Fabi Lara – Nuclear Power Fundamentals – Opportunities Abound For Investing In Uranium Stocks – Part 3
Fabi Lara, Founder and Publisher of The Next Big Rush, joins me to dig into the major demand drivers and supply disruption news that is underpinning a longer-term bull market for nuclear power and uranium mining. We then pivot over to a comprehensive review of the opportunities in producers, developers, and explorers in the US and Canada.
We’re back with another longer-format discussion where we initially get into the announcements from China this week about its goal to produce 10% of electricity from nuclear power by 2035 and 18% by 2060. It stated it could build 100 new nuclear reactors by 2035, and could keep the pace of approving at least 10 new nuclear reactors per year, over the next 10 years. It has also been highlighting its new fourth generation of reactor as something it could export to other nations that are also looking to expand nuclear power capacity.
Then Fabi outlined the news this week from Meta/Facebook that it has sent out a request for proposals to technology developers that it is seeking to bring multiple nuclear reactor units online that target one to four gigawatts of electricity, starting in the early 2030s to support data centers and communities around them. This has Meta joining a flurry of high-profile megacap tech companies that have announced going all-in on developing more nuclear energy to fuel their energy-intensive data centers. In a sector that already has seen surging demand from all the traditional reactor builds in the East and Middle East, the push for more SMRs in the West is pushing demand up even further.
We then shift the conversation over from the growing demand to the very pertinent question of where all the new supply will come from in the uranium mining sector. It’s a very nuanced conversation about a where the uranium production is coming from, where outside of Cameco (TSX: CCO; NYSE: CCJ) and Kazatomprom, the only uranium supply coming online is from the US producers and near-term producers like Energy Fuels (NYSE: UUUU) (TSX: EFR), enCore Energy (NASDAQ: EU) (TSX.V: EU), Ur-Energy Inc. (NYSE American:URG)(TSX:URE), Peninsula Energy Ltd (ASX:PEN, OTCQB:PENMF), and Uranium Energy Corp (NYSE American: UEC). This will not be enough supply to meet the production deficit globally, but it will underpin a premium for domestic producers.
Wrapping up we pivoted over to the large amount of money that has been raised and put into the ground over the last 2 years with uranium exploration companies, with not many results to show for it. Fabi outlines that some of the companies she follows that seem to be on to early-stage success in vectoring in on the right geological settings and radioactive mineralization are Stallion Uranium Corp. (TSX-V: STUD) (OTCQB: STLNF), and Forum Energy Metals Corp. (TSXV: FMC) (OTCQB: FDCFF). She also points to the high-grade discover that F3 Uranium (TSXV: FUU) (OTCQB: FUUFF) has made in the last couple years being the product of years of prior exploration programs, highlighting the longer time frames needed to delineate economic uranium deposits.
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Click here to visit Fabi’s YouTube page:
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People that think the run in uranium and uranium stocks is over are sorely mistaken.
I’m not aware of any commodity that has as robust of fundamentals as Uranium from both the demand or supply side. People with PM tunnel-vision have already missed out on a great last few years in the U-stocks since 2020, and they were often running when the gold and silver stocks were lackluster. The good news is that there is still a long way to go in the uranium bull market for the next few years.
As far as perfect storm of catalysts, a resource investor could not hope for anything better than what we’ve been seeing play out in nuclear power and uranium the last few years.
China starts up world’s first fourth-generation nuclear reactor
By Colleen Howe – Reuters
“China has a goal to produce 10% of electricity from nuclear by 2035 and 18% by 2060.”
US Scrambles To Break Reliance On Russian Nuclear Fuel
Jamie Smyth – Financial Times – November 26 2024
“At a facility in Oak Ridge, Tennessee, last week engineers for Centrus Energy resumed manufacturing a classified centrifuge technology required to produce nuclear fuel as part of an expansion plan the company says is critical to breaking US reliance on Russian supplies.”
“The $60mn initial investment marks the first stage of a potential multibillion-dollar investment required by the company to undertake a large-scale expansion of uranium enrichment — the prime component of nuclear fuel — at a separate manufacturing facility in Ohio.”
“Centrus is one of a handful of US-based companies competing for $3.4bn in federal funding to jumpstart American production of nuclear fuel following the decades-long decline of a domestic industry that was overtaken by cheaper Russian imports.”
“We feel a great sense of urgency about getting started and we want to make an initial investment to begin centrifuge manufacturing and expand our manufacturing capacity to give ourselves a head start in anticipation of further federal funding becoming available,” Dan Leistikow, Centrus vice-president of communications, told Energy Source.
US utilities have signed initial supply contracts worth $2bn with Centrus, which are contingent on the company securing sufficient federal funding to expand its manufacturing capacity further, he added.
https://www.ft.com/content/7ead1252-70a5-4258-8d0c-b01a65bd61f1
US Unveils Plan to Triple Nuclear Power by 2050 as Demand Soars
Jennifer A. Dlouhy – Bloomberg – Tue, November 12, 2024
“Under a road map being unveiled Tuesday, the US would deploy an additional 200 gigawatts of nuclear energy capacity by mid-century through the construction of new reactors, plant restarts and upgrades to existing facilities. In the short term, the White House aims to have 35 gigawatts of new capacity operating in just over a decade.”
“The nuclear industry — and its potential resurgence — also enjoys bipartisan support on Capitol Hill, culminating in the July enactment of a law giving the US Nuclear Regulatory Commission new tools to regulate advanced reactors, license new fuels and evaluate breakthroughs in manufacturing that promise faster and cheaper buildouts.”
“Demand for nuclear is increasing as nations aim to accelerate the addition of low-emissions power sources, and as a result of rising electricity consumption by energy-intensive industries including data-processing for artificial intelligence.”
“Microsoft Corp. struck a deal in September for electricity from a revived Three Mile Island nuclear plant in Pennsylvania, while Alphabet Inc.’s Google, Amazon.com Inc. and billionaire financier Ken Griffin are all among those to have recently expressed new interest in the development of atomic energy.”
https://www.yahoo.com/news/us-unveils-plan-triple-nuclear-094500700.html
How is it the US is allowed to manufacture centrifuges, while Iran’s should not, especially since the US is the only nuclear terrorist on the planet.
Meta joins the nuclear-powered AI fray
Ben Geman – Axios – Dec 3, 2024
“Facebook parent Meta is seeking developers that can bring nuclear reactors online starting in the early 2030s to support data centers and communities around them.”
“The company just announced a ‘request for proposals’ that targets a large pipeline — one to four gigawatts — of new generation.”
“Meta is joining Amazon, Google and other tech giants in turning to nuclear generation to fuel energy-thirsty AI data centers with zero-carbon electrons.”
It’s seeking partners that can “help accelerate the availability of new nuclear generators and create sufficient scale to achieve material cost reductions by deploying multiple units,” an RFP summary states.
https://www.axios.com/2024/12/03/meta-facebook-nuclear-power-ai-data-centers
Amazon Invests Big In Small Modular Nuclear Reactors
Andrew Freedman – Axios – Oct 16, 2024
“Amazon is looking to next-generation nuclear plant designs to power its expanding portfolio of data centers, as AI helps to drive up power demands.”
“The new commitments — along with other companies’ recent announcements — show a surge of interest in small modular reactors to prevent burgeoning AI computing tasks from torpedoing climate goals.”
“Driving the news: Amazon announced Wednesday it signed an agreement with the regional utility Energy Northwest in central Washington state to invest in developing four SMRs at its Columbia Generating Station in Richland, Washington.”
https://www.axios.com/2024/10/16/amazon-invests-small-modular-nuclear
Amazon Goes Nuclear, To Invest More Than $500 Million To Develop Small Modular Reactors
Diana Olick – CNBC – Wed, Oct 16 2024
Hungry for Energy, Amazon, Google and Microsoft Turn to Nuclear Power
Large technology companies are investing billions of dollars in nuclear energy as an emissions-free source of electricity for artificial intelligence and other businesses.
By Ivan Penn and Karen Weise – New York Times – Oct. 16, 2024
Microsoft Deal Propels Three Mile Island Restart, With Key Permits Still Needed
By Reuters – September 21, 2024
Biden-Harris Administration Announces $900 Million to Build and Deploy Next-generation Nuclear Technologies
US Department of Energy – October 16, 2024
Nvidia-Backed Firm Eyes Data Center Near Japan’s Nuclear Power
By Shoko Oda and Takashi Mochizuki – Bloomberg – October 17, 2024
Ubitus looking at Kyoto, Shimane and Kyushu as potential sites
Tech giants eyeing nuclear for low-carbon, stable power source
Geopolitics and Uranium: Scott Melbye on Russia’s Supply Ban and U.S. Response
Kitco News – November 26, 2024
“Russia’s uranium export ban has rocked global energy markets, exposing critical vulnerabilities in U.S. energy security. Scott Melbye, Executive VP of Uranium Energy Corp (UEC), discusses the urgent need for a robust domestic uranium fuel cycle to reduce reliance on foreign suppliers like Russia and Kazakhstan. With uranium prices already breaching $100 per pound and a 50-million-pound supply deficit, Melbye explores how the U.S. can respond to growing nuclear energy demand.”
“Melbye also highlights UEC’s leadership in North American uranium production, from restarting mines in Wyoming and Texas to advancing the Rough Rider project in Canada. He outlines the role of nuclear energy in powering the green transition, the rise of small modular reactors (SMRs), and the potential impact of President-elect Trump’s pro-energy policies. This is a must-watch for insights into the future of uranium, energy security, and the nuclear power industry.”
US Needs To Triple Uranium Supply To Support 300 GW Of Nuclear Capacity
By The Oregon Group – October 8, 2024
The US Ambitious Plan to Triple Nuclear Power by 2050
Milton Caplan – Energy Central
“As COP 29 got underway in Baku, Azerbaijan, expanding nuclear power continued to be high on the agenda. The Government Pledge to triple global nuclear signed at last year’s COP 28 in Dubai added six new signatories this year, El Salvador, Kazakhstan, Kenya, Kosovo, Nigeria, and Türkiye, bring the total number to 31.”
“We have previously spoken about the plans of countries such as the UK, Canada, and France to meet this target. Today, we will talk about the largest nuclear country of all, the United States and its recently issued action plan to triple its nuclear fleet, an addition of 200 GW of nuclear by 2050.”
This is not the first we hear of this ambition. The US Department of Energy issued its “Liftoff report” in 2023 setting 200 GW as the goal by 2050. More recently in September 2024, it updated this report with more details and analysis of the issues. And now in November, the White House issued its plan “SAFELY AND RESPONSIBLY EXPANDING U.S. NUCLEAR ENERGY: DEPLOYMENT TARGETS AND A FRAMEWORK FOR ACTION”.
“This plan sets out a timeline and the policies in place to support deployment. It talks about needing large nuclear, SMRs, microreactors and even restarting currently idled plants. An all-of-the-above strategy. In terms of timing, it sets a target of 35 GW of new nuclear to be in operation or under construction by 2035, with annual nuclear deployment growing to 15 GW per year by 2040 and thereafter.”
“This is massive in scope. For context, the large nuclear is assumed to be the AP1000 at about 1200 MW per unit, the SMRs include designs in the 300 MW range like those from TerraPower and GEH and the small more modular designs around 100 MW per unit such as those from NuScale and X-Energy. In terms of numbers, if we assume about half of the demand will be met with large units, this would require a fleet of 14 or 15 AP1000s to be committed almost immediately in order to be under construction with the first units completed by 2035. If we then assume a quarter are 300 MW class that means another 20 or so TerraPower and GEH type units by 2035 and the remaining ones in the 100 MW range would require about 60 or so NuScale and X-Energy type modules, all within a decade. Wow!”
https://energycentral.com/c/ec/us-ambitious-plan-triple-nuclear-power-2050
I posted this rant to the KER blog back on Oct 17th, but it seems appropriate for a repost in this thread:
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Anyone else noticing a trend here. 🙂
It is so funny, that if we speak to oil & gas guys, they have tunnel-vision that “Clearly all these A.I. data centers are going to need more Nat Gas plants to power them.”
>> I’ll politely ask them off-mic, well what about nuclear power as a solution? Which they’ll then dismiss as too costly and too long of lead times… it’s going to be baselode nat gas plants.
Then if we speak the precious metals guys about this topic of where all the electricity for A.I. data centers and EVs and surging electrical demand is going to come from, that they’ll go into “Clearly all these A.I. data centers are going to need massive solar farms to power them, and think about all that silver is it going to require!”
>> I’ll politely ask them off-mic, well what about nuclear power as a solution? Which they’ll then dismiss as too costly and too long of lead times… it’s going to be carbon free solar power.
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Well, in the last few weeks we’ve seen most of the big tech companies Amazon, Google, Microsoft, Nvidia, all signal that they are going in bigly into nuclear power. 😉
Look, I think we are going to need a mix of every power generation method out there to feed the massive electricity needs that are emerging, but it always amazes me at how many people completely skip nuclear power when looking for solutions, or dismiss it as antiquated. Clearly that is not the case, and if anything small modular reactors are the wave of the future.
The reality is that nuclear power is the only carbon-free baseload power source, trumping both nat gas plants (which are baseload but not carbon-free) and solar (which is carbon-free but not baseload). It doesn’t take a nuclear physicist to look at the options the tech companies are presented with and see why they are going with small modular nuclear reactors.
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It is also shocking that we’ve been discussing the supply/demand fundamentals here on the KER for so many years, and yet so many resource investors still have zero exposure to uranium equities or nuclear stocks. (what part of the continued clear message are people not hearing? It’s been in a bull market for 4 years now)
Uranium stocks were so beaten down by 2017-2019, that it was an insane valuation mismatch, and the bear market in the U-stocks was so much worse than the precious metals bear market. It wasn’t an “if?” question but just a “when?” question as to the eventual sector re-rating.
Coming out of the pandemic, most commodities had big moves, but the moves from March of 2020 to late 2021 in the lithium and uranium stocks were far more epic than the moves in gold or silver stocks, which is why it is important to have a diversified approach to investing in the commodities sector and not just get hung up on 1 or 2 commodities tunnel-vision. I sold out of 100% of my lithium stocks and 85% of my uranium stocks in late 2021, and said so publicly in a number of posts here in “real time,” as it was time for a rotation.
Oil and nat gas stocks had their biggest moves from spring 2020 to spring of 2022 (when the Ukraine/Russian conflict began). That was another huge move that many resource investors, that are piled in to only 1 commodity, (and often only tiny junior PM drill plays), completely missed out on. Copper stocks also had a huge run from spring 2020 through May of this year in 2024… another huge trend in the resource stocks that blew right past many resource stock investors. There are also big pops in palladium and nickel stocks a few years back that presented multi-bagger returns.
Back to uranium stocks though and the theme of this interview and blog – the U-stocks consolidated in 2022 and many folks on the internet, or even people we interviewed proclaimed that the uranium bull market was over, but it was clear as day to anyone looking at the fundamentals that there was no way the bull market was over, and if anything we were and still are in the early innings.
When many punters were giving up in despair and throwing in the towel in 2022 and early 2023, I was accumulating all my uranium positions back again just because the fundamentals were (and still are) undeniable for higher prices. Then we saw a huge run in both uranium and the U-stocks during the second half of 2023 and into early 2024, where I trimmed back 20%-30% of my portfolio positions (and mentioned it publicly many times), thinking it was getting a bit frothy again… and it was and the sector corrected. Now the uranium sector did jump back higher again this late spring/early summer, but then the uranium equities rolled over hard and had a consolidation period. Again, people came out of the woodwork on many other sites and proclaimed, (once again) that we’d seen the peak and that the uranium bull market was over. (huh?) If anything the fundamental supply/demand mismatch has gotten even better and better the last few months.
For anyone paying the remotest bit of attention to the fundamental news breaking every month for nuclear power, there is no way one could conclude the bull market in uranium stocks was over…. so I kept adding back to the positions that I’d trimmed earlier in the year. For most of September and October, the uranium stocks have been rallying once again, and just broke above key moving averages in a bullish manner. This is not a surprise for anyone that understands the megatrend still solidly in place.
Then in the last few weeks with some of the largest tech stocks on the planet going all-in on nuclear power, it has become abundantly clear that this bull market for nuclear and uranium stocks is far from over…
One of the best US uranium developers that transitioned to a producer over the last 2 years has been enCore Energy (EU), and it has been one of my more heavily weighted U-stocks the last couple years.
>> Look on the chart linked below at the pricing move from it’s low at $0.15 during the 2020 pandemic crash to the peak of $5.40 in the summer of 2021 for a 36-bagger (3,600% gain in a year and a half). Then it corrected back down to an intermediate low of $1.76 in the spring of 2023, only to ramp right back up to an intermediate peak at $5.05 this last summer in 2024 for another move of 286%. One could also consider the move from the major low at $0.15 in 2020 to the move this summer of $5.05 for the available spread over the last 4 years and there was over a 33 bagger (almost a 34 bagger) of price action there to capitalize on.
That is not saying anyone was going to catch the low or sell the high for the entirety of a position… but I was personally adding to positions in a half dozen uranium stocks in March and April of the pandemic crash, and I did trim a lot of them back in that big surge of 2021, and then reloaded in 2022 and 2023 and trimmed more back in January of this year in 2024, to catch big swaths of the meat of the moves with at least partial positions.
>> The point being there was plenty of opportunity to capitalize on in many of these US based near-term producers and producers, and it has been a very exciting sector for resource investors that took action based on all the positive fundamental drivers in the uranium sector.
enCore Energy has an aggressive growth profile over the next 5 years, going from sub 1 million pounds to 3 million pounds over the next couple years, and then up to 4-5+ million pounds of U308 about 4-5 years out. There is room to even get the production profile higher than that, but it would involve getting permits and social license in more difficult states. Still even at a few million pounds per year production, if uranium prices went from the $80s into the $100s or $120s or $140s, that would a huge boon to their revenues and cash flows.
https://cdn-ceo-ca.s3.amazonaws.com/1jl5e1j-enCore%20Energy%20chart.JPG
I see no reason why (EU) shouldn’t be a $10-$15 stock eventually, which would be a nice move from where it closed today at $3.62.
Then there is the very liquid stock (UEC) which was a developer that turned into a producer domestically here in the US, with a solid pipeline of projects also in Canada in the Athabasca basin and the largest reserved of any other US based U-stock.
UEC went from a low of $0.35 durin the 2020 pandemic crash low to a high of $8.77 just last month for a 25 bagger (2,500% gains) in just the last 4 years. One didn’t need to be fancy and pick a long-shot drill play…. UEC is the largest uranium company based on reserves in the US, was moving from developer to producer in 2 of the best states to operate (Texas and Wyoming), and it is a big board listed stock on the NYSE American (so it’s a very liquid stock).
A 25 bagger in 4 years is smoking the vast majority of the gold and silver producers over that time period multiple fold, and the fundamentals for uranium were even more bullish that gold and definitely more bullish than silver has been over that time period. Again, one didn’t need to catch the exact bottom to have had fantastic returns accumulating a good UEC position over the last 4 years, and this still will likely be 2x-3x higher from here as this uranium bull market keeps unfolding.
This is why it is rewarding to take a diversified approach in one’s resource stock portfolio across different commodities and focusing on different stages of companies with a heavier weighting in the producers, then a medium weighting in the developers, and then a lighter weighting in the riskier swing-for-the-fences drill plays. That has been a far more advantageous strategy for riding out different parts of the commodity supercycle since the pandemic bottom, rather than just plopping everything into a handful of drill plays only in 1 commodity like gold and hoping one get’s lucky and makes a life-changing economic discovery. We saw similar moves in Lithium stocks and Oil & Gas stocks over the same time period, and even times when Palladium and Copper stocks had big winning streaks, and often it was the producers and developers leading the charge as a general overview.
Again… check out the UEC chart for a thing of beauty over the last 4 years:
https://cdn-ceo-ca.s3.amazonaws.com/1jl5g7f-UEC%20daily%20chart.JPG
For those that missed it, I interviewed the Executive Vice President of (UEC), Scott Melbye, at the end of last week and he shared the value drivers, production growth profile, and key upcoming milestones and catalysts in a clear and succinct comprehensive overview of the company.
>> However the first half of the discussion was really all about the many constructive tailwinds for nuclear power, and the bullish supply/demand set up for the uranium equities, particularly North American developers and producers.
(UEC) Uranium Energy Corp – Growing US Production Profile And A Diversified Canadian Development Portfolio
https://www.tradingview.com/x/cTYkIqJ5/
NatGas : Will it Bounce or Close?
I’m looking for that seasonal push higher in nat gas for the winter months when home heating is a big demand driver. Also LNG terminals in the US and Canada will help with export demand.
FREAKY FRIDAY AGAIN…………………. 🙂
May as well go with uranium… silver is stuck in a rut…..
Lilly and the fat pill is tearing up silver…. this past two years….
Silver is way behind, .. all part of the plan to keep the Sheeple clueless…. JMO
We will always have the poor with us….. KJV…..
Have a great WEEKEND…..
Hi OOTB – I do believe silver will put on it’s dancing shoes in 2025.
Actually silver had a pretty good 2024, making it up to $35 again for the first time in over a dozen years. So it was a year of solid progress, but just not a $50 breakout year that some commentators were expecting.
Lots of silver stocks had nice moves higher by 50%-100%+ durung the go-go months…
Hello Ex………. thanks for the reply…….
I’ve taken the simple Canadian route and started to invest in Dennison Mines, DML.to
Denison is a quality company with solid assets and a savvy management team. I hold a good weighting to it as well, as it will be the next Canadian company in the Athabasca Basin to make it into production in a couple of years.
I have been an owner of Mega Uranium, MGA.to, but am looking to get back in.
Mega looks set to jet…
My number is 35 cent level for buying in if I have the money.
I was also impressed with Denison choosing Cosa Resources to partner with on advancing a few of their exploration projects that they’ve not had the time or resources to go after. A very good fit IMO.
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Cosa Resources – Joint Venture w/ Denison Mines- 3 Uranium Properties In The Eastern Athabasca Basin
MacroVoices #457 Justin Huhn: The Fundamentals For Nuclear Keep Getting Better
China Could Approve 100 New Nuclear Reactors by 2035
By Tsvetana Paraskova – OilPrice.com – Dec 04, 2024
“China could keep the pace of approving at least 10 new nuclear reactors over the next 10 years, a domestic industry group says, as the country has been accelerating the approval and construction of nuclear power plants over the past few years.”
“China could commit to a ‘realistic target’ of 10 new approvals each year through 2035, Tian Jiashu, deputy secretary-general of the Chinese Nuclear Society, said at the BloombergNEF Summit in Shanghai this week.”
https://oilprice.com/Latest-Energy-News/World-News/China-Could-Approve-100-New-Nuclear-Reactors-by-2035.html