Uranium Update – Factors Aligned – Waiting for the Bull Market to Gain Momentum
We believe a Uranium Bull market is coming and now is the opportunity to get a starter position. As we discussed in our last report, the fundamentals remain in place for a new uranium bull market, with the last potential policy hurdle to long-term contracting now complete (Russian Suspension Agreement). We highlight that while utilities have been conspicuously absent from the market (both spot and long-term), the two largest producers in the world have been active buyers in the spot market to secure supply. Looking at history, the factors are in place for a 2006-like run in uranium and we believe that once long-term contracting starts, the uranium price and equities should move. With the potential for 2006-like returns, investors only need a toehold position to realize outsized returns and can easily build one with the currently depressed equity valuations.