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Uranium Prices Soar to 16-Year High as Supply Shortage Fuels Rally

Uranium Price Update & Sector Commentary: Close of November 15th, 2023

Uranium prices have been on a tear this week, breaking through the $80 per pound mark for the first time since 2008. That’s a whopping 16 years ago! This means that sellers are in the driver’s seat, and any sales are pushing prices even higher. And it doesn’t look like this trend is going to change anytime soon.

Why are uranium prices going up?

There are two main reasons for the uranium price surge:

  • Supply is tight. There’s not enough uranium to meet the growing demand.
  • Demand is strong. More and more countries are turning to nuclear power as a clean and reliable energy source.

What does this mean for the nuclear industry?

The future of nuclear power is looking bright. With strong demand and limited supply, uranium prices are likely to keep rising. This is good news for the nuclear industry, which is poised for a comeback.

Here are some of the latest developments in the nuclear industry:

  • The European Parliament voted to include nuclear power in the EU’s Net-Zero Industry Act. This means that nuclear power will be seen as a key part of the EU’s plan to reach net-zero emissions by 2050.
  • France is considering adding eight more nuclear reactors to its grid. This would be a major boost for the nuclear industry.

Overall, the nuclear industry is in a strong position. With uranium prices on the rise and governments around the world supporting nuclear power, the future looks bright for this industry.

Uranium required and cost to make 1kg of EUP (4.5% U235): Mine/plant output of 26.7 lb U3O8 ($2,163 cost) -> Conversion to UF6 ($419 cost) -> delivers 10.22 kgU as UF6 ($2,582 cumulative cost) -> enrichment: 6.23 SWU ($947 cost) -> delivers 1kg EUP ($3,529 cumulative cost). (US$, spot U3O8, tails assay of 0.30% U235)

Uranium Equities - News

Basin Uranium (NCLR-CSE, not rated): Increases size of Chord uranium project, South Dakota adding 640 acres of contiguous land. – link to Nov. 22nd

Cosa Resources (COSA-V, not rated): Announced receipt of exploration permits for its Ursa uranium project, Athabasca Basin, Saskatchewanlink to Nov. 21st

Purepoint Uranium (PTU-V, not rated): Announced its 2024 exploration plan forthe Smart Lake JV (27% PTU, 73% CCO)link to Nov. 21st

Standard Uranium (STND-V, not rated): Announces filing of NI 43-101 tech report onits Sun Dog uranium project, Athabasca Basin, Saskatchewanlink to Nov. 20th

enCore Energy (EU-US, EU-V, Rating: Buy, Target: US$5.00): Updates on Alta Mesasite preparations for return to production in 2034Haywood Research Nov. 20th

F3 Uranium (FUU-V, not rated): F3 receives $8.2M from the exercise of warrants;proceeds to fund future exploration work link to Nov. 17th

Uranium Sector - Supply / Demand Model & Uranium Price History & Forecast (annual average)

Uranium Sector Comps with 1-Week Performance Data

Uranium Equities βeta to Uranium price, plus βequity/uranium/σequity

Uranium Comps Performance

Uranium Fuel Cycle Price Relationships

The charts below show that the price of uranium products (U3O8, UF6 and EUP) are tightly correlated (monthly %∆) in the long term (RHS

Figures 9,10). On the lower left chart of each Figure, we see that the cost of fuel services exhibits a much lower correlation with the monthly

change in uranium product (Conversion to UF6 [R2=0.04] or SWU to EUP [R2=0.25]), owing to the fact that the uranium embedded in the

product dominates value. Historically, conversion costs have made up an average of 10.5% of the cost of UF6 (currently 16.2%), and SWU costs

have made up an average of 26% of the price of EUP (currently 26.8%) (conversely, UF6 historically makes up 74% of the cost of EUP).

U3O8 – Conversion – UF6 Monthly Performance Correlations 2008 to October 31st, 2023 (at UxC spot prices)

U3O8 – SWU – EUP Monthly Performance Correlations – 2015 to October 31st, 2023 (at UxC spot prices)

Historic Average In-Situ Valuations at a range of Uranium Spot Prices – 2008 to Present

Price Chart, Rating and Target Price History (as of November 23, 2023)

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