Resource World Magazine

40 www.resourceworld.com A P R I L / M A Y 2 0 2 0 URANIUM AFTER YEARS OF NOT DOING too much, a rebound in the price of uranium from about US $23 per pound has triggered a bull market in uranium stocks. On April 15, uranium was US $31.30 per pound, up over 32% in the past month. So what is driving the higher uranium prices? Craig Parry, CEO of IsoEnergy Ltd., told Resource World that "the market has been dramatically under-supplied for the past few years. The annual global demand for uranium is about 190 million pounds and up until about four weeks ago, global produc - tion was about 120 million pounds a year. There were stockpiles out there that put a cap on the price. The situation worsened with temporary but indeterminate produc- tion curtailments at Cameco's Cigar Lake, the biggest uranium mine in the world, and the McArthur River/Key Lake mines as well as a 20% reduction by Kazatomprom that will be in effect until 2021." Parry added, "I think that we will see much higher uranium prices as that prod- uct disappears from the market and utilities can't get their hands on nuclear fuel. Both Cameco and Kazatomprom have been look- ing to reduce production for some time because they were losing money and I think the COVID-19 pandemic was the trigger. Uranium companies want the price to rise to a level where they can make a profit." When production resumes, will the ura - nium price fall back? "First, the industry has to work through the stockpiles. The bulk of uranium sales are by long term contracts and producers want contracts of not less than US $50 per pound. I don't think the uranium price will fall back because the 120 pounds of production per year is not nearly enough to satisfy demand, said Parry." Another factor is the buildout of nuclear reactors – there are currently 54 under construction around the world – that will require long term supplies of uranium once they are up and running. There is a growing consensus that nuclear energy, generated by large and small reac - tors, can help many regions of the world, including Canada, to reduce carbon emis- sions and move away from non-renewable energy sources like coal. (see sidebar on floating nuclear power plant). "It is why industry officials, including CanAlaska Uranium Ltd. [CVV-TSXV, CVVUF-OTCQB, DH7N-Frankfurt] Pres- ident, Peter Dasler remain optimistic about the future. The uranium industry has been strug - gling since a 2011 earthquake and tsunami in Japan disabled three reactors at the Fukushima nuclear plant, causing their cores to melt down, forcing Japan to shut down 50 nuclear reactors that remained intact. The devastating repercussions in Japan sent uranium prices tumbling from US $72.63 a pound, and convinced some New uranium bull market underway by Peter Kennedy

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