Uranium continues to be the gift that keeps on giving for investors. Our own position in UK-listed Yellow Cake LON:YCA is one of our best performers on a YTD basis. If you’re in North America, don’t take your eyes off Uranium Royalty Corp TSX:URC either. The stock is fairly volatile, but up 28.55% YTD and that’s with a slump in the summer.
On a six month basis, if you’d bought into Uranium Royalty in the summer you’d be up nearly 50% on the stock. There are a number of strong uranium plays in the market right now, and this is looking like one of the better ones. I’ll touch on some of the others later in the article.
Uranium Royalty Corp, listed in Canada, makes strategic investments in uranium interests which can take a number of shapes, including traditional mining royalties, streaming, debt and even equity stakes in uranium companies.
The company announced the sale of 10.2m shares at C$2.94 to a syndicated of underwriters led by BMO Capital Markets to help it to fund future purchases of physical uranium and provide a war chest for further acquisitions in a white hot market for uranium assets.
Shares in the company in July were promoted from the TSXV onto Canada’s main TSX exchange. Uranium Royalty is also the only pure play uranium stock currently traded on NASDAQ.
Uranium Royalty Corp portfolio
Uranium Royalty Corp was the first company to apply a successful royalty and streaming business model exclusively to the uranium sector. Unlike a vanilla miner, it maintains a strong balance sheet which is fed from its accretive royalty and streaming positions. Like The Armchair Trader, it has also acquired exposure to the uranium price and physical uranium via purchases into Yellow Cake.
The company’s current portfolio includes interests in 18 development, advanced, permitted and producing uranium projects across multiple jurisdictions. Significantly, the company has royalities on world class uranium projects like Cigar Lake and McArthur River.
The asset portfolio is truly world class, with mines in Canada, the US and Australia.
The case for uranium still looks strong, with industry insiders regularly explaining that there is no road to net zero for the planet that does not go through uranium. Governments are starting to become more aware of the requirement for nuclear power, even as a bridging option for economies as other clean energy sources are coming onstream. Uranium’s spot price is reacting to this demand now.
The uranium price is also driving other shares higher, some of them obviously less diversified than Uranium Royalty Corp. Uranium Energy Corp [FRA:U6Z] is up a punchy 95% in the last six months. Uranium miner Cameco TSX:CCO is up over 52%. Denis Mines Corp TSX:DML is up 5.70% over six months, with some correction in the last couple of weeks.
A lot of these stocks hit relatively recent highs in the spring of 2022, having picked up speed over 2021. There was subsequently a reversal of interest in many uranium stocks in the second half of 2022, going into Q1 of this year. That now seems to be reversing.
