Today’s featured company is a simple story. It’s a uranium play.
For those of you who have dabbled in
the markets for any length of time you may recall that when uranium
gets hot interest in companies pegged to yellow cake soars. This is
hardly breaking news, just a simple and reflexive approach to
market activity and the spot price.
For many, uranium companies like
Generation Uranium Inc. (TSXV: GEN)
(OTCQB: GENRF) (FRA: W85) present an opportunity to
play uranium. Unlike gold or other metals, you can’t stick
Krugerrands or shiny bars of uranium in that secret spot behind the
family portrait.
Uranium affords no such proximity.
So, when headlines like those below
adorn the newsfeeds of 2024, publicly traded companies present some
exposure to the phenomenon at hand. But first a few headlines and
links:
Bloomberg: Deadly and Wildly
Profitable, Uranium Fever Breaks OutThe radioactive
metal’s price is up 233%, revealing the speed at which the world is
embracing nuclear power once again. Source.
Forbes: U.S. Ban Could Spark
Another 60% Hike In The Price Of Uranium-------
Source.
Hopefully, venerable
Forbes and Bloomberg meet your journalistic standards.
Back to Generation
Uranium, because, well, the Company is paramount in the success
algorithm. It is easy to jump into a white hot industry and stake
your claim literally or figuratively. That certainly doesn’t mean
you’re going to succeed.
The Company has an exceptional
Investor Presentation here and we strongly encourage you to check
it out because A) it speaks quite well to the overall opportunity
and momentum for uranium and B) how the Company is looking to
execute in this opportunity.
Here are a couple points worth noting,
paramount among them is that there appears to be significant
interest in the power and efficiency of nuclear energy, energy that
is reliant on yellow cake/uranium.
From the deck:
“The world needs more
nuclear to achieve a low cost, reliable and greener future of
energy and Canada is the second largest producer of Uranium in the
world at 15%, behind Russia friendly Kazakhstan which produces 43%
of the world's supply.
“Canada is home to the
Athabasca Basin and the Thelon Basin, two of the highest-grade
uranium districts in the world. Global Yellowcake supply is set to
reach 145M lbs in 2024, but demand is already at 180M lbs,
representing a roughly 35M lbs deficit.
“The World Nuclear
Association expects demand to nearly double to 300M lbs by 2040.
Nuclear Power needs to triple by 2050 to meet the Paris Accord goal
of global temperature reduction.
“As of January 2024
there are around 60 nuclear plants under construction with another
110 planned (2) In 2022, global energy consumption was 31.6% from
oil and 26.7% from coal while nuclear was only at 4%. A push for
more reliable and greener energy at a low cost paves the way for
significant nuclear energy growth.”
Ok, that’s the
opportunity in the sector with a nod to Mother Canada which is both
well-positioned with uranium and geo-politically stable. Times of
war such as the Ukraine/Russia conflict remind us how important
this component is.
But the deck goes on
to eloquently lay out the opportunity that Generation Uranium is
putting forth. The pitch is pretty concise and clear.
The Company is
well-positioned with positions in multiple locations to capitalize
on the enthusiasm for nuclear energy, a greener future, and
affordable power.
Again, from the
deck:
“In an era where the
quest for sustainable and reliable energy sources intensifies,
Generation Uranium emerges as a beacon of potential.
“At the heart of our
mission lies the untapped riches of the Thelon Basin, poised to
redefine the uranium market. Our strategic position,
underscored by robust historical data and promising geological
forecasts, sets the stage for unprecedented exploration
opportunities.
“Join us as we embark
on a journey to harness the power of uranium, fueling a greener
future and offering a unique investment horizon. With Generation
Uranium, you're not just investing in a company; you're investing
in the future of energy.”
It’s more than just
those catchy tag lines. The company has to perform, bring goods to
market and tell their story to an investing public that is clearly
enthusiastic about yellow cake. If it can perform into this
white-hot market the rest can and should take care of itself.
Public companies like
Generation Uranium can certainly provide investors with a chance to
hold their own ‘piece of (yellow) cake' if you will, as the company
earns their trust and interest with the execution of a well-thought
out business plan in one of the hottest industries on the
planet.
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