Do U Dare to Dream?
Comment of the Day

June 27 2022

Commentary by Eoin Treacy

Do U Dare to Dream?

Thanks to a subscriber for this report focusing on uranium, from BMO, which may be of interest to subscribers. Here is a section:

Playing Into a Number of Pertinent Thematics: The global push for energy independence following Russia’s invasion of Ukraine has provided a tailwind for uranium expectations, as nuclear build-outs are back in vogue. The role of uranium, and wider nuclear technology, in a low-carbon global economy is becoming ever clearer and is driving significant research and development into the next generation of technologies, just as happened with solar power around 2010. Given this pathway, we believe the uranium price will ultimately have to rise to necessary levels to stimulate the increased production required to match growing demand needs; hence, we have increased out L/T price to US$58/lb, from US$50/lb. Furthermore, government strategy in the U.S., potential Chinese exports of the Hualong reactor technology and development of small modular reactors (SMRs) all have potential to see demand surprise on the upside relative to our base case.

Eoin Treacy's view

Sprott’s decision to enter the uranium market as a major buyer resulted in a major breakout in September 2021. The price quickly jumped from $11 to $20. Since then it has returned to unwind most of that advance.

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