Nations around the world are racing towards clean energy goals, but many are forgetting about one key component that could make net zero goals more feasible. When it comes to carbon emissions, nuclear energy equals and sometimes even outperforms renewable energy sources.
Yes, renewable energy sources like wind and solar are the end goal, but uranium is an essential element in achieving global decarbonization goals.
Why? Because nuclear energy doesn’t directly contribute to greenhouse gas emissions and climate change,and it runs 24/7,meaning it is one of the cleanest, most reliable forms of power generation in existence.
The 2011 Fukushima tragedy caused the uranium market to tank, and up until recently, low energy prices have disincentivised further investment in aging power plants.
However, sentiment towards uranium is continuously shifting, with several countries (including Japan) rethinking their nuclear energy policies.
Even Tesla CEO Elon Musk said that limiting the use of nuclear energy "is insane from a national security standpoint & bad for the environment to shut them down."
And according to a recent market report from The Oregon Group, a uranium bull market is on the horizon.
The Oregon Group is an investment research company that was founded by independent capital markets experts, Anthony Milewski and Justin Cochrane.
Milewski has two passions: the outdoors and investing. At any moment you might find him skiing in France, fly fishing in Alaska, white water rafting in Oregon, or wide awake in the middle of the night analyzing news releases and financial statements.
He realized early on that a truly rewarding career needed to include following his passions. But how to do this? As a Fulbright scholar, he spent time in the former Soviet Union and saw firsthand the changes brought about by the privatization of vast swaths of the regional economies. He also noted the great potential in building companies on the back of these changes and, for a time, was employed by Renaissance Capital in Moscow, Russia, working with entrepreneurs and natural resource companies. Upon graduating he took a job at New York based Skadden, Arps where he became immersed in commodity transactions. Milewski would later transition from Skadden to Firebird Management in New York where he worked in the Global Macro funds.
His time at Firebird had a profound impact on his investment style. He realized that you can “get a call right” but the “timing wrong.” Investing is about understanding the themes and ideas that shape our world, environment, and capital markets. It was this realization that helped to shape his views on identifying themes, thinking about liquidity, and ultimately making successful investment decisions. No one ever lost money selling for a gain! After Firebird he went on to work with other major funds as a c-level executive specializing in global origination and investment processes. This time cemented his views on risk mitigation and liquidity.
After years in the asset management business, Anthony realized it was time to strike out on his own. Along with his business partner, Justin Cochrane, he founded and took public several companies. To date, he has helped raise over a billion dollars for listed companies on various exchanges around the globe. In a sense, this was Act Two of his career.
All told, Anthony has served as a founder, advisor, director, executive and investor. He now pursues investment ideas that make money and make the world a better place. That might mean investing in nickel as key ingredient in batteries, carbon as a way of saving forests, copper for the electrification of things, artificial intelligence to help reduce the impact of farming on our environment — the list goes on.
In short, Milewski is no stranger to the industry, and because of his strong track record in the space, his opinions about the market are definitely worth paying attention to.
The Oregon Group Predicts a 10-Year Uranium Bull Market
Milewski and The Oregon Group are forecasting a significant net increase in nuclear reactors that use uranium as fuel, which will favor the uranium market.
The report "The Start of the Uranium Bull Market and the Coming of the Second Atomic Age" takes a deep dive into some of the major factors that have contributed to this expansion, including decarbonization, the commercialization of small modular reactor technology, and energy security.
Not to mention, an analysis of the uranium market shows a significant decline in current global stockpiles, a lack of production in the near future, and the possibility of a supply shortage.
Here are some of the report’s highlights:
The 10-year downturn in the uranium market, during which time mines were shut down, development projects put on hold, and many exploration companies ran out of money, has now come to an end. Mining restarts are being announced as uranium prices rise. But because of dwindling reserves and grades at existing producers, and a dearth of advanced development initiatives, supply won't be sufficient to meet demand in the near future. Producers have categorically declared that considerably greater incentive pricing is necessary for new production.
The European Union recently designated nuclear energy as green energy, opening the sector up to multibillion-dollar green financing. Uranium is one of the most energy-dense fuels available, and it is used in nuclear reactors to generate clean energy. The same factors have primarily contributed to the global shift in public opinion in favour of uranium and nuclear power. This is particularly evident in Japan, where most of the population now supports restarting the country's reactor fleet.
On the supply side, the industry is still struggling to recover from a decade of underinvestment. As a result of mergers and acquisitions, and warnings from leading producers that prices must rise further to incentivize new production, uranium equities have increased in value over the last two years. However, there is a lot of growth still to come.
Based on the data, long-term growth in nuclear energy appears to be assured. Changes in global sentiment – both government and public – in favor of nuclear energy, numerous new build announcements, life extensions for existing fleets, and commercializing SMR technology all contribute to power growth.
The Oregon Group believes uranium prices, particularly the term contract pricing through which most uranium is bought and sold, still have a long way to go before peaking. Equities will rise in tandem with them. While the influx of newly listed companies (particularly explorers) makes it more difficult for first-time uranium investors to identify de-risked, high-reward stocks, the report highlights that there are still many opportunities at various risk levels, with appealing entry points.
"The Start of the Uranium Bull Market and the Coming of the Second Atomic Age" provides deep insights into this exciting industry and outlines the major trends that are expected to keep prices elevated for the long term. The report also includes a list of uranium stocks and exchange-traded funds (ETFs) that are worth considering and why.
In summary, it may be the ideal time for investors to pay attention to this market as we are in the early stages of what might be a long-term uranium bull market. This study is an invaluable and comprehensive resource to help you get started.
Click here to read the full version of The Oregon Group’s "The Start of the Uranium Bull Market and the Coming of the Second Atomic Age" today.
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