Uranium’s Bull Market Has Barely Begun

February 27, 2023

Uranium investments topped the list of exciting takeaways from the Mines & Money conference held in Miami last week. Keynote speaker Chris Temple, editor of The National Investor, dispelled nagging doubts about atomic power’s future when he noted that Greta ‘How-dare-you!’ Thunberg has been distancing herself from fellow activists who remain vociferously opposed to nuclear energy. She may be an insufferable scold, but there is no denying that she is also a top global influencer of environmentalists. Try Googling just ‘Greta’ if you need to be convinced; it is not fellow Swede Garbo whose biography pops up.

Thunberg has very publicly urged Germany not to decommission its few remaining reactors this year as planned. She is hardly alone in having recognized belatedly that nuclear power is the only economically viable alternative to carbon-based fuels. With the Fukushima disaster of 2011 receding from memory, Japan and South Korea have finally seen the light, joining the U.S, U.K., Belgium, Finland, Poland, Czech Republic, Romania and others in their growing appetite for reactor-based power.

Two Growth Pathways

Look for the nuclear industry’s growth to unfold mainly along two pathways created by 1) burgeoning demand from industrialized nations for large power stations in the 1000-gigawatt category; and 2) correspondingly robust demand from hundreds of cities and communities for small, modular N-plants that can recycle radioactive fuel pellets.

John Borchoff,  managing director of a company called Deep Yellow [OTC: DYLLD] that is focused on Namibian ore, sees his firm as particularly well positioned to benefit from these trends. As demand for uranium grows, he says, buyers will seek out the biggest, most reliable producers to meet their needs. Smaller miners will get bought up by the relative handful of companies capable of delivering at least two million pounds of uranium per year. Deep Yellow is poised to join that list, says Borchoff.

A Miscalculation

The uranium story is no longer hot news, to be sure. Stocks in the sector bottomed early in 2020, and some have more than quadrupled since. Even so, the next wave of share-price appreciation has spectacular potential, Borchoff asserts, because so many utility companies still think plentiful supplies of uranium are assured. This misperception is logical, given that the number of operable N-plants in the U.S. has been falling for more than 30 years. Also, there appears to be enough unmined uranium to meet the world’s energy needs for the foreseeable future. But with the very large increase in demand that is coming shortly, the infrastructure needed to get it out of the ground and shipped to users has yet to be built.

That is why uranium promises to be the among the most rewarding investment categories over the next 20 years.  Don’t wait to get aboard, since share prices are likely to launch anew when it appears Germany is about to take Thunberg’s advice.

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