike

With uranium prices more than doubling over the past 18 months to over $80 per pound, interest is growing among investors in capitalizing on opportunities within the uranium sector. As a globally scarce commodity that is fundamental for nuclear energy production, uranium market dynamics have far-reaching implications.

Thinly-Traded Market Primed for Further Increases

A unique factor driving recent uranium price rises is that it has occurred alongside declining spot market trading volumes. We’re seeing big price moves on very little volume. November 2022 saw uranium’s lowest monthly trading volume in 18 months, contrasted by a 10% price increase. This suggests traditional uranium sellers are more reluctant to give up inventory during this bull market. With supply tightening against growing uncovered utility demand in coming years, industry analysts widely expect further significant price rises.

Shift in Miner Performance Expected

So far, mining equities have notably underperformed the uranium spot price rise. However, this should change soon. The market is generally going to shift and we’re going to see the outperformance of the small and mid-caps. Historically at comparable price levels, speculative interest begins targeting developers and explorers for their potential outsized returns. With few existing producers left after years of low prices, larger mining companies like Cameco already reflect high market expectations. Buying Cameco, are you going to get the same torque as a $500 million developing company? Absolutely not.

Buying Developers and Explorers Offer Greatest Returns

For investors focused on maximizing returns, developers and explorers are seen as currently offering the best risk/reward profile. Increase exposure to mid-cap developers meeting key criteria like quality management, financeable projects in stable jurisdictions, and assets capable of near-term cash flow generation. Small explorers carry greater dilution risk from continual capital raises, but may still benefit from anticipated sector inflows. Overall, with far more investors aware of uranium’s scarcity than in previous cycles, the stage appears set for speculative attention to target the juniors next.

There’s a lot of torque ahead for uranium mining stocks given that we believe the price is heading much, much higher.

U.S. Miners Uniquely Positioned

Another area of focus is United States uranium producers. Beyond suffering the industry’s deepest losses in recent years, they now stand to gain exceptionally as utilities seek domestic supply sources. With nuclear power responsible for over 50% of America’s clean energy, political support is also accelerating to spur domestic fuel capacity. Considering these dynamics, the expert enthusiastically concludes the huge upside for United States uranium-producing companies.

Price Spike on the Horizon

Perhaps most notably, industry consultancies like UxC are now advising utilities to prepare for scenarios where financial speculation creates uranium supply shortages. With investors currently controlling large uranium stockpiles only set to grow, the expert says the ingredients for a dramatic price spike already exist. They admit previous skepticism but now concede a price spike is likely...All it needs is capital to flow into those investment vehicles.

While unpredictable in its timing and scale, such a spike would significantly impact returns across uranium investments. It could see uranium spot price hit $200 by mid year.

The Investment Thesis for Uranium

• Globally scarce commodity essential to nuclear energy production
• Supply/demand imbalance threatens higher prices for long duration
• Thinly-traded spot market exaggerates price moves from capital inflows
• Miners lagging price rises offer chance to benefit from catch-up
• Developers/explorers provide optimized torque as speculation enters
• Key criteria for stock selection include financeability and jurisdiction
• U.S. miners have exceptional fundamentals and policy support
• Conditions in place for dramatic price spike on investor activity

In summary, with uranium fundamentals, still overwhelmingly bullish despite the price run, a substantial investment upside likely remains. Miners presently provide the most attractive risk/reward dynamic to capitalize on in anticipation of further sharp spot price increases. Among these, smaller developers and explorers carry greater return potential as speculation accelerates in this thinly traded market. With global uncovered utility needs far outpacing foreseeable supply growth for years ahead, both experts and historical precedent suggest the uranium bull still has significant room left to run. Savvy investors would be wise to heed these signals and take appropriate portfolio positions.

Key Takeaways

• The uranium investment case is based on global supply/demand imbalance
• Thinly-traded uranium spot market exaggerates price impact from capital inflows
• Mining stocks offer the chance to capture value growth disconnected from rising commodity pricing
• Among miners, smaller developers/explorers are likely to benefit most from entering speculation
• A bull run could dramatically accelerate investor activity triggering a price spike scenario

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Bannerman Energy

Bannerman Energy is an Australian uranium development company focused on advancing its flagship 3.5Mlb pa open pit uranium project in Namibia, a major global uranium producer. Bannerman is currently working on Front End Engineering and Design (FEED) and financing for the Namibia project. The company also holds a significant 41.8% stake in Namibia Critical Metals, developer of the large-scale Lofdal heavy rare earths project in Namibia, one of only a few heavy rare earth deposits outside China.

Ur-Energy

Ur-Energy is a U.S. uranium mining company well positioned to benefit from rising uranium prices driven by growing demand for nuclear power. Within-situ recovery operations in Wyoming, Ur-Energy has been producing from its Lost Creek facility since 2013 and can now effectively double licensed annual production capacity to 2 million pounds with its permitted Shirley Basin project. With over $70 million in cash, Ur-Energy is funded to ramp up low-cost production from its Wyoming hub as it restarts wellfield construction. The company utilizes mining methods with a light environmental footprint and advancing next-generation technologies to further reduce costs. If uranium prices continue strengthening, Ur-Energy offers leverage as an experienced producer with scalable, permitted projects in a rising uranium market.

Global Atomic

Global Atomic Corporation is a publicly traded company with two main divisions - a Uranium Division that is developing the large, high-grade Dasa uranium project in Niger, which is now fully permitted with excavation underway, and a Base Metals Division that holds a 49%stake in a zinc production joint venture in Turkey operated by Befesa. The joint venture recycles Electric Arc Furnace Dust to produce zinc oxide concentrate sold to zinc smelters globally. Global Atomic’s unique combination of uranium production and cash-flowing zinc operations positions it well for growth.

Energy Fuels

Energy Fuels is the largest uranium and advanced rare earth element producer in the United States. The company has significant uranium production capacity and long-term sales contracts with U.S. nuclear utilities that it expects to fulfil starting in 2023-2024. Energy Fuels is also quickly moving to establish a domestic rare earth element supply chain, with plans to produce high-value separated REE oxides by late 2023 or early 2024. The company additionally produces vanadium when conditions warrant, recycles materials to recover uranium, vanadium and medical isotopes, and is advancing capabilities for medical isotope production. Overall, Energy Fuels is a major U.S. producer of strategic minerals like uranium and rare earth elements that are critical for energy, technology, and medical applications.

American Lithium

American Lithium is developing large-scale lithium projects in Nevada and Peru as well as one of the world's biggest uranium projects, with the goal of playing a major role in the transition to sustainable energy. The company's assets are the advanced-stage TLC lithium project in Nevada and the Falchanilithium project in Peru, which have robust preliminary economic assessments. American Lithium also owns the Macusani uranium project in Peru, which has seen significant historical development. With assets at various stages of pre-feasibility and feasibility studies, American Lithium is positioned to be a major player in lithium and uranium mining.

Deep Yellow

Deep Yellow has systematically built a portfolio of high-quality uranium assets to establish a significant production platform and realize its vision of becoming a leading international uranium mining company. With its experienced leadership team at the helm, Deep Yellow has set its sights on diversified production of over 10 million pounds per year, capitalizing on forecast supply squeezes. Its flagship Tumas mine in Namibia already claims one of the world's largest undeveloped uranium deposits as Deep Yellow advances toward a 2024 construction decision. Meanwhile, its Mulga Rock project in Western Australia progresses through feasibility studies for targeted development. Beyond existing core assets, Deep Yellow has accumulated extensive exploration ground at two prime locations in Namibia and Australia's Northern Territory through strategic acquisitions. These prospects provide substantial opportunities for unlocking further discoveries to continually expand its project pipeline over time. As energy security needs escalate globally, Deep Yellow stands ready to deliver the reliable uranium production that transitioning electricity grids urgently demand. With its production timeline aligned with major forecast supply deficits, Deep Yellow aims to cement itself as the go-to uranium supplier of choice for nuclear utilities worldwide seeking security and diversity of supply. Backed by disciplined leadership, Deep Yellow represents an emerging industry force promising investors exposure to the full lifecycle of value creation across resource discovery, project development and multi-decade uranium production. By targeting low-cost mining jurisdictions, adopting proven processing technologies and securing key infrastructure advantages, Deep Yellow has systematically built itself to deliver sustainable investor windfalls as the uranium bull market unfolds.

Baselode Energy

Baselode Energy is a Canadian uranium exploration company focused on the Athabasca Basin area in northern Saskatchewan. The company controls over 264,000 hectares of land that is free of any option agreements or underlying royalties. In September 2021, Baselode discovered the near-surface ACKIO uranium prospect on its exploration properties. The ACKIO prospect measures over 375 meters long and over 150 meters wide, with at least 9 separate uranium mineralized zones. Mineralization starts as shallow as 28 meters and 32 meters beneath the surface, extending down approximately 300 meters depth, with most mineralization occurring in the top 120 meters. The ACKIO prospect remains open at depth and to the north, south and east for further expansion. Baselode's exploration strategy centers on discovering high-grade uranium deposits outside of the Athabasca Basin near the surface in basement rocks. The company uses innovative and established geophysical survey methods to identify prospective shallow drill targets for high-grade uranium mineralization related to underlying structural controls. This technique has led Baselode to the discovery of the ACKIO prospect.

Nucelar Fuels
Nuclear Fuels Inc. is a Canadian uranium exploration company focused on in-situ recovery (ISR) projects in Wyoming and other proven jurisdictions globally. The company's priority asset is the Kaycee project in the Powder River Basin of Wyoming. This project has historical uranium resources distributed along a 33-mile mineralized trend with over 110 miles of mapped roll fronts. The property has been drilled extensively with over 3,800 historical drill holes. Nuclear Fuels has consolidated control of the Kaycee district, acquiring multiple historical uranium deposits and exploration targets. This positions the company to potentially advance the project portfolio into production. Beyond Kaycee, Nuclear Fuels plans to leverage its technical expertise to explore additional uranium properties and opportunities in established mining districts globally. Through aggressive exploration and consolidation of historical resources, the company aims to develop a pipeline of projects, prioritizing those that can be fast-tracked to production using the in-situ recovery mining method.

ISOEnergy
IsoEnergy is a Canadian uranium exploration and development company with projects focused in the Athabasca Basin of Saskatchewan. The company's flagship property is the Larocque East project in the eastern Athabasca Basin. This project hosts the high-grade Hurricane uranium deposit, which has the highest grade Indicated uranium resource globally. In addition to its exploration projects, IsoEnergy owns several permitted, past-producing uranium and vanadium mines in Utah. These mines are currently on standby but can be rapidly restarted to position IsoEnergy as a near-term uranium producer. The company has a toll milling agreement in place with Energy Fuels Inc. to process ore from its US projects. Beyond its Canadian and US assets, IsoEnergy holds uranium projects in various stages of exploration and development in Australia and Argentina. This diversified portfolio provides leverage to rising uranium prices across different jurisdictions. The company is advancing its Athabasca Basin projects while continuing the exploration on its global assets to drive future production growth.

Atha Energy

ATHA Offers Leveraged Exposure to World-Class Uranium Districts Athabasca Uranium Inc. (ATHA) provides investors with targeted leverage to potentially significant uranium discoveries across some of the world’s most prolific regions for new supply. As a focused mineral exploration company, ATHA has methodically accumulated the single largest exploration package covering the renowned Athabasca Basin. Spanning over 6 million acres, their claims provide unrivalled exposure to this district which has historically produced high-grade uranium deposits. Additionally, ATHA holds extensive prospective ground in the similarly uranium-rich Thelon Basin. Between these two core holdings in prime Canadian uranium provinces, the company has positioned itself amongst acreage with a proven exploration upside. Importantly, a subset of ATHA’s Athabasca land package involves a 10% carried interest in claims operated by sector leaders NexGen Energy and IsoEnergy. With ATHA carried through key exploratory expenditures, this allows leveraged participation alongside seasoned management advancing projects in the basin. For investors, ATHA brings focused leverage to maximizing discovery potential across districts that have delivered huge economic uranium resources. As sentiment improves around uncovered uranium value still unearthed in these Canadian districts, ATHA offers a targeted way to ride the upside. Their vast claim packages in underexplored but prolific terrain form the springboard for potential mineral discovery and resource growth in the coming bull cycle.