In a recent interview, CEO of Sprott Asset Management John Ciampaglia stated that he foresaw a bull run for uranium this year. Sprott’s Physical Uranium Trust is the sole publicly listed fund that invests in physical uranium in North America. The Toronto-based company was launched last year in July and has grown its assets to roughly $ 1.9 billion, which is a significant increase from its initial $630 million value.
When Sprott’s units hit the market after its launch, uranium’s spot price was about $30/pound. Since that time, the company has amassed more than 41 million pounds of uranium, which is more than twice its initial 18 million stockpile. This isn’t the only company that has made significant returns in 2021, as Cameco shares also rallied by 67% while those of NorthShore Global Uranium Mining ETF and Global X Uranium ETF increased by 81% and 58% over the same period.
Concurrently, the price of the radioactive metal has increased, with data showing that the metal was trading at $42 toward the end of December. This increase and the growing acceptance of nuclear power comes more than a decade after the Fukushima nuclear disaster.
In his interview, Ciampaglia explained that nuclear was the only way some nations could achieve their greenhouse gas emission targets, noting that the governments of France, the Netherlands and the United States had expressed support for building additional capacity. The EU is also planning to label nuclear energy as a green energy.
With regard to investing in uranium, GLJ Research CEO Gordon Johnson believes that the best way to invest in uranium this year will be to own shares of low-cost uranium producers.
Despite the positives, nuclear energy critics state that new capacity is time consuming and too costly to build enough to rival solar and wind in adding clean power to grids. For example, Arc Tern Ventures managing partner Tom Rand stated in an interview with Yahoo Finance that the small modular reactors being built were years away from large-scale deployment that could help reduce emissions.
He explained that building a new nuclear plant today would take more than a decade and cost a lot more than solar and wind and storage. In addition to this, he noted that the nuclear solution was too expensive, big and complex for an issue that required low-cost and agile solutions.
Not many agree, however, given the unreliability of renewable energy. For example, German utilities burnt more coal in 2021 than in the previous year because of lower wind speeds and the increase in the demand for energy. It is this increased demand for green energy that will drive up the price of the uranium extracted by sector players such as Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) over the coming years and decades.
NOTE TO INVESTORS: The latest news and updates relating to Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) are available in the company’s newsroom at http://ibn.fm/UUUU
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