Justin Huhn – Understanding The Macro Drivers For the Nuclear Fuel Cycle And Uranium Mining Stocks
Justin Huhn, Founder and Publisher of the Uranium Insider, joins us to provide a macro update on the uranium sector, the nuclear fuel cycle, and some recent merger and acquisition transactions with uranium mining stocks. We start with reviewing the supply and demand factors he is watching mostly focused on less converted UF6, as well as, less enriched uranium fuel on the market, which has utility companies looking to start contracting again. In addition, there has been a large curtailment in the underfeeding, which had been dumping excess fuel into the spot markets for the last decade. On the growth side we see both lifetime extensions on existing plants in the west, and Chinese reactor builds in the east as key demand drivers.
Next we shift over to how the macro factors are affecting the sentiment and activity in the uranium mining stocks, and how some companies are ramping up activities again. We’ve seen a number of key M&A deals this year, with the most recent being this week from Energy Fuels (UUUU) (EFR) selling it’s Alta Mesa ISR Project to enCore Energy (EU) (ENCUF), as a synergistic transaction helping both companies move forward with their respective pathways towards production. We also review that Uranium Energy Corp (UEC) has made 3 key acquisitions this year, in more of a rollup approach, acquiring the prior US assets from Uranium One and Anfield Energy (AEC), merging with UEX (UEX) in takeover bid process, and then acquiring the Roughrider project from Rio Tinto (RIO). All of these transactions show that the larger players are getting into position for a more active phase of the uranium contracting cycle.
We wrap up by getting Justin’s thoughts on which kind of companies he likes in the universe of uranium mining stocks. He is less interested in the grassroots drillplays, while acknowledging that discoveries made in a bull market can still be rewarded, but thinks with the urgency of the fuel cycle being the next 1-4 years, that it is less risky to be more focused on the “real companies” that are in development for near-term production.