Uranium remains on a hot streak in 2024, surging 16% in the first three weeks of the new year to about US$106 per pound.
“Uranium was the real star performer in a pretty challenging market for most commodities and asset classes [in 2023],” Sprott Asset Management (TSX:SII) CEO John Ciampaglia told Proactive’s Steve Darling in an exclusive interview.
“Uranium went up about 89% last year and, believe it or not, is up another 16% in the year-to-date,” Ciampaglia said.
Ciampaglia noted that one factor driving the continued momentum in uranium is growing concerns about the ability of the industry to expand production at both existing and new mines, with the world’s largest producing nation Kazakhstan earlier this month announcing that it would be unable to meet its 2024 production target.
“This very tight physical market is putting pressure on the spot price,” he said.
Ciampaglia expects the uranium market to remain tight for the next two to three years at a minimum as past-producing operations are brought back online and new mines are developed.
“With uranium prices at about US$106 a pound there is a very strong incentive for mining companies around the world to bring their projects forward and pull as much out of the ground as they possibly can,” he said.
“It’s going to be a big challenge and even greater opportunity for these mining companies to bring these projects back online, going from having no money with uranium stuck in the ground to signing new contracts and generating cash flow again.”
Small cap uranium stocks to watch
Up-and-coming uranium producers to watch include Pegasus Resources Inc. (TSX-V:PEGA), which recently kicked off exploration work at the past-producing Energy Sands uranium project in Utah, the United States.
In Canada, the highly prospective Athabasca Basin in Saskatchewan has several companies exploring its potential.
ATHA Energy Corp (CSE:SASK, OTCQB:SASKF) holds a significant land package of 3.8 million acres in the Basin in addition to 2.7 million acres in the Thelon Basin.
A recent large-scale electromagnetic survey at its North Valour-East project returned positive results, including lithium mineralization at 12 locations with grades reaching up to 27% U3O8.
Baselode Energy Corp (TSX-V:FIND, OTCQB:BSENF) is developing its 239,000-hectare project area, while Standard Uranium Ltd (TSX-V:STND, OTCQB:STTDF) aims to conduct at least three drill programs across its different projects throughout the Basin during 2024.
Over in Africa, Canadian-listed GoviEx Uranium Inc (TSX-V:GXU, OTCQX:GVXXF) is developing the Madaouela project in Niger and the Muntanga project in Zambia, both of which the company expects will achieve production during this uranium cycle.