Why Renewable Energy Investors Should Consider the Nuclear Option

Shares of Uranium Royalty Corp. (TSXV:URC) have climbed more than 30% since Capital Ideas wrote about the company about six weeks ago

Capital Ideas Media | April 14, 2021 | SmallCapPower: As part of a cleaner energy future, both U.S. President Biden and Bill Gates have embraced the idea of increasing the use of nuclear energy. This has generated more investor interest lately in the uranium space.

(Originally published on Capital Ideas Media on March 2, 2021)

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For those subscribers looking to add some radioactive exposure to their portfolios, we have two suggestions.

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First, Uranium Royalty Corp. (TSXV:URC) is the only pure play uranium royalty company that has ownership interests in uranium companies along with royalties, streams, and even physical uranium holdings.

[Editor’s Note: Shares of Uranium Royalty Corp have climbed more than 30% since Capital Ideas wrote about the company about six weeks ago.]

A more speculative option, though, but what we think has bigger upside is NexGen Energy Ltd. (TSX:NXE). NexGen is viewed by many as having the world’s largest and lowest cost development-stage uranium project.

Canaccord Genuity associate analyst Katie Lachapelle recently increased her target price on NexGen to $6.75 per share from $5, while maintaining a “Speculative Buy” rating on the stock, after the Company released results of a maiden Feasibility Study on its 100%-owned Rook I Project located in Saskatchewan’s Athabasca Basin.

The Study estimates an after-tax Net Present Value (using an 8% discount rate) of C$3.5 billion, a 52.4% internal rate of return, and a payback period of just 0.9 years.

Ms. Lachapelle considers NexGen Energy to be a “prime acquisition target” but also believes the uranium junior has further upside potential “via exploration.”

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