NetworkNewsWire Editorial Coverage
NEW YORK, June 24, 2021 /PRNewswire/ -- Every president wants a legacy and President Joe Biden wants to put his stamp on climate change. Only a few months into his term, President Biden has pledged to slash U.S. greenhouse gas emissions by a minimum of 50–52 percent by 2030, an undertaking that doubles the nation's prior promise under the 2015 Paris Climate Agreement. Further out, the target is net zero carbon emissions by 2050. These aggressive goals require immediate action, including addressing the fact that almost 40 percent all carbon dioxide pollution is created by power plants burning fossil fuels. The International Energy Agency (IEA) recently published its comprehensive plan to cap the global temperature rise to 1.5°C by 2050, which includes a combination of wind, solar and nuclear to phase out fossil fuels. Today, the world is at a tipping point for the energy sector, presenting opportunities to capitalize on the epic transformation. In the United States, Uranium Energy Corp. (NYSE American: UEC) (Profile) is a leading player in low-cost and environmentally friendly in-situ recovery (ISR) mining of uranium, the essential element that fuels nuclear energy. There are also investing strategies directed at the electric vehicle market, including Blink Charging (NASDAQ: BLNK) and top solar companies like Canadian Solar (NASDAQ: CSIQ) or more diversified approaches, such as The Global X Uranium ETF (NYSE: URA) and Energy Select Sector SPDR Fund (NYSE: XLE).
- Research indicates that more than 20% of all energy worldwide could come from nuclear by 2050.
- Texas-based UEC is a pure-play American uranium company.
- UEC has the largest resource base of fully permitted ISR projects of any U.S. based producer
- UEC also owns or has contracted for 2.305 million pounds of U.S. warehoused uranium; also has a large stake in Uranium Royalty Corp.
IEA Game Plan Shows Goals Achievable with Nuclear, Renewables
While it's certainly a challenging task to reshape the entire energy industry, the IEA sees a clear pathway to attaining the global goal of net zero emissions by prioritizing events to diminish reliance on fossil fuels. In the next three decades, the world's population will approach 10 billion people. This will require setting new standards for decarbonization and implementing actions through concerted efforts among countries investment and energy policies.
The IEA strategy envisions about 70% of the world's electricity coming from renewable sources such as solar and wind by 2050. Nuclear energy could contribute more than 20% by mid-century. Nuclear is critical to infrastructure for the global fleet of electric vehicles, which are expected to spike from about 8.5 million cars on the road in 2020 to 116 million by 2030. To keep up with charging demand, the World Nuclear Association sees the need for 25 additional nuclear reactors exclusively for the boom in EVs.
A Spate of Diversified Uranium Assets
With the writing on the wall, interest in uranium has understandably risen, and shares of Uranium Energy Corp. (NYSE American: UEC) have garnered attention. Texas-based UEC stands out as a pure-play American uranium company that includes a portfolio of near-production ISR projects and hub-and-spoke operations anchored by its fully licensed Hobson Processing Facility in Texas. The portfolio also contains Reno Creek, the U.S.'s biggest permitted, preconstruction ISR uranium project and a pipeline of resource-stage uranium project across Arizona, New Mexico, Colorado and Paraguay.
Further, UEC owns a large equity position in Uranium Royalty Corp. and a growing inventory of physical uranium warehoused in America that it is stockpiling at low prices for what is expected to be strong future demand. In the heart of South America, UEC's Alto Parana project in Paraguay is considered one of the highest-grade and largest ferro-titanium deposits in the world.
Savvy Spending to Build Value
Uranium Energy holds 15 million shares of Uranium Royalty Corp., the only public uranium royalty company. Uranium Royalty trades on both the NASDAQ and TSX-Venture exchanges, with its market capitalization currently around C$250 million, based upon QuoteMedia data and a stock price of C$3.19. UEC was in on the company early and has an average cost basis of just C$1.09 per share.
As for its physical uranium initiative, UEC reported owning or having contracts with delivery dates out to June 2023 for 2.305 million pounds of uranium at the end of the most recent completed quarter, ended April 30, 2021. Management estimates the current inventory in UEC's possession to be valued at approximately $26.2 million. Even assuming no appreciation in uranium pricing, the complete inventory once all delivery is taken will be approaching $50 million. In the quarterly report disclosing this information, the company stated that the total of its cash on hand, equity in Uranium Royalty and physical uranium position was worth about $123.4 million at the end of April.
UEC: Ahead of the Emerging U.S. Market
The United States is set up to be a thriving uranium market. Uranium is well documented to be safe and reliable nuclear energy feedstock. Nuclear energy already is the largest source of carbon-free power generation in the U.S. and the second biggest source of electricity in the country, period. No other country in the world has more nuclear reactors operating than the United States.
Almost amazingly, however, the U.S. has effectively no domestic uranium production today. Almost all of the country's supply is imported or coming from inventory. State-owned enterprises in the former Soviet Union countries, including Russia, are flooding the market with cheap uranium and distorting global markets. China is also making inroads into the U.S. market with uranium that free market companies cannot compete with.
The U.S. government has recognized the threat to American energy and national security and addressed the problem in a Department of Energy report: Restoring America's Competitive Nuclear Energy Advantage. The result will be implementation of a Strategic Uranium Reserve program that was recently passed by Congress to stimulate growth in the domestic uranium mining industry.
When that faucet is turned on, UEC will be instrumental with its fully permitted, near-production projects (Palangana, Goliad, Burke Hollow and Reno Creek) that host 32.6 million pounds in the Measured and Indicated category and 11 million pounds in the Inferred category. UEC has the largest resource base of fully permitted ISR projects of any U.S. based producer. It bears repeating that these are ISR projects, widely recognized to be less expensive to operate and environmentally friendly, qualities that make them quite attractive compared to hard-rock mining.
This goes without mentioning the integrated nature of UEC with its permitted, state-of-the-art Hobson Processing facility that has capacity of 2 million pounds per annum. In total, UEC has a production profile of 4 million pounds of production annually.
Looking Beyond Uranium
With its infrastructure and assets, UEC is in an enviable position when it comes to uranium miners in the U.S. That said, there are a number of other companies that have emerged as leaders in clean energy areas that are positioned to capitalize on the global goal of drastically reducing carbon emissions.
Blink Charging (NASDAQ: BLNK) is a leading owner, operator and provider of electric vehicle (EV) charging equipment and networked EV charging services. Blink has thousands of EV chargers deployed across the U.S. at an impressive array of locations and also has a proprietary cloud-based software that operates, maintains, and tracks all the Blink EV charging stations and the associated charging data; EV charging equipment; and EV-related services. This month, Blink deployed 10 IQ 200 2 EV charging stations at three locations of AtlantiCare Integrated Healthcare System, the largest healthcare organization in Southern New Jersey, representing the first into the AtlantiCare ecosystem.
Canadian Solar (NASDAQ: CSIQ) has been around for 20 years, growing into one of the world's largest solar technology and renewable energy companies in that time. A leading manufacturer of solar photovoltaic (PV) modules, provider of solar energy and battery storage solutions, and developer of utility-scale solar power and battery storage projects, Canadian Solar has successfully delivered over 55 GW of premium-quality, solar PV modules to customers in over 150 countries. During Q1 2021, the company shipped 3.1 GW of solar PV modules, helping revenue to surge 32% year-over-year to $1.1 billion.
The Global X Uranium ETF (NYSE: URA) provides investors access to a broad range of companies involved in uranium mining and the production of nuclear components, including those in extraction, refining, exploration, or manufacturing of equipment for the uranium and nuclear industries. As of June 21, 2021, the fund has 38 holdings spanning 10 countries with net assets of $741.5 million. The fund also provides research, such as insights on why the uranium market is "primed for growth."
Energy Select Sector SPDR Fund (NYSE: XLE) is the oldest exchange-traded fund focused on the energy business. It is also currently the largest energy ETF with approximately $25 billion in assets under management. The fund seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the Energy Select Sector Index. Under normal market conditions, the fund generally invests substantially all, but at least 95%, of its total assets in the securities comprising the Index.
Leaders worldwide know that changes have to be made to fight climate change. Up until now it has been a bit of a slow roll, though. With 2030 and 2050 right around the corner, the pace has to be accelerated starting right now and the IEA nailed it by calling for the redirection of investment capital away from fossil fuels and into greener technologies. It appears that leaders everywhere recognize that it is time to act — and act swiftly.
For more information about Uranium Energy Corp (NYSE American: UEC), please visit Uranium Energy Corp.
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