Uranium price surge: It’s all bull

When mining magnate and billionaire investor Tim Goyder spoke to Mining.com.au at Resources Rising Stars in May 2023 he was clear on his stance regarding uranium.

“I’m a uranium bull,” he had told this news service on the sidelines of the Brisbane event.

At the time, the spot price of uranium had only just trickled over US$50 per pound.

The uranium market by that stage was strengthening during Q2 2023, with the spot price increasing from US$50.35 per pound to US$56.20/lb, peaking at US$57.75/lb.

Then in December 2023, an equally bullish Terra Uranium (ASX:T92) Executive Chairman Andrew Vigar told Mining.com.au that the price of the heavy metal was on its way to again hitting US$100.

When Vigar sat down for a wide-ranging interview at the end of last year, the price was about US$86/lb, which by then was a 56% jump in the spot price year-to-date.

Terra Uranium’s Executive Chairman’s comments have since proven true. 

With only 12 days into 2024, the uranium spot price, according to independent broker Numerco, surged just over US$100/lb, reaching a high not seen for some 16 years. 

No bull, the latest uranium bull run has well and truly begun. 

The road to US$100

While the price today (12 January 2024) has since retreated with Trading Economics reporting it at about US$95, hitting the US$100 mark brings hope to uranium hopefuls and memories of 2007 when it hit an all-time high above $US140/lb.

To put it into perspective, on 29 January 2019 the price of the nuclear energy commodity was a mere US$29/lb, according to Trading Economics. 

According to Sprott ETF Production Manager Jacob White, the strength in the uranium price has improved the revenue and profits for producers and raised the prospects for further mine restarts and new builds.

One such company developing a uranium asset towards production is Aurora Energy Metals (ASX:1AE), which is aiming to unlock the inherent value of its namesake uranium project in the US when it seeks to complete a Scoping Study in Q1 2024. 

Managing Director Greg Cochran tells Mining.com.au that the price today should not come as much of a surprise with everything going on in the world. 

“With Germany and Australia basically committing to nuclear because they know it’s the only way forward to actually reach any form of realistic and meaningful emissions reductions.”

Cochran notes another aspect is that over the last 15 years, the industry is now ‘playing catch up’, as there has been little work done in exploration and building new mines. 

The realisation is settling in now and that’s all been exacerbated by Russia invading Ukraine and putting paint to the world’s desire to get anything out of Russia, [being] nuclear services or uranium itself

“So there is this massive shortfall in supply, 30 to 40 million pounds per annum in a 160 to 180 million pounds per annum market and that is not going to go away anytime soon.

The realisation is settling in now and that’s all been exacerbated by Russia invading Ukraine and putting paint to the world’s desire to get anything out of Russia, [being] nuclear services or uranium itself.”

The company’s 100% owned Aurora Energy Metals Project in south-east Oregon has the US’s largest, mineable, measured and indicated uranium deposit. The current MRE is 107.3Mt @ 214ppm U3O8 for 50.6 Mlbs U3O8, with a shallow ‘high-grade’ core of 18Mt @ 485ppm U3O8 for 19.2Mlbs U3O8.

Need for nuclear

The rising price comes after the US Department of Energy (DOE) announced its US$500 million plan to build domestic uranium supply for advanced nuclear reactors, as part of President Joe Biden’s ‘Investing in America Agenda’.

US Secretary of Energy Jennifer Granholm says nuclear energy provides nearly half of the US carbon-free power and continues to play a ‘significant’ role in transitioning to a clean energy future.  

Unpredictable fossil fuel prices and go-getter goals for decarbonisation have driven the US, along with other countries to announce their nuclear power will be tripled by 2050.

S&P Global reports the rally started due to geopolitical instability, everlasting supply cuts, and companies renewing their long-term uranium supply contracts. 

Other factors influenced this now-bull market, including a change in global sentiment as plans were in the works for restarting or extending the operational life of nuclear power plants. 

The key role that nuclear energy will play in reaching net zero by 2050 was recognised at COP28. Some  22 countries, led by the US and other leading nuclear nations, including France, South Korea, Canada, Britain, Japan, Sweden and the UAE, signed a declaration to triple nuclear energy capacity by 2050.

Write to Aaliyah Rogan at Mining.com.au     

Images: Aurora Energy Metals & Terra Uranium
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Written By Aaliyah Rogan
Relocated from the East Coast in New Zealand to Queensland Australia, Aaliyah is a fervent journalist who has a passion for storytelling. When Aaliyah isn’t writing stories, she is either spending time with friends and family or down at the beach.