Value of Uranium Rising as Demand Grows for Nuclear Energy Generation Around the Globe
PALM BEACH, Fla., May 17, 2022 /PRNewswire/ -- FinancialNewsMedia.com News Commentary - It is no surprise that most experts expect the price of uranium to increase in this year of turmoil around the globe, as sure as gold will rise. Uranium is one of the few commodities that has seen two years of solid gains in the midst of the coronavirus pandemic, which most analysts believe indicates that the metal's price is not dropping any time soon. However, on the supply side, current supply of the metal cannot meet demand. It is expected that constrained supply will push the price of uranium even higher this year. An article in Mining News Wire said that last year, the price of uranium rose by 45%, going from about $29 per pound at the start of the year to $50 per pound in September. This increase followed growth in 2020, which saw uranium go from $24 in January to $30 by year's end. Despite not being able to maintain that $50 level, the value of the energy fuel has remained at about $40 since then. The article added: "IndependentSepculator.com CEO and founder Lobo Tiggre stated in an interview that unlike the 2007 uranium price surge, which saw uranium hit $139 from $45 in a single year, the current surge in price would be affected by a number of factors. Tiggre, who expects uranium to settle between $60 and $70 this year, explained that in 2007, no companies and funds were voluntarily holding back cheap supply and sitting on significant amounts of uranium. Now, however, he noted that the presence of funds such as ANU Energy OEIC and the Sprott Physical Uranium Trust, which has bought more than $1 billion of uranium since last year, could serve as a price headwind or a catalyst. The ANU Energy OEIC is a physical uranium fund that was launched last year by Kazatomprom, Kazakhstan's primary uranium producer." Active mining companies in the markets this week include Traction Uranium Corp. (OTCQB: TRCTF) (CSE: TRAC), Uranium Energy Corp (NYSE: UEC), Cameco (NYSE: CCJ) (TSX: CCO), Energy Fuels Inc. (NYSE: UUUU) (TSX: EFR), Denison Mines Corp. (NYSE: DNN) (TSX: DML).
Mining News continued: "Nuclear Energy Institute VP of public affairs and policy development John Kotek stated that nuclear was the second biggest source of carbon-free electricity, making up 10% of total electricity produced around the globe. Kotek explained that while this figure wouldn't change significantly in the short term, the interest in new nuclear constructions combined with decarbonization efforts increased expectations that nuclear's share would grow in the long term. This outlook is backed by the increase in demand for clean energy, particularly the need for carbon-free power. An analysis conducted by the International Energy Agency, the Organization for Economic Co-operation and Development, the International Atomic Energy Agency and other organizations also found that global nuclear generation capacity will have risen substantially by 2050, which supports Kotek's expectation. This increase will be facilitated by the coming online of new reactors, which will join the already operating global fleet. Needless to say, the increased nuclear energy generation capacity around the world will have a beneficial effect upon the value uranium extraction companies…"
Traction Uranium Corp. (OTCQB: TRCTF) (CSE: TRAC) BREAKING NEWS: Traction Uranium announces mobilization of drill rig to Lazy Edward Bay property and commencement of 2022 summer drilling program - Traction Uranium Corp. (the "Company" or "Traction"), a mineral exploration issuer focusing on the development of discovery prospects in Canada, including its two flagship uranium projects in the world-renowned Athabasca Region, is pleased to announce that mobilization is underway for the Lazy Edward Bay summer drilling program. Located near the southern edge of the Athabasca Basin, the targets are at relatively shallow depths, with the Athabasca sandstone ranging to depths of approximately150 m where present.
Fission 3.0 Corp. ("Fission 3') will conduct the work program in accordance with the terms of the Option Agreement between Traction and Fission 3, whereby Traction can acquire up to a 70% interest in the Lazy Edward Bay property. (see Dec 10, 2021 Traction news release.)
Historic work at Lazy Edward Bay has identified prospective geology with a number of favourable indicators for uranium mineralization. The two main NE -trending conductive corridors on the property are referred to as the western Horse Trend and the eastern Liberty Trend. The western portion of the property captures most of the conductive Horse Trend, along with historic drill holes LE-72 and LE-73 that were drilled by Uranerz Exploration and Mining Limited in the 1980's. Drill hole LE-72 is reported to have intersected strongly altered basement rocks returning up to 170 ppm uranium in a brecciated and sheared basement structure. LE-73 reported strongly bleached and fractured, in part limonitized, sandstone throughout its entire length with entirely clay-filled fault gouges in the lower part of the sandstone with up to 550 ppm boron, underlain by strongly clay altered, faulted and graphitic basement rocks with up to 40 ppm uranium and 420 ppm boron. Claims in the eastern portion of the property cover part of the conductive Liberty Trend, where nearby historic drill hole LE-001 was reported to intersect 224 ppm U3O8 over 0.5 m. Traction summer drilling is planned along section, and along strike from these encouraging historic drilling results.
Lester Esteban, Chief Executive Officer, stated "We are really looking forward to ground delivering on our $1.5M program at Lazy Edward Bay. Past historical drill work returned many geological anomalies such as elevated levels of uranium and boron along with strongly altered basement rocks which represent a number of favorable indicators for uranium mineralization. The program is helicopter supported and plenty of pre-planning work was needed to be done ahead of mobilization. I commend our team in getting everything in place ahead of time and on schedule for our maiden drill program at Lazy Edward Bay." CONTINUED… Read this full press release and more news for Traction Uranium at: https://www.financialnewsmedia.com/news-trac/
Other recent developments in the mining industry of note include:
Uranium Energy Corp (NYSE: UEC) recently reported that it has now secured an additional 400,000 pounds of U.S. warehoused uranium, expanding its physical uranium program to 5 million pounds U3O8, with delivery dates out to December 2025 at a volume weighted average price of ~$38 per pound. UEC's physical uranium program represents an unrealized gain of over $125 million based on the current spot price published by TradeTech on April 19, 2022, at $63.25 per pound U3O8.
Amir Adnani, President and CEO stated: "A year ago, UEC launched a physical uranium portfolio with 500,000 pounds purchased at a uranium cost basis of less than $30 per pound. The Company has grown the size of our inventory over ten-fold to 5 million pounds by making well-timed purchases near cycle lows that allow us to maintain a low-cost portfolio of ~$38/lb with spot uranium now trading at over $63/lb. At a time of heightened geopolitical uncertainty, UEC has the benefit of secure U.S. warehoused physical inventories. We have also staged our deliveries to receive uranium as far out as December 2025, providing a low-cost stream of physical uranium as we enter this uranium bull market that shows a major structural supply deficit exceeding 215 million pounds by 2026."
Cameco (NYSE: CCJ) (TSX: CCO) and Orano Canada Inc. (Orano) have recently reached agreement with Idemitsu Canada Resources Ltd. (Idemitsu) to acquire Idemitsu's 7.875% participating interest in the Cigar Lake Joint Venture. Upon closing, Cameco's ownership stake in the Cigar Lake uranium mine in northern Saskatchewan will increase by 4.522 percentage points to 54.547%, while Orano's share will rise by 3.353 percentage points to 40.453%. TEPCO Resources Inc. retains the remaining 5% interest in the property.
"As the world's largest high-grade uranium mine, Cigar Lake is quite simply one of the best and most prolific uranium producing assets on the planet," said Cameco president and CEO Tim Gitzel. "Cameco is very pleased to increase our ownership stake in this outstanding tier-one operation. As the operator of Cigar Lake since 2002, it's an asset we know incredibly well. It's a proven, permitted and fully licenced mine in a safe and stable jurisdiction that operates with the tremendous participation and support of our neighbouring Indigenous partner communities."
Energy Fuels Inc. (NYSE: UUUU) (TSX: EFR) recently announced that during the week of April 4, the Company's White Mesa Mill located near Blanding, Utah (the "Mill") made three (3) commercial shipments of three (3) critical mineral products. During that week, Energy Fuels shipped:
Natural uranium concentrates ("U3O8") to the Metropolis Works uranium conversion facility in Metropolis, Illinois for conversion into uranium hexafluoride which will be enriched and used as fuel for the production of clean, carbon-free nuclear energy;
Vanadium pentoxide ("V2O5") to the Bear Metallurgical Company in Butler, Pennsylvania for conversion to ferrovanadium ("FeV") which will be sold into the steel and specialty alloys industries; and High-purity mixed rare earth element ("REE") carbonate ("REE Carbonate") to Neo Performance Materials' ("Neo's") Silmet facility in Estonia for separation into advanced REE products. The REE Carbonate had undergone partial separation at the Mill using existing Mill facilities prior to its delivery to Silmet, which is the first commercial-scale REE separation to occur in the U.S. since at least the early-2000's (to the Company's knowledge).
Denison Mines Corp. (NYSE: DNN) (TSX: DML) recently filed its Condensed Consolidated Financial Statements and Management's Discussion & Analysis ('MD&A') for the quarter ended March 31, 2022. Both documents will be available on the Company's website at www.denisonmines.com or on SEDAR (at www.sedar.com) and EDGAR (at www.sec.gov/edgar.shtml). The highlights provided below are derived from these documents and should be read in conjunction with them. The Company's results reflect earnings attributable to Denison shareholders of $0.05 per share for the quarter ended March 31, 2022 – including mark-to-market gains of $47.8 million on the Company's investment in 2.5 million pounds U3O8 of physical uranium holdings. All amounts in this release are in Canadian dollars unless otherwise stated. View PDF
David Cates, President and CEO of Denison commented, "Our results from the first quarter of 2022 reflect further improvements in the uranium market, as well as an active start to the year for the Company's Wheeler River and McClean Lake projects.
The spot price of U3O8 increased by nearly 40% during the first quarter, reflecting the relative scarcity of discretionary uranium holdings available to the spot market amidst an environment of significant geopolitical uncertainty, which drove a substantial increase in the value of Denison's physical uranium holdings and the Company's earnings per share of $0.05. Denison remains committed to holding its physical uranium position for the long-term as both a means to enhance our shareholders' exposure to the uranium market and a tool for the future financing of the development of the Wheeler River project.
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