📢NEWS📢 Uranium' optimistic projections for 2024 !

"The price of uranium has doubled over the last 4 months.  Despite this, I still consider this metal to be a preferred investment because its bullish cycle is far from over.  Here are some reasons that inform this choice.

GLOBAL ENERGY CRISIS
On the one hand, we face an enormous global challenge to meet energy needs.  Conflicts with Russia, the main supplier of gas and oil, have complicated energy supplies throughout Europe and elsewhere in the West.  Furthermore, renewable energies are developing at an insufficient speed to meet demand.  Moreover, these green technologies are also very demanding in various metals, which are themselves in short supply.  In this context, we are currently witnessing the reopening and construction of a multitude of nuclear installations.  The objective is of course to produce energy in very large quantities with very little material, while possibly reducing fossil fuels.  The key element of this movement is of course uranium. 

PRODUCTION DEFICIT

Here again, we face the absence of meeting points between supply and demand.  In fact, the current production gap is such that it will take years to fill as there are so many nuclear reactors currently under construction, fueling demand considerably.

On the producers' side, we see a scenario of stagnation in production.  For example, the world's largest producer, KATCO, from Kasakhstan, is lowering its projections for the coming years.  This is what Justin Huhn, uranium specialist, explains in an interview with Wealthyon.  To fully understand this drop, which may seem surprising, we must understand the uranium extraction process.  The latter is extracted using sulfuric acid (vitriol) by the principle of leaching.  First, a sulfuric acid solution is slowly injected through the ore by drilling.  Then, about 2 years later, drilling was done again to extract the uranium from the surface.  The problem is that as the mines are exploited, the wealth of the deposits decreases.  This therefore requires more and more sulfuric acid in order to extract the same quantities.

According to Justin Huhn, in one year, KATCO needed to use 20% more sulfuric acid in order to produce fairly similar quantities.  Such a level of increase is quite difficult for sulfuric acid manufacturers to absorb.  Conclusion: even if we want to increase uranium production capacity, it is extremely difficult.

Paradoxically, the speed at which uranium prices rose this fall means that producers are currently hesitant to sell their production, considering being able to sell it for more later.  This tends to further accentuate the deficit.

UNDER-INVESTMENT IN THE NUCLEAR INDUSTRY
More generally, the 2007 nuclear accident in Fukushima threw a shower of cold water on the uranium industry.  This event caused the abandonment of many nuclear power plants.  The price of uranium then slid throughout the decade that followed.  The fact that uranium prices have been too low for too long has meant that there has been underinvestment in the development of new uranium mining projects.  Today we find ourselves in an environment where the capacity to increase production is limited and users will fight for what is left.  There simply will not be enough uranium for all the projects that are in development.

PRICE PROJECTION
During the last bullish cycle ending 2007, the maximum reached in the price of uranium was $138.

We are currently at around $100 US.  By adjusting the price of $138 according to the devaluation of the US dollar, we arrive at more than US$200.  So there would still be room to comfortably make a second double over the next few years.  Huhn, for his part, claims that prices are likely to rise higher than the projections of the most optimistic speculators.

With the recent creation of the Sprott Physical Uranium Trust fund, investors now have the opportunity to invest in uranium without using the contract market.  This fund guarantees a uranium reserve equivalent to the value of the fund."