Raymond James Analyst’s Four Top Picks for the Coming Uranium Upswing

The Energy Report: David, the price of uranium has been volatile recently. What’s behind that?

David Sadowski: Spot prices ran in late 2014, touching $44/pound ($44/lb) as a handful of utilities entered the market, either expressing buying interest or buying material outright. At the time, supplies available to the market for spot delivery were quite thin, leading to upward pressure on prices.

But the price ran pretty quickly, and as the calendar and financial end-of-year approached, we saw a big drop-off in volume as buyers retreated to the sidelines. The timing caused the price to move around drastically. This type of thing isn’t entirely unusual, if you pull up a 10-year price chart. Right now, the spot price is about $37/lb, and the long-term contract price, which has been a lot less volatile, is $49–50/lb.

TER: Do the sanctions on Russia have any effect on the price?

DS: Right now I would say no, but they could. Russia controls a huge chunk of global uranium supply. Not all of it leaves the country, because Russia has a decent-size, 25 gigawatt (25 GW) domestic nuclear fleet. That’s about 7% of global operating capacity. But a lot of that material does get exported both to other countries and to client states, where Russia has constructed reactors and is under contract to supply fuel for the life of a unit under the build/own/operate model.

“We see a very high takeout potential; that’s one of the key reasons we rate Fission Uranium Corp. a top pick.”

Quantifying the uranium supply from Russia, we estimate about 8 million pounds per year (8 Mlb/year) is mined annually within Russia, 60 Mlb is mined in Kazakhstan, which has very close ties to Russia, and the country has another 15–20 Mlb from underfeeding and coming …read more

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