It is my belief that nuclear energy can be part of the climate change solution while mitigating an impending energy crisis. There is little doubt that reactors are being built and that more uranium will be needed. So why aren’t uranium juniors in demand?

  • There is too much uranium supply. Even Cameco suspended operations at McArthur due to cheap supply from Kazakhstan. Who really understands Kazakhstan’s supply curve? 
  • Technology will be the enemy of uranium demand. Check out future disruptors such as Terra Power’s Traveling Wave Reactor which utilizes depleted uranium for fuel.
  • The concentration of scoundrels in this resource subset is greater than in the junior resource markets as a whole. Experienced investors are learning to avoid these folks by avoiding the uranium space. 
  • Why invest in uranium when there are higher conviction trades available?

Having said all that, I think that there is a short term trade here. Nexgen Energy owns high quality assets in a good jurisdiction. I don’t pay much heed to technical analysis, but I would like the rounding bottom if I did. This is usually a favourable time of year for this sort of trade. I will pull the plug on a 20 to 30 percent gain for this Speculation as I don’t see an incentive for executives to engage in M&A.

Bought tranche at $1.35 (USD).

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