The spot price makes uranium an emotional commodity. It shouldn’t but it does. When I first entered the uranium sector the spot price was $7 per pound. A few years later, a string of reactor lifetime extensions and low uranium inventories pushed the spot price up to $140 per pound. In both cases, investor perception was heavily involved. However, the spot price has very little to do with how most uranium is bought and sold. For that, you need to look at the long-term contract price. That price is not only higher but is influenced by the market fundamentals.
China, Russia, India, the US, South Korea, Argentina, Brazil, France, Finland… they are all building reactors. Even UAE, the home of big oil, is building nuclear reactors. In fact, there are more reactors being built than before Fukushima. Demand is growing and will continue to grow. Fact.
At the same time, supply has been impacted by high-profile delays to international production and the end of the HEU contract. Fact.
Now let’s look at the fundamentals of our asset at PLS. High-grade, shallow depth, the most stable pro-uranium mining district in the world. We have the most exciting uranium discovery out there and it will continue to grow. Fact.
I’ve been in the uranium sector since 1996. Fluctuations in the spot price mean Uranium will remain an emotional commodity but it will also remain one with strong underlying market fundamentals. As we complete our remaining analysis of a drill program that has extended our strike length to 2.24km, connected four high-grade zones and discovery a new zone with a 465m step out, it’s worth remembering the market and company fundamentals we are operating in.
Dev Randhawa, CEO of Fission Uranium
