Prolonged Uranium Bull Run Just Getting Started

• Uranium prices have hit a 16-year high, crossing $100/lb, driven by supply deficits and rising nuclear energy demand
• Higher prices expected to last due to underinvestment and long lead times to bring new supply online
• Geopolitics exacerbating supply issues, with Western countries needing non-Russian supply
• Small modular reactors (SMRs) emerging as an important new source of demand
• Multi-year bull market underway, with prices potentially reaching up to $200/lb

Uranium Rally Gaining Steam Amid Deepening Supply Squeeze

Uranium prices have staged a powerful rally over the past year, rising above $100 per pound for the first time since 2007. Industry experts argue the uranium market is undergoing a structural shift, with a widening supply deficit coinciding with surging demand for nuclear power. Higher prices are here for longer,” he stated in a recent interview, citing underinvestment in new mines. He sees uranium potentially reaching up to $200/lb, adjusted for inflation, matching the 2007 high.

Supply Struggling to Keep Pace

The key driver of higher prices is the yawning gap between mine supply and reactor requirements. Annual demand stands at around 200 million pounds, well above current production of 145 million pounds. Bringing new mines online takes years due to permitting delays and shortages of equipment and skilled labor.

It will take time and so higher prices are here for longer.

Geopolitics has further roiled the market, with Western nations shunning supply from top producer Russia after its invasion of Ukraine. The supply/demand imbalance is much more pronounced in countries like the U.S., which produces almost no uranium domestically yet has the highest nuclear electricity use.

Soaring Demand Adds Catalyst

Rising demand for reliable, low-emissions baseload power is seen as supercharging nuclear energy growth. An estimated $2.3 trillion of investment in new reactors is slated over the next two decades.

Small modular reactors (SMRs) are also amplifying demand, opening up new markets. Mr. Adnani recently signed a deal to supply SMR pioneer TerraPower, backed by Bill Gates. Widening applications like remote mines and data centres suggest the market is growing; it's not just traditional utility demand.

With utilities having ignored uranium over the past 30 years. It will take time for the supply side to respond and increase production. Therefore this will be a long-standing bull market.

Investment Thesis for Uranium

• Widening supply/demand imbalance supports structurally higher prices over a multi-year horizon
• Additional upside potential from rising nuclear energy demand as countries pursue net-zero emissions targets
• Geopolitical tensions constricting Western supply add price pressures
• The emergence of SMRs brings a new source of demand not priced into the market
• Uranium equities offer leverage to rising uranium prices – UEC well positioned with low-cost production growth

With uranium emerging from an extended downturn, growing clarity on a structural supply deficit has powered a price surge to 11-year highs. Industry leaders expect further momentum amid surging nuclear power demand and constraints hampering new mine output. Small modular reactors are also set to grow the market. For investors, uranium equities offer leveraged exposure to this compelling trend.

Uranium Companies to Watch

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 Falchani lithium 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.

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.

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.

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. The fully licensed project also has a feasibility to expand to 7Mlbs pa. 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 is 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.