Nuclear Energy Generation is Fueled by Uranium
For those new to uranium investing, the concept of making money from investing in uranium companies can be both intriguing and frightening.
At a high level, nuclear power generation uses uranium (a metal) to heat water to generate the world’s electricity.
Nuclear power plants have a ferocious appetite for this metal to fuel their operations. Over 151 million pounds of uranium demand come from these power plants every year.
Uranium Stocks Are Explosive Investments
As of September 10, 2021, the price of uranium is just $42.75 per pound.
This price is below what most uranium companies and especially uranium producers need to remain viable businesses supplying utilities with the fuel for their billion-dollar nuclear reactors.
Why is this information important to you? Because the uranium market needs fuel in massive quantities with contracts now expiring and huge financial players entering the game to prevent them from buying with a lower uranium price.
Hold with me for a minute while we walk you through more details on why investing in uranium mining stocks could be a massive opportunity for you.
During the last bull market, uranium prices rose to $137 per pound.
As uranium prices rise, the best uranium stocks increase exponentially with it.
The Most Well Known Case of How Uranium Stock Prices Impact Uranium Stocks
Experienced uranium stocks investors are very familiar with how one company performed during the previous bull market.
The company name is Paladin Energy. Paladin is a uranium production company.
The stock price of Paladin Energy rose from $0.01 to about $10, making a $1,000 investment grow to $1,000,000.
Where the price per pound ends up this cycle is anyone’s guess. There are more reasons for an even more significant increase than the last cycle, detailed below.
Why the Price of Uranium Will Grow Much Higher
This bull market is much different from the last as the market has drastically changed.
Decades of low prices have caused many companies to go out of business.
These companies include exploration companies that search for economic uranium deposits to meet future customer demand.
There are no near-term resources to supply utilities with the fuel they need to generate electricity from their nuclear reactors without identified economic deposits.
It can take a decade or more for uranium miners to bring a deposit online from the initial identification of a potential deposit to actual uranium production in many countries.
This lengthy timeframe further exacerbates the problem utilities have placed themselves in by not paying a price that will support the supplier base.
Due to low prices, the current price per pound of uranium is below what is needed to restart many uranium mining operations currently closed.
Some of these mines will need 18 months to come back online.
Even with those mines brought back online, there is still a significant uranium deficit for years.
There are massive changes in demand with the implementation of many new financial funds buying uranium and sequestering it from end consumers until prices are much higher.
The largest of which is the Sprott Physical Uranium Trust.
This trust just issued another $1.3 Billion in shares to continue eating up the remaining supply, thereby taking it away from end consumers until prices justify releasing to the market.
New and extended life power plants need millions of pounds of uranium which they do not have.
They must compete against the existing power plants needing refueling and the physical funds and national and corporate uranium reserves to secure uranium.
Existing utility customers contracts are expiring, requiring the purchase of millions of pounds to resupply and keep their billion-dollar operations running.
Existing miners are purchasing uranium off the market to hold for higher prices rather than conduct internal operations with higher costs.
Electricity production is expected to grow by 49% by 2040.
Nuclear Power is Clean Energy
The world also wants clean energy, which means a net-zero solution is needed.
That solution is nuclear power.
Uranium is the only fuel nuclear power plants can use.
How to Invest in Uranium Stocks
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