Uranium spot price is now over US$34 per pound — the highest level in half a decade, asserts Nick Hodge, editor of Early Advantage, an advisory service that specializes in lesser-known opportunities in the resource and commodity sectors.

The spot price has climbed by 36 percent since January, steadily moving higher as diverse factors impact near- and long-term supply and demand trends.

Not only is ~50% of global primary supply offline because of the virus, but it’s going to take much higher prices to get that back online — sort of like how not all the jobs are going to come back right away. 

We also now have clear direction in the U.S. from the Nuclear Fuel Working Group as a result of the Section 232 petition, starting with US$1.5 billion earmarked to create a new National Uranium Reserve. 

I think higher prices beget higher prices, especially once the utilities come back in, because the reason why prices can move so high so quickly in the uranium space is because utilities really don’t care what they are paying — because the price of the uranium is such a small component of building and operating and maintaining a nuclear plant.

Uranium Reserve

Uranium Energy Corp. (UEC) is below its buy-under price of US$1.50. CEO Amir Adnani has been out waving his arms in light of the recent bullish action in the sector.There are only a few companies capable of producing uranium in America. UEC is one of them. The stock is a buy.

Energy Fuels (UUUU) is a buy under US$3.00. Not only is it the other company that can produce, but it also has a mill and is increasingly moving into other sub-sectors of the market, which I think will allow it to profit from the full breadth of the coming bull market. 

It recently acquired fission neutron (technology and equipment from GeoInstruments. Diversifying revenue streams is something I like. Energy Fuels also has US$48 million in cash, securities, and inventory, which includes over half a million pounds of uranium. 

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