Buying Shares In Uranium Mining Stocks Is An Easy Call Right Now
With the spot price around $49, uranium is only a few dollars away from breaking toward $100.
The pressure is rising fast. Global uranium supply is being squeezed like never before.
The combination of rocketing demand and severe supply chain disruption in the world’s top producing countries is…
The Perfect Storm Uranium Investors Have Been Waiting For
Even before Kazakhstan erupted in political violence, disrupting 41% of global production, uranium demand was outpacing supply.
The drive for clean energy is increasingly focused on nuclear power and its essential fuel, uranium.
“The key to a green future” 1
“This century’s greenest metal” 2
“Fuel for the 21st Century” 3
But just as uranium demand is beginning its surge, the most severe supply disruption to ever hit the yellow metal is roiling markets.
More Than Half of Global Uranium Supply Under Severe Threat
Major supply disruptions from Central Asia and Eastern Europe, with more than half the world’s annual production, are sending nuclear power operators on a frenzied hunt to lock in new sources.
Producers with a focus on Russia, Kazakhstan, and Ukraine are in freefall
- The colossal Kazakhstan state-owned mining company Kazatomprom, the world’s top uranium producer, has lost a whopping 44% of its total value in a few short months.
- In November 2021, political violence inflamed Kazakhstan, the world’s biggest producer and home to 41% of global uranium supplies.4
Investors fled the market, concluding the country was no longer a safe and stable destination for Western capital.
Now the Russian invasion of Ukraine threatens to disrupt supply from the world’s ninth-largest producer.5
Russian President Vladimir Putin is aiming for the same strategic prize that launched Hitler’s attack on Ukraine in World War Two.6
- Greater Ukraine leads Europe in proven recoverable reserves of uranium ores, ranking seventh in the world overall.7
- Russia gets 21% of its electricity from nuclear-powered plants, and is quickly expanding its nuclear reliance.8
- The country produces about 2,846 tonnes of the yellow metal per year.9
- Yet that number is only about half of its annual requirement of 5,500 tonnes per year, according to the non-profit World Nuclear Association.10
Russia is on a quest to control the world’s uranium, starting with the resources right outside its back door.
And that is setting up a once-in-a-lifetime opportunity as the Western world scrambles to lock in alternate supply.
Junior Explorers And Developers Are Seeing The Uranium Market’s Greatest Opportunity Ever
You can see it already forming. The most well-known Western producers are skyrocketing.
- Uranium Energy Corp (UEC) is up an incredible 69% since January 27
- Ur-Energy (URG) is on a tear, up 46% in the same time
- Denison Mines (DNN) is right behind, soaring 43%
- Cameco (CCJ) has jumped 37% so far
But that’s just the beginning.
The Biggest Opportunities Are In Lesser-Known Juniors That Are Creating New Supply
Because they’re the ones the world must rely on to make up a vast and growing supply deficit as the world turns once again to nuclear power.
Especially juniors like Basin Uranium (CNSX: NCLR), a Canadian junior that has locked in a project at the heart of one of the world’s highest grade uranium deposits.
Tiny Canadian Explorer/Developer Could Ride a 10-year Uranium Bull Market
Basin Uranium has landed a project in the Athabasca Basin, a region universally regarded as the top source for high-grade uranium in the world.
And they’ve already signed an agreement with another up and coming uranium explorer, Skyharbour Resources, for one of the most exciting new sites in the area.
Past exploration on the property has been highly promising, suggesting this stock could be primed to deliver big time in the coming year.
With the economic, social and regulatory stars aligning, now is the time to get in on the ground floor for what we think could be the biggest uranium bull run in history. But if you want to get in on the act, you’ll have to act fast.
Uranium Prices Have Already Soared 69% In 18 Months
From September through November, the market went on a remarkable run which saw spot prices climb to their highest level in almost a decade.
But this is just the pre-game show. The real fireworks are expected to begin later in the year, with clean energy initiatives firmly taking root.
As things stand, the current uranium spot price ranges from $45-46 per pound of U308, representing a dramatic leap of more than 70% in the last 18 months.
All of which has motivated investors and hedge funds to rush into uranium stocks, accelerating prices even higher. Over just the last year:
- Denison Mines (NYSE:DNN) soared 118%
- Western Uranium & Vanadium Corp. (CSE: WUC | OTCQX: WSTRF) shot up 112%.
- Energy Fuels (NYSE:UUUU) skyrocketed 109%
- Cameco (NYSE:CCJ) climbed 77%
To many, uranium’s resurgence has been sudden. For the past decade, uranium stocks have been in the doldrums.
But things look very different today. First, safety standards have changed dramatically in recent years. Technology has evolved and safety standards have been overhauled. Today’s nuclear power is safe, reliable, consistent, and clean.11
This brings us to the second point: The drive towards net zero requires nuclear power.
Renewable energies such as wind, solar and hydro can all play a part, but these are “swing” power sources, meaning they are dependent on weather conditions, and are far from capable of providing the capacity or consistency of power the world needs in their current state.
Uranium on the other hand is a “base load” power source. The unavoidable truth is, if the world is to transition beyond fossil fuels, it needs nuclear.
For the First Time in History, Political Agendas Align
The current administration has enthusiastically supported nuclear as a means of achieving both climate and energy plans.
Congress passed the Nuclear Energy Innovation and Modernization Act (NEIMA) in 2018 which encourages public/private partnerships to accelerate innovation in nuclear energy.
Even Republicans are pitching nuclear energy as a way forward for cleaner energy.12 Texas Governor Gregg Abbott has called on regulators to build more nuclear energy plants, upgrade existing plants, and penalize renewables.13
Figures from across the political spectrum, like Bill Gates and Elon Musk have voiced their support.
For Elon Musk, the movement to rid the world of nuclear is misguided. “We should add more nuclear energy, or at least not shut down the nuclear power plants that we already have,” he said.14
Bill Gates, meanwhile, is betting on nuclear power big time. His company, TerraPower, was selected to be part of the government’s Advanced Reactor Demonstration Program (ARDP), and aims to build a fully functional nuclear power reactor within seven years.15
While nuclear power currently only accounts for 20 percent of total US electricity generation, the $1 Trillion infrastructure bill earmarked $73 billion for the expansion of nuclear power.16
New plants are being planned and uranium exploration activities are ramping up to record levels.17
Sprott’s 41.3 Million lb. Uranium Purchase Adds Fuel To The Fire
Even the big-time mining magnates are taking notice of the money pouring into this sector.
The arrival of the Canadian-listed Sprott Physical Uranium Trust is one of the biggest game-changers. Having raised almost $1 billion dollars so far with the potential for significantly more through a US$3.5 billion at-the-market offering, they set out on a buying spree of epic proportions, snapping up 41.3 million lbs. of uranium.18
In short, demand is surging and supply is struggling to keep up.
Nations Compete for a Limited Supply of Uranium
It’s not only the US that is betting big on uranium:
- China is relying on a $440 billion nuclear buildout to help it meet its climate goals.19
- France is building new nuclear reactors with President Macron putting nuclear power at the heart of its 2030 plan for reindustrialization.20
- Russia has ambitious plans, including the world’s first floating nuclear power plant in Siberia.21
The narrative couldn’t be clearer. Small wonder that the people at Basin Uranium Corporation (CNSX: NCLR), sitting on a highly prospective land package in the middle of one of the richest uranium regions in the world, are so excited.
“Grade-A” Uranium At The Mann Lake Project
With its own capacity for uranium production limited, the US has begun looking to its nearby friends. Thankfully its northern neighbour has the leading source of high-grade uranium in the world.
That’s why all eyes are turning to the Athabasca Basin in Northern Saskatchewan and Alberta. Grades are as much as 20 times higher here than anywhere else in the world.22 What’s more, with 606,600 tonnes of known reserves, this region currently supplies 15% of the world’s uranium.23
Basin Uranium has partnered with Skyharbour Resources to earn in on one of the most promising land packages in the area, Mann Lake.
This 3,472-hectare project boasts a highly strategic location, sandwiched between the McArthur River mine 25km to the northeast (host to 273.6 million lbs in proven and probable reserves), and Cameco’s Millennium uranium deposit 15 km to the southwest (host to 75.9 million lbs in proven and probable reserves).
To date this project has seen over $3 million in past exploration. In 2014, they carried out a ground-based EM survey focused on a zone where a favourable 2km long aeromagnetic low coincides with possible basement conductor trends.
Current targets focus on the main NE trending conductive corridors appear to concentrate uranium as shown at Mann Lake to the East. It is these kinds of basement corridors where significant concentrations of uranium are typically found. Drilling will follow on these targets in the near term.
Mann Lake looks set to propel this relatively small exploration company into the big leagues. They believe that 2022 will be the year when the magic happens as the company will aggressively focus on exploration and development of its prime real estate in the Athabasca Basin.
So What Does It All Mean?
Basin Uranium Corporation (CNSX: NCLR) is in a sweet spot for investors. It has a ready market with the US and other countries looking to ramp up uranium production, and it benefits from a highly experienced team with a track record of building successful companies.
At the same time, with exploration still in its beginning stages, Basin Uranium has yet to attract the same level of speculation we’ve seen with other stocks in the same market. But as has happened many times before, once junior mining companies prove out resources, things tend to move very quickly.
You can find out more about Basin Uranium via their website. Once you’ve completed your due diligence, call your broker and put Basin Uranium Corporation (CNSX: NCLR) at the top of your watchlist.
1.https://time.com/6117041/nuclear-energy-reactors-green/ 2.https://www.mining.com/uranium-snapshot-eight-juniors-of-interest/ 3.https://geology.utah.gov/map-pub/survey-notes/energy-news/energy-news-uranium-fuel-for-the-21st-century/ 4.https://www.world-nuclear.org/information-library/nuclear-fuel-cycle/uranium-resources/supply-of-uranium.aspx 5.Ibid 6.https://www.jstor.org/stable/43965115 7.https://www.forbes.com/sites/erictegler/2022/02/23/as-russian-forces-roll-into-eastern-ukraine-putin-grabs-yet-another-prizeores-and-energy/ 8.https://cnpp.iaea.org/countryprofiles/Russia/Russia.htm 9.https://world-nuclear.org/information-library/nuclear-fuel-cycle/mining-of-uranium/world-uranium-mining-production.aspx 10.https://world-nuclear.org/information-library/country-profiles/countries-o-s/russia-nuclear-fuel-cycle.aspx 11.Home • Net Zero Needs Nuclear 12.House Republicans pitch nuclear, natural gas as ‘cleaner’ energy future | TheHill 13.Gov. Greg Abbott tells electricity regulators to encourage building more power plants, penalize renewable energy (kristv.com) 14.Elon Musk interview with Italian TechWeek https://www.youtube.com/watch?v=4_LAXD-f9e0 15.https://www.cnbc.com/2021/04/08/bill-gates-terrapower-is-building-next-generation-nuclear-power.html 16.Infrastructure bill: $1tn for clean energy, internet, trains and more – BBC News 17.US FY2022 budget request includes record for nuclear energy: Nuclear Policies – World Nuclear News (world-nuclear-news.org) 18.Sprott’s Physical Uranium Trust to Change the Uranium Game | Crux Investor Articles 19.China’s climate goals hinge on a $440bn nuclear buildout – News for the Energy Sector (energyvoice.com) 20.Macron says France will construct new reactors: Nuclear Policies – World Nuclear News (world-nuclear-news.org) 21.World’s first floating nuclear power plant fuels Russia’s Arctic ambitions | Financial Times (ft.com) 22.https://investingnews.com/innspired/uranium-exploration-athabasca-basin-canada/ 23.https://resourceworld.com/how-athabasca-uranium-deposits-were-discovered-from-the-air/
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