URA’s top ten holdings currently are Cameco Corp, Paladin Energy Ltd, NexGen Energy Ltd, Ur-Energy Inc, Uranium Participation Corp, Uranium Energy Corp, Denison Mines Corp, CGN Mining Co Ltd, Fission Uranium Corp, and, interestingly, Berkeley Energia Ltd. One can see why the URA fund has performed as it has, because its policy is “to provide investment results that correspond generally to the price and yield performance of the Solactive Global Uranium Total Return Index, which is designed to measure broad-based equity market performance of global companies involved in the uranium industry.” America.īut perhaps the best guide to the most promising individual companies are the specialist Exchange Trading Funds (ETFs) like the Global X Uranium equity fund (URA) and the Van Eck Uranium Vectors ETF (NLR). US based Uranerz Energy Corporation (NYSE:URZ) mines and refines uranium while Uranium Energy Corporation (NYSE:UEC) mines more globally in Canada and S. At spot’s apparently stable historic 30% or so discount to long-term prices, that might indicate $45/lb for BKY’s contract price in 2021.Īs for investing in individual companies, we have already mentioned the obviously dominant giant Cameco (NYSE:CCJ), probably the ‘purest’ exposure to all parts of the uranium chain, whose shares held up fairly well after Fukushima but which have been affected more recently by its own production problems.Īs for the others, share prices for the more attractive companies have been distorted in recent months by the Chinese who have been buying up exploration prospects in Athabaska and Western Canada and the US where some of the world’s best uranium deposits are found, together with stakes in major explorer/producers such as Fission Uranium (TSE:FCU) and NexGen (TSE:NXE).Īt the same time, Chinese $40bn market cap coal miner Shenhua Coal is negotiating with CNNC (China National Nuclear Corp) and CGN (China General Nuclear Power) to fund their nuclear related projects, perhaps the start of a trend for yet more diversification from coal to nuclear world-wide.Īpart from these and those we mentioned in the main article, there is a variety of companies who rely on uranium for a substantial portion of their revenues. Having said that, what about uranium futures – are they any guide? There are no charts, but data indicates futures for spot uranium rising from $25.4 today for settlement this month to $31.4/lb in five years time. It is also one of the few explorer/developers to have been bought by the equally few ETFs and managed funds (described below) which offer uranium exposure for investors. Let’s hope it is correct, because BKY is one of the few explorers to have seen its shares rise this year as what looks like its compelling profitability at those prices has been digested by the market. Thus, against today’s $25/lb spot price, Berkeley Energia (LON:BKY) (which I flagged back in January at 24p – now 43p) is assuming for its Salamanca project a contract price which starts at $39/lb as early as next year – rising over the life of the mine to $67/lb in 2030. Uranium spot price (lower) v long term contract price Here, for instance, is a chart from one of the two organisations tracking what is known of ‘long-term contract prices’, showing its estimate against ‘spot’ prices over the last five years. ![]() In other words, industry insiders might see an improving market before it is reflected in the spot price, making timing an entry into specific companies that much more difficult for an individual outside investor. ![]() Nuclear generators have to ensure their supplies many years ahead, so make deals that are hardly ever disclosed, at prices probably well above any ‘spot’ price, which can’t therefore be much of a guide to underlying movements in the market. Some countries have banned uranium mining altogether as well as nuclear generation, causing some smaller explorers to go bust.Īn important point to note about the ‘published’ price for uranium is that it is a ‘spot’ price referring only to intermittent deals in the market, usually on behalf of users looking to fill in gaps in their requirement. Given the long decline in the uranium price after Fukushima, its not surprising that practically all companies exposed to it – miners as well as producer/refiners – have seen similar declines in their shares. How to invest for what most observers think is an inevitable uranium price recovery in the next few years is not an easy question to answer. To follow our Magazine article on Uranium, here are some more thoughts…
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