Today I would like to take a closer look at the topic of uranium. We will also take a closer look at the market and prices.
Uranium megatrend - the bullish driving force
Let's now take a closer look at the uranium sector.
sector. With a view to the near future, this sector
potentially highly lucrative investment opportunities. Thus
The USA and the UK recently signed the "Atlantic Partnership for Advanced Nuclear Energy".
signed. This is a groundbreaking agreement that includes five projects with advanced reactors and aims to
reactors and pursues the goal of becoming independent of
to become independent of Russian nuclear fuel by 2028.
nuclear fuel by 2028. The partnership enables accelerated testing of reactor
accelerated testing of reactor designs that have already passed important hurdles
in the form of safety reviews. As a result, approval times can be significantly
be significantly shortened. The agreement provides strong political
political impetus to massively reduce the time and costs of
down massively. In this context, the international scope must be seen as particularly remarkable. The uranium reserves of the USA and the EU amount to only 14 months and two and a half years respectively. By comparison, the
Chinese nuclear power plants can generate electricity for
twelve years' worth of electricity generation. This significant discrepancy is a stark reminder of the strategic vulnerability of the US nuclear fuel supply chain. Particularly in light of the fact that the Trump administration is currently working flat out to expand
US nuclear energy capacities at full speed in order to reduce dependence on foreign sources. The US government has recently been working on closing or at least significantly reducing the gap described above through a multi-stage approach to uranium stockpiling and domestic production. In this regard
the massive dependence on Russia is a particular thorn in Donald Trump's side. The giant empire still supplies around a quarter of the enriched uranium required by the more than 90 US nuclear power plants, which generate
which provide a good fifth of US electricity.
Major uranium producers are sold out
"We are approaching a point - and we are not there yet
point where we will no longer use Russian enriched uranium," commented
uranium," commented US Energy Minister
Chris Wright at the 69th Nuclear Energy Conference in Vienna last month.
energy conference in Vienna. Wright therefore emphasized the need to expand the US strategic uranium reserve.
The Biden administration had already introduced a law in May 2024
legislation that obliges energy suppliers to forego Russian supplies until 2028.
supplies by 2028. Six months later, Russia struck back with
a temporary restriction on the export of enriched
enriched uranium to the USA. What's more:
The world's two largest uranium producers - Cameco
and Kazatomprom - are sold out for years to come.
In addition, Kazatomprom, as a Kazakh mining company
Kazakh mining company under the increasing control
China and Russia. The Trump administration therefore came up with an executive order to speed up the deployment of modern reactors. The first of these models are to be tested in the course of 2026. It is important to note that the USA only has
only have two commercial enrichment plants. There
One is a plant in the US state of Ohio, which is owned by Centrus Energy Corp. The separation of uranium isotopes for new models of modern reactors was recently started there. The largest facility is located in New Mexico. This facility - which
which produces fuel for traditional light water reactors
reactors - belongs to the Urenco consortium.
The spot market and the supply crisis
But even from a global perspective, there are many
arguments for uranium shares. At the end of 2024
417 nuclear power plants with a global capacity
of 377 gigawatts (GW) in operation. The International
Atomic Energy Agency (IAEA) recently revised its forecast for the expansion of nuclear energy capacities upwards. Based on the agency's conservative scenario, capacity will increase by 50 percent to 561 GW by 2050. In the
the IAEA's best-case scenario, however, capacity will increase by
capacity expands by 163 percent in the period in question
from 377 to 992 GW. Fixed-price uranium
contracts only account for around 30 percent of the entire
market. In other words, a good 70 percent
consist of market-based contracts. The latter
implies a floor of 70 dollars per pound and a cap of
pound and a cap of 130/135 dollars per pound,
which results in a price of 100/105 dollars. The sticking point: In order to be able to develop new uranium deposits, uranium prices would have to rise from the current rounded 70 dollars to 120/125 dollars. In addition, the contract prices with the uranium spot price have also climbed recently.
upwards. This is mainly due to demand from utilities interested in medium and long-term supply contracts. The risk:
Several different utilities will soon be unable to find
uranium producers who are willing to enter into long-term supply contracts.
long-term supply contracts. Then all that remains is the spot
market - but it is tiny. At the same time
financial investors have been aggressively buying up physical uranium
aggressively bought up physical uranium on the spot market in
the utilities. Since energy
is also a hugely important factor in the Trump adminis
administration, we can expect uranium fuels and nuclear
and nuclear components will play an important role in any export agreements
Of course, I also have a real hot stock that can benefit from the situation in the medium term. $EL8 (+0%) Here too, of course, it is a case of high opportunity/high risk.
And that brings us to Elevate Uranium. The
company can draw on uranium resources amounting to a good
161 million pounds of U3O8. On the Na
mibian uranium deposits alone, a good 3,600 drill holes have
have been drilled. The patented U-pgrade
U-pgrade process from Elevate Uranium appears highly promising. This
This is a processing method for upgrading near-surface uranium
the value of near-surface uranium ores. In my opinion
this application is potentially groundbreaking and revolutionary.
lutionary. With regard to U-pgrade, Elevate Uranium has recently
recently completed the construction of a pilot plant and shipped it
shipped from Perth to Namibia. In the next few days
assembly of the plant is to begin in the next few days
the plant so that it can be commissioned before the end of 2025.
can take place before the end of 2025. The aim of the management is to
to process at least 60 tons of uranium material using the pilot plant.
tons of uranium material. The plant is to prove in continuous
prove in continuous operation that the U-pgrade process is capable of
to remove extensive waste and convert uranium minerals
minerals into a high-quality concentrate before leaching.
concentrate before leaching. At the same time, the test operation will be used to
the technical suitability with regard to commercialization.
commercialization. The plant operation
be used to initiate important technical studies.
studies. The evaluation of the data could take a good five
months. If commissioning takes place in Decem
2025, the data should be available by the end of the first half of
be available by the end of the first half of 2026 at the latest.
The spectacular idea of developing the U-pgrade process
The Elevate Uranium team came up with the spectacular idea of developing the
uranium samples from the Marenica uranium deposit in
Namibia for further processing. Subsequently
tests were subsequently carried out on uranium samples from other sources.
Even during the first tests, it was possible to prove
that the U-pgrade process can concentrate the uranium by a factor of
can concentrate the uranium by a factor of 50 and that before leaching
about 98 percent of the mass before leaching. The final result
The end result was a high-quality concentrate of a small size, adjusted for impurities.
concentrate of a small size. The operating costs
compared to conventional processing methods
methods by a good 50 percent. Elevate Uranium
is pursuing the goal of significantly expanding its deposits in Australia and
Namibia and to increase the value of the uranium
uranium deposits using the U-pgrade process.
process. Non-Executive Chairman Scott
Perry recently attracted attention through massive insider purchases. Perry
previously served as CEO of Centerra Gold (CG; CAD
Gold (CG; CAD 16.61). Important: Elevate Uranium can develop
Elevate Uranium could potentially increase twofold by 2028 in an extreme scenario.
multiples by 2028 in an extreme scenario. BUT: Anyone who buys the stock now is betting
that the tests regarding U-pgrade will be positive and that the later
will be positive and that the subsequent commercialization will be
commercialization will succeed. At the current stage of the company
stage of the company, an investment in Elevate Uranium
is therefore a high-risk bet because a lot can go wrong with a pilot project. You should therefore only build up a mini position here, if at all, to start with.
