Uranium Breakout Moment as Market Rebalances and Opportunities Abound

• The global uranium market is undergoing a transformation, driven by rising demand for carbon-free baseload power, geopolitical shifts supporting nuclear energy, and constrained supply, creating a compelling investment case for uranium.
• Growing policy support for nuclear power in Europe and challenges facing alternative energy sources like green hydrogen and offshore wind are expected to drive uranium demand, while unprecedented producer discipline and a lack of investment in new mines contribute to a structural supply deficit.
• Junior uranium companies offer the potential for significant returns, with explorers making high-grade discoveries, near-term producers boasting robust project economics, and established, low-cost producers poised to benefit from higher prices.
• The investment thesis for uranium includes rising demand from nuclear energy growth, constrained supply due to underinvestment, and the potential for prices to reach $90-100/lb to incentivize new production, with investors advised to build a diversified portfolio across the uranium lifecycle.
• While near-term volatility is expected, the long-term fundamentals for uranium are compelling, and the sector offers significant upside potential as the imbalance between accelerating demand and limited supply growth drives the market into a structural deficit, positioning uranium to play a key role in the global energy transition.

The global uranium market is experiencing a transformation, driven by the convergence of rising demand for carbon-free baseload power, geopolitical shifts supporting nuclear energy, and constrained supply. This confluence of factors is creating a compelling investment case for uranium, with the potential for significant price appreciation as the market rebalances.

Growing Policy Support for Nuclear Power

Nuclear energy is experiencing a revival as countries seek reliable, low-emissions electricity to meet climate goals. Recent policy reversals in Belgium and Germany to extend the lives of existing reactors underscore this trend. Meanwhile, Canadian uranium projects are facing extended timelines for obtaining necessary permits and licenses due to heightened regulatory oversight of mining activities. Australia, approaching federal election, has its uranium project developers are making strategic decisions to postpone the commencement of their projects. They are waiting for uranium prices to reach and maintain higher levels and for more advantageous contract terms before proceeding with development.

These decisions carry immediate implications for uranium demand, as utilities that had been winding down inventories must now secure supply to operate longer than anticipated.

On the supply side, uranium producers are showing unprecedented restraint in bringing on new production. According to industry executives, prices in the range of $90-100 per pound will be required to incentivize new supply, significantly higher than previous estimates of $60-80 as discussed in Global Uranium Analysis: Detailed Examination of Supply, Demand, & Policy Dynamics in 2025

This discipline reflects the challenging economics of new mines, with increased operating and capital costs, as well as heightened ESG scrutiny of projects. For example, BHP's Olympic Dam expansion plans will increase copper output by 100% while only growing uranium production by 1%, highlighting the supply-side challenges even for tier-one assets.

Lack of Investment Creating Structural Deficit

The uranium sector has suffered from a decade of underinvestment following the Fukushima disaster in 2011. This has left a thin pipeline of new development projects poised to fill the impending supply gap as demand accelerates. Purepoint Uranium CEO Chris Frostad points out:

"The squeezing that we talk about in price, internationally and all these things that are going to affect it, are in fact affecting the long-term price of uranium and it's going up and up and up. That squeeze is going to continue. We're still looking at utilities who haven't been contracting to the levels they should be."

The lack of new mines, coupled with the end-of-life of several major operations this decade, is expected to result in a structural supply deficit. Even the world's largest producers, Cameco and Kazatomprom, have acknowledged that current prices are insufficient to support the required industry investment.

Juniors Offer Potential for Outsized Returns

For investors seeking leveraged exposure to a rising uranium price, junior miners provide the opportunity for significant returns. The key is identifying companies with experienced management teams, high-quality assets, and access to capital.

F3 Uranium

On the exploration side, companies like F3 Uranium, which made a high-grade discovery at the Patterson Lake North project in 2022, offer the potential for outsized returns on new discoveries. The company anticipates spending approximately $5 million on exploration in 2025 alone. The goal is to put out a steady stream of drill results and build towards a maiden resource estimate at the JR Zone.

CEO Sam Hartmann explains the potential:

"The closest analog to the JR Zone in terms of the style of mineralization is probably Triple R. And at Triple R, there's this chain of deposits that vary from 6 million pounds to 80 million pounds."

When the company is able to delineate a significant uranium resource across the PLN property, it could be a very attractive acquisition target for larger uranium producers active in the Athabasca Basin like Cameco or Orano.

Lotus Resources

For developers and near-term producers, the focus should be on asset quality and the ability to bring production online to capture rising prices. Lotus Resources, which is restarting the Kayelekera uranium mine in Malawi, is an example of a developer nearing production.

The Kayelekera uranium project in Malawi boasts robust economics, supported by a large resource base and competitive operating costs. A 2022 definitive feasibility study outlined a 10-year mine life with an annual production of 2.4 million pounds of uranium at an all-in sustaining cost of $44 per pound. At current long-term contract prices around $80 per pound, Kayelekera is expected to generate healthy operating margins translating to an impressive $70-80 million in annual operating cash flow.

"The spot market as you say has done something - it's been falling on very weak volumes. It's not a reflection of the market we'll be selling into or that we're targeting through our contracts. The long-term price has been very stable at around $81 a pound." - Managing Director Greg Bittar

While the immediate focus remains on restarting production at Kayelekera, Lotus Resources also offers investors significant exploration upside potential with its Livingstonia project in neighboring Botswana hosting a substantial uranium resource of 4.8 million pounds. Lotus continues to advance Livingstonia by optimizing the mining approach for the deep resource and investigating opportunities to reduce acid consumption and improve project economics.

Ur- Energy

Ur-Energy, the largest uranium producer in the US, offers a mix of current production and growth potential as it ramps up output at its Lost Creek mine and brings on the Shirley Basin project.

Ur-Energy has historically ranked as one of the lowest cost uranium producers globally and these costs are expected to remain very competitive going forward. CEO John Cash emphasized the value proposition:

"Historically, we've been a very low-cost producer with cash costs of $16-17 per pound. When you include all development costs, we've been in the mid-$40s. Going forward, we expect Lost Creek's all-in costs to be in the $45-50 range. Shirley Basin will be slightly more expensive since it's a smaller mine - potentially just above $50 per pound all-in costs.

While uranium prices are volatile in this environment, Ur-Energy stands out as one of the few uranium producers with the ability to quickly ramp up production from its existing operations located in the geopolitically stable jurisdiction of the United States. This positions the company to take advantage of the expected price increases and strengthening demand for uranium in the coming years.

Laramide Resources

Laramide Resources offers investors exposure to the strengthening uranium market through its portfolio of late-stage US and Australian development assets. CEO Marc Henderson emphasizes the company's leveraged upside to rising prices, noting how viable the company's are at current levels around $80/lb.

The company's flagship Churchrock ISR project in New Mexico is fully permitted and waiting on one final state approval, which could see the project shovel-ready by 2026. Churchrock boasts robust economics and the potential to produce 1-3 million lbs of uranium per year, positioning Laramide as a leading US producer.

In Australia, Laramide's Westmoreland project contains a large resource with conventional development optionality once a state uranium mining ban is lifted. Recent progress on greenfield exploration projects in Kazakhstan provide additional long-term growth potential for the company.

Energy Fuels

Energy Fuels is emerging as a leading US-based supplier of critical minerals, anchored by its growing uranium and rare earth businesses. The company is significantly expanding low-cost uranium production, targeting 2 million lbs/year in the near-term with a path to 5-6 million lbs/year longer-term.

CEO Mark Chalmers sees strong fundamentals supporting higher uranium prices, as 2025 Becomes A Critical Year for Uranium, Rare Earths & More:

"I don't know how more exciting it can get. And we're valued as a uranium company and we've got billion plus of other stuff that's coming down the pike. It's all unfolding the way we've planned it to. And right now the timing couldn't be better with the change of US Govt administration."

On the rare earth front, Energy Fuels is rapidly scaling up, emerging as the only major US-based producer of separated rare earth oxides. The company is advancing a phased approach to expanding its rare earth output, with a definitive feasibility study underway on a larger separation circuit.

The recent acquisition of a heavy mineral sands business adds another dimension to Energy Fuels, bringing exposure to critical minerals like zircon, titanium, and rare earths in Madagascar. Despite this growth, the company believes its current valuation does not reflect the underlying asset base, creating an attractive entry point for investors as Energy Fuels continues to execute on its strategy.

Global Atomic

Global Atomic is advancing its large, high-grade Dasa uranium project in Niger towards the home stretch of development. Recently signed Memoranda of Understanding and positive meetings with the government of Niger during the African Mining Indaba conference have reaffirmed the commitment to see the project built. President/CEO Stephen Roman highlighted the progress being made in a news release:

"By advancing the development of the mine, processing plant and infrastructure, we have significantly moved the Dasa Project closer to production while continuously adding to the intrinsic value of the Dasa Project.  This is the basis of appraisal for all our financing discussions and not the current value of our shares."

Dasa is fully permitted for development, with off-take agreements in place for a majority of its first phase of production. Detailed engineering is advancing in parallel with initial on-site earthworks and infrastructure development. Global Atomic's management team has proven its ability to advance the project despite challenging market conditions, creating a compelling opportunity as the company enters the final stretch towards production.

Premier American Uranium

Premier American Uranium has made strategic moves recently to accelerate the advancement of its Cebolleta Project in New Mexico. By leveraging existing data from a recently acquired area adjacent to their current resource which is host to historical uranium mining activities, the company expects to significantly upgrade the project resource estimate through data review and incorporation as opposed to allocating riskier capital to drilling.

Moving forward concurrently with the resource update, Premier has engaged SLR International Corporation to complete a Preliminary Economic Assessment on the project. In doing so, Premier seeks to highlight and quantify what it views as the embedded value associated with the project through its strategic location in the Grants Mineral Belt of New Mexico along trend from prolific past producing assets. Premier appears well positioned to continue building out the value proposition of the Cebolleta Project in a rapid and efficient manner.

Caudron Energy

Cauldron Energy's recent exploration activities at its Yanrey Uranium Project in Western Australia have yielded promising results, aligning with the bullish sentiment surrounding the uranium sector. The company's 2024 drilling campaign at the Manyingee South prospect has defined near-surface uranium mineralization extending over 3 kilometers in length, with several high-grade zones identified.

Cauldron also completed additional drilling at its Bennet Well deposit, returning an impressive intercept of 2.10m @ 1,742 ppm U₃O₈. The company believes there is potential for further high-grade mineralization in untested areas east and northeast of the current drilling. With a strong cash position of $1.357 million at the end of December 2024 and the potential for additional funding, Cauldron is well-positioned to continue advancing its Yanrey Project. The company's exploration success and the project's location in a region known for large, high-grade uranium deposits make Cauldron an attractive opportunity for investors looking to gain exposure to the strengthening uranium market.

The Investment Thesis for Uranium

• Spot uranium prices are projected to rise to $90-100/lb to incentivize new production due to higher costs and ESG considerations
• Demand is accelerating from nuclear reactor restarts, life extensions, and new builds globally as countries seek reliable clean energy
• Supply is constrained due to a lack of investment in new mines over the past decade, creating an impending structural deficit
• Utilities are returning to the market to secure supply, focusing on fixed price contracts in the $60s-$80s/lb
• Producers with established, low-cost assets like Ur-Energy and near-term developers like Lotus Resources are well-positioned
• Exploration upside remains in the Athabasca Basin, with recent discoveries by F3 Uranium highlighting the potential for high-grade deposits
• Investors should be selective and build a diversified portfolio across producers, developers and explorers, focusing on management and asset quality
• Be prepared for continued volatility but position for the long-term fundamentals of rising demand colliding with constrained supply
• Risks include policy changes, technical setbacks, rising costs, and continued secondary supply weighing on prices in the near-term

The uranium market is poised for a sustained period of rising prices as growing demand from the global nuclear energy build-out collides with constrained supply. After a decade of underinvestment, the next generation of uranium mines is only beginning to advance, setting the stage for an acute supply deficit later this decade.

While near-term volatility is likely to remain elevated, the long-term fundamentals are compelling. Investors should take a selective approach to the sector, backing experienced management teams with high-quality assets across the different stages of development. Strong balance sheets and established offtake agreements are increasingly important as contracting accelerates.

For patient investors, the uranium sector offers significant upside potential as the imbalance between accelerating demand and limited supply growth drives the market into a structural deficit. With the price required to incentivize new production in the $90-100/lb range, current uranium prices in the $60s/lb appear unsustainably low. As the global energy transition gains momentum, uranium is positioned to play a central role, creating a generational opportunity for investors.