Uranium Execs Talk High Prices, Tout Projects As Long Downturn Comes To An End: 'The US Government Will Be Buying'

TORONTO—Two trends are converging to put North American uranium miners in a sweet spot.

The first is the push from United States politicians to loosen America's dependency on uranium from Russia after it invaded Ukraine. The second is the renaissance the nuclear industry is experiencing amid the push to decarbonize electricity generation. That all comes against a backdrop of underinvestment among uranium producers for years, as nuclear power fell out of favor after a power plant disaster in Japan.

Even with a recent pullback from a 16-year high hit earlier this year, uranium prices are still nearly three times what they were three years ago.

Uranium is an environmentally friendly source of electricity as the world shifts to electric vehicles, the electrification of many industries and emerging artificial intelligence applications, Patricia Mohr, commodity market specialist with Mohr & Co. Critical Metals Inc. said during a Benzinga virtual event Tuesday.

"Nuclear is a very good option," she said.

In response to expected demand, uranium miners including Energy Fuels Inc. (NYSEAMERICAN: UUUU), Denison Mines Corp. (NYSEAMERICAN: DNN), Uranium Energy Corp. (NYSEAMERICAN: UEC), Ur-Energy Inc. (NYSEAMERICAN: URG) and IsoEnergy Ltd. (OTC:ISENF) are ramping up production capacity.

Also read: Ur-Energy To Develop Wyoming Uranium Mine As Prices Soar, Sales Contracts Grow

While the announcements may put a damper on near-term uranium pricing, many producers will still be able to benefit from selling more volumes, Mohr said.

With those tailwinds, which have helped push uranium prices sharply higher, uranium producers gathered in Toronto last month during the Prospectors & Developers Association of Canada conference and trade show to talk about their projects and outlook for the radioactive metal. 

Global Atomic Corp. (OTC:GLATF)

One of the factors helping keep uranium prices elevated is a worry that there isn't enough long-term supply out there to meet future demand.

"Exploring, finding and developing uranium projects takes a long time," Stephen Roman, CEO of Toronto-based Global Atomic, said during a presentation at the trade show.

The company is working to advance its Dasa project in the African nation of Niger, which according to the World Nuclear Association has the highest-grade uranium ores of any African country and supplies about 5% of the world's mined output of the metal.

"This is one of the top projects in Africa," Roman said.

The deposit, which is located about 65 miles southeast of the mining town of Arlit, is in an area that has been producing uranium for more than half a century.

"All the infrastructure is there, the power the water, etc.," Roman said. "This mine will be very profitable. This is going to be a mine that is going to run for 40 years or more."

Global Atomic expects its Dasa mine to be completed by June and has offtake agreements in place, including one with a large European utility, he said. 

Energy Fuels Inc. (NYSEAMERICAN: UUUU)

Through March, this Colorado-based company sold 300,000 pounds of uranium, and it is restarting mines that were shuttered during times of lower uranium prices.

"We're back in mining mode," CEO Mark Chalmers said in his presentation.

After the company mines the ore, it will stockpile it at its mill in Utah, but the question remains open when it will start processing that ore. 

Energy Fuels has also been diversifying into vanadium, which is used in the steel industry, and rare earths element production. The United States has designated vanadium and rare earth elements as critical minerals.

“We are creating a profitable, high-margin critical mineral company on the back of the uranium business," Chalmers said. "Uranium will always be our core position."

Uranium Energy Corp. (NYSEAMERICAN: UEC)

This Texas-based company is advancing projects in Canada, Wyoming and Texas. 

CEO Amir Adnani said in his presentation that the company will restart Wyoming production by August.

"We see an incredible opportunity in the U.S. from utility demand," he said. "There's a premium on U.S.-origin uranium," he said. "The U.S. government will be buying uranium."

enCore Energy Corp. (NASDAQ:EU)

This Texas-based uranium company in early March announced the first shipment from its restarted Rosita plant in South Texas and a fifth long-term supply contract. 

The company has sales contracts with four U.S. utilities for 4.25 million pounds of uranium through 2032, but according to executive chairman William Sheriff in his presentation, this only represents about 30% of its planned production over that time. 

The company is working on restarting its Alta Mesa processing plant, also in South Texas, by the second quarter of this year.

"We’re quite bullish over the next few decades," Sheriff said.

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Image generated using artificial intelligence via Midjourney.