URNM - Uranium Update: Opportunities On The Right Side Of The Risk Curve
2024-07-15 10:16:40 ET
Summary
- The current correction in the uranium sector provides a compelling opportunity to accumulate a position.
- Fundamentally, the supply increases over the next two years are insufficient to meet the emerging demand.
- In particular, Kazatomprom is struggling to increase production, while geopolitical tensions are causing additional arbitrary tightening.
- In a maturing bull market, junior miners far out on the risk curve typically outperform larger miners, which in turn outperform the metal.
Uranium Recap
Since my last article on the uranium sector on January 22nd of this year, the price of U3O8 has fallen significantly. From peaking at over $100 per pound in late January, the spot price of U3O8 has fallen ~20% to $84 per pound. Year-to-date U3O8 is down roughly 8 %. Naturally, Yellow Cake plc (YLLXF) and the Sprott Physical Uranium Trust (SRUUF) have also fallen in price, as they are the only investment vehicles for retail investors to gain exposure to the spot price of uranium. However, they did outperform the spot price by ~ 5% YTD because the discount to net asset value has narrowed due to positive investor sentiment....
Uranium Update: Opportunities On The Right Side Of The Risk Curve