According to Resource Maven Gwen Preston (read her commentary here), 2016 is shaping up to be a turnaround year for uranium. Back in 2007 when the prices were shooting up, many utilities locked into 10-year supply deals. Since nuclear reactors can’t function without fuel, utilities will likely begin negotiating a new agreement during the next year before their current one expires in 2017. This, along with other catalysts, could spark the beginning of a long-term climb for the spot price of uranium and would likely boost the stock values of the companies on our list today.
Uranium Participation Corp. (TSX: U)
Price: $5.27 | Market Cap: $613 million
UPC is a company that invests almost all of its capital into uranium, with the primary objective of achieving appreciation in the value of its uranium holdings. As at November 30, 2015, the Corporation held an aggregate of 9.5 million pounds of U3O8 and 1.9 million of KgU as UF6, for a Net Asset Value of C$706.7 million, or C$6.11 per share. UPC also has $14 million in cash, and no debt, and yet the Company’s stock price is currently trading at less than its NAV.
Energy Fuels Inc. (TSX: EFR)
Price: $2.58 | Market Cap: $117 million
Energy Fuels is the second largest uranium producer in the U.S. (as of 2014). The Company’s operating assets (as seen on the right), produced one million pounds in 2014, generating revenues of $46 million. Energy Fuels is entered into long-term sales contracts, which are expected to average $57.25/lb. of uranium in 2015, a price above the current $36.15/lb. spot price of uranium. The Company currently has $43 million in working capital, and $33 million in debt, providing EFR with great financial liquidity. As of FYE2014, the company has 18.4 million lb. of uranium in the Proven & Probable category, and 78.4 million lb. in the Measured & Indicated category.
Looking for more hidden gems? Get your free Ubika Mining 20 Monthly report.
The Ubika Mining 20 (UM20) index slipped 3.4% during the past month yet handily beat the 13.1% slump by the TSX Mining Index, UM20’s closest benchmark. The TSX Venture index, meanwhile, eased 1.3%. Lucara Diamond Corp. (TSX: LUC) was the top-performing component company this month, powering 27% higher after announcing the recovery of the second largest gem-quality diamond ever mined. Get your copy of the Ubika Mining 20 report here >>
Ur-Energy Inc. (TSX: URE)
Price: $0.84 | Market Cap: $105 million
Ur-Energy is a junior uranium mining company operating the Lost Creek in-situ recovery uranium facility in south-central Wyoming. Its current Wyoming properties contain NI 43-101 compliant resources of 31.1 million lb. of uranium in the Measured & Indicated category, and 6.8 million lb. in the Inferred category. Ur-Energy generated $51 million in revenues during the past 12 months.
