Demand for uranium is expected to rise as it remains the critical commodity input for nuclear energy.
Nuclear power is a low-carbon, reliable source of energy and uranium has an important role to play in maintaining energy security, with the potential to complement renewable energy solutions.
What are Uranium Stocks?
Uranium stocks are shares in companies that are involved in the mining and extraction of uranium, or in exploring or developing uranium deposits. Demand for uranium in nuclear reactors is expected to climb 28% by 2030 and nearly double by 2040 as governments ramp up nuclear power capacity to meet zero-carbon targets.1
Uranium Outlook
Uranium equities have rallied 47.92% over the 12 months to 30 November 2023, while the price of uranium oxide (U3O8) has risen 62.6% over the same period.
Uranium equities registered falls of 5.99% in 2022, a year that was marked by volatility across almost all asset classes. However, the price of U3O8 marked its third consecutive year of gains, rising 11.9% in 2022 and 96.2% over the last three calendar years, while a fourth consecutive year of gains in 2023 appears likely.
The long-term outlook for the uranium market looks positive. The global demand for uranium is expected to grow in the coming years as countries look to reduce their carbon emissions. This growth in demand is likely to support the price of U3O8, which could benefit uranium equities in the long run.
Top Uranium Stocks in ASX: URNM (By Market Capitalisation)
Cameco (CCJ)
Market capitalisation (*as at 15/12/2023): US$20 billion
Cameco is a Canadian uranium mining and exploration company with operations in Canada and Kazakhstan. In September, Cameco announced that at its flagship Cigar Lake mine would miss expectations, blaming equipment reliability issues. Production is now forecast to be 16.3 million pounds of U3O8 in 2023, down from the previous forecast of 18 million pounds. Cameco also owns a 49% interest Westinghouse, one of the world’s largest nuclear services businesses.
Kazatomprom (KAP)
Market capitalisation (*as at 15/12/2023): US$10.6 billion
Kazatomprom is the world’s largest uranium producer, with operations in Kazakhstan. The company currently operates 26 deposits through its subsidiaries, joint ventures, and associates. Kazatomprom is the national atomic company of Kazakhstan, and prior to 2018, was wholly owned by the nation of Kazakhstan.
Sprott Physical Uranium Trust (U-UN)
Market capitalisation (*as at 15/12/2023): CA$6.8 billion (US$5.1 billion).
U-UN (commonly known as SPUT) is the world’s largest physical uranium fund. It holds the vast majority of its assets in physical uranium. SPUT held over 63 million pounds of uranium as at 14 December 2023.
NexGen Energy (NXE)
Market capitalisation (*as at 15/12/2023): CA$4.9 billion (US$3.7 billion).
NXE is developing the Rook I Project in Northern Saskatchewan, the largest and lowest cost uranium project in development anywhere in the world. According to NexGen’s 2021 feasibility study, Rook I is capable of producing 29 million pounds of U3O8 p.a., which is equal to 27% of 2022 global production. Rook I is currently working through the project approvals stage and has begun front end engineering design.
Uranium Energy Corporation (UEC)
Market capitalisation (*as at 15/12/2023): US$2.7 billion
UEC is a US-based uranium mining and exploration company with projects in the United States, Canada, and Paraguay. UEC’s Hobson Processing Plant in Texas is currently operational, with four near-term production projects across Texas and Wyoming. UEC also has two projects in development, and 13 exploration projects across the US, Canada, and Paraguay.
Paladin Energy (PDN)
Market capitalisation (*as at 15/12/2023): AU$3 billion (US$2 billion).
PDN is an Australian uranium mining company with operations in Australia and Namibia. PDN recently announced plans to restart its Langer Heinrich uranium mine in Namibia, which would be the first new uranium mine to be built in Namibia in over 20 years. The company also has uranium projects in Canada, Western Australia, and Queensland.
CGN Mining (1164)
Market capitalisation (*as at 15/12/2023): HK$12.9 billion (US$1.7 billion).
CGN Mining owns a minority stake (49%) in two operating uranium mines in Kazakhstan, as well as a 19.99% interest in Fission Uranium, which is developing the high grade PLS Project and the Triple R deposit in Saskatchewan, Canada. Through its subsidiary, CGN Global Uranium, the company engages in the marketing, financing, and trading of uranium in international markets.
Denison Mines. (DNN)
Market capitalisation (*as at 15/12/2023): US$1.6 billion
DNN owns a portfolio of exploration and development projects in the Athabasca Basin in Saskatchewan. The Athabasca Basin hosts the world’s largest and highest-grade mines and development projects. The Phoenix deposit at its flagship Wheeler River Project is expected to produce an average of 8.4 million pounds of U3O8 p.a. in its first five years of operation.
Yellow Cake (YCA)
Market capitalisation (*as at 15/12/2023): £1.3 billion (US$1.6 billion)
YCA is a UK-based uranium company that owns a stockpile of more than 20 million pounds of physical uranium. It also has a contract with Kazatomprom, allowing it to purchase up to US$100 million of U3O8 per year. YCA’s strategy is to buy and hold physical uranium, offering pure exposure to uranium prices.
Energy Fuels (UUUU)
Market capitalisation (*as at 15/12/2023): US$1.3 billion
UUUU is a uranium mining and exploration company with operations in the United States. EFR recently restarted its White Mesa Mill in Utah and is currently developing the Pinyon Plain Mine in Arizona and the La Sal Complex in Utah. It also owns the Nichols Ranch In-Situ Recovery (ISR) project in Wyoming, which is fully licensed and developed, and currently in standby. The company has claimed that its US portfolio can produce up to 2 million pounds at a low cost in the short term. It also owns three other large-scale projects in development, with the potential to produce an additional 4 million pounds of U3O8 per year.
Boss Energy (BOE)
Market capitalisation (*as at 15/12/2023): AU$1.6 billion (US$1.1 billion)
BOE is developing the Honeymoon Uranium Project in South Australia, with first production expected in Q1 2024. Honeymoon previously produced uranium under its previous owner, Uranium One, between 2011 and 2013, before being suspended in 2013 due to falling uranium prices. BOE recently announced the purchase of 30% of Alta Mesa, a high-grade uranium project in Texas, owned and operated by enCore Energy. Production is expected to commence at Alta Mesa in H1 2024.
How to invest in Uranium Stocks
You can access all the above stocks in one simple trade with Betashares Global Uranium ETF (ASX: URNM).
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URNM
Global Uranium ETF
URNM is the first uranium-focused equities ETF traded on the ASX. It provides exposure to a portfolio of global companies involved in the mining, exploration, development and production of uranium, modern nuclear energy, or companies that hold physical uranium or uranium royalties. URNM provides a cost-effective and easily accessible way to gain exposure to companies involved in the uranium industry.
There are risks associated with an investment in URNM, including market risk, sector concentration risk, international investment risk and regulatory risk. Investment value can go up and down. An investment in URNM should only be considered as a part of a broader portfolio, taking into account your particular circumstances, including your tolerance for risk. For more information on risks and other features of URNM, please see the Product Disclosure Statement and Target Market Determination, both available at www.betahares.com.au.
- https://world-nuclear.org/information-library/current-and-future-generation/world-energy-needs-and-nuclear-power.aspx#:~:text=In%20the%20roadmap%2C%20the%20amount,to%20about%2050%25%20by%202050.
As measured by the Indxx North Shore Uranium Mining Index (AUD), adjusted for the 0.69% p.a. management fee and costs applicable to Betashares Global Uranium ETF (ASX: URNM).
All U3O8 prices and returns quoted are in US dollars.
This article mentions the following funds
Annabelle Dickson was previously a journalist at Financial Standard and prior to that at The Inside Investor and The Inside Adviser. She holds a Bachelor of Arts in Communication (Journalism) from The University of Technology Sydney.
Read more from Annabelle.