Arguably, uranium was one of the top-performing commodities in 2023, with the market experiencing a breakout year, reaching its highest levels in 15 years and recording a 50 percent growth in year-to-date prices. Industry experts are left pondering if this marks just the beginning of a historic run for the commodity.
Figure 1: Uranium prices reaching 15-year highs. Source: TradingEconomics
Today, uranium prices in the US have surged to $74 per pound, matching the 15-year high seen in October and surpassing levels observed before the Fukushima disaster. A significant shortfall of 8-10 million pounds per annum in uranium production has contributed to a favorable environment, exacerbated by a supply surplus of 10 million pounds in the market.
The growing demand for new uranium sources is intricately connected to the volatility of fossil fuel prices and the global push for decarbonisation, prompting substantial investments in nuclear power.
Global interest in uranium remains robust, boasting 458 operating reactors, 58 under construction, and an additional 104 in the planning stage. In line with this, China has unveiled ambitious plans to construct 32 new nuclear reactors by the end of the decade, while Japan’s decision to restart uranium projects is facilitating the emergence of new facilities.
Russia’s substantial role in the uranium sector and recent disruptions in Niger, a crucial uranium source, have culminated in turbulent market dynamics.
In spite of this, price has continued to soar causing a further gap in supply and demand.
Supply and Demand Gap
While the uranium price has seen substantial growth this year, it still lags significantly behind the historical high of around $140 per pound in 2007.
Analysts argue that, despite the upward trend, the sector faces a challenge in meeting the increasing demand for uranium. Estimates reveal a cumulative supply gap of approximately 1.5 billion pounds of uranium through 2040.
Figure 3: Uranium supply and demand gap. Source: Nasdaq
Deep Yellow Limited (ASX:DYL)
Deep Yellow has a market capitalisation of $826.67 million with goals to become a Tier-1 uranium company capable of producing over 10 million pounds per annum.
The Company’s portfolio includes uranium assets in Australia and Namibia, parading the largest uranium resource base among all ASX-listed companies.
Deep Yellow’s latest announcement entailed highly encouraging results from ongoing metallurgical testwork completed at its Mulga Rock Project, indicating an overall recovery of uranium above 90%, set to positively influence the update of its Mineral Resource Estimate (MRE), anticipated later this year.
DYL’s Australian Stock Exchange-listed share price has risen 6.192% today and is currently trading at $1.157 (12,30pm UTC+ 8 hours).
Boss Energy Limited (ASX:BOE)
Boss Energy Limited, a significant player in the Australian uranium mining sector with a market capitalisation of $1.44 billion, has recently broadened its portfolio by securing access to a potential new uranium province, further solidifying its prominent position in the industry.
Encompassing an extensive area of 3,184 square kilometres, the four highly prospective tenements strategically surround Boss’ Honeymoon Uranium Project. These mineral rights are held in collaboration with copper developer Coda Minerals, highlighting the collaborative nature of mineral exploration in the region.
In its latest announcement, the Company detailed its growth strategy, unveiling plans for scout and infill drilling at the Jason Deposit—a crucial component in the Honeymoon expansion study.
BOE’s Australian Stock Exchange-listed share price has risen 1.951% and is currently trading at $4.180 (12.30pm UTC+ 8 hours).
Bannerman Energy (ASX:BMN)
Bannerman Energy, boasting a market capitalisation of $388.31 million, anchors its position in the uranium market with the Etango Project, situated in Namibia, recognised as one of the world’s largest undeveloped uranium assets.
The Etango Project boasts a world-class uranium Mineral Resource endowment of 207 Mlbs of contained U3O8, with a 100ppm U308 cut-off.
Benefiting from extensive exploration and feasibility activities spanning the past 15 years, the Project has entered a crucial phase, as the Company recently announced the initiation of its Front End Engineering and Design (FEED) work. This milestone propels the Project toward a targeted positive Final Investment Decision expected to be reached in the first half of the upcoming year.
BOE’s Australian Stock Exchange-listed share price has risen 6.201% today and is currently trading at $2.740 (12.30pm UTC+ 8 hours).
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