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Nick Hodge: You Ain't Seen Nothing Yet from Uranium

At this year’s New Orleans Investment Conference, which was held earlier this month, the Investing News Network sat down with Nick Hodge, founder of the Outsider Club, to discuss the current resource market with a particular focus on uranium.

Despite uranium performing well for most of the year, the current price is still well below what is needed to start new projects and even make the current uranium projects lucrative.

The uranium analyst noted that uranium ETFs are down roughly 20 percent making it the ideal time to get in on some energy stocks that are likely to gain value in the coming years.

“I think you’ll see a lot of selling between call it now Halloween 2018 and when we eat turkey later this year, and so cheap assets that are quality are only going to get cheaper and that’s the time that I would be looking to buy them,” Hodge said.

The spot price of uranium has steadily trended up for the majority of the year, save for a tiny period in June when the price slipped slightly. Currently, the spot price of U3O8 is US$29.10, an almost US$7.00 increase since July.

While the spot price has continued its upward trajectory it will need to gain at least US$15-US$25 dollars to entice miners and explorers to restart production and discovery.

Hodge credited the steady incremental rise to a variety of factors, including a depleting spot surplus as the motivation behind the price growth.

“But look, you ain’t seen nothing yet because again nobody’s making money at that price, you still need US$60, US$65, US$70 uranium to make money and we’re just not there yet,” he said.

He believes the dwindling surplus will force the price up as uranium consumers look to meet their regular and growing demand.

“I think at some point it’s going to be like getting hit by a freight train when the utilities come back into the market — a very rapid ascent,” Hodge added. “I think they [utility companies] buy in the spot market until they can’t and then you’ll see some sort of dramatic rise in the uranium price.”

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MARKET SUMMARY

INDICES

Name Last Change
DOW 23688.80 0.40%
S&P 500 2552.57 0.26%
NASDAQ 6785.50 0.47%
TSX 14407.97 0.31%
TSX-V 543.16 0.00%

Resource Commodities

Name Last Change
Gold 1249.39 0.30%
Silver 14.64 0.00
Copper 2.75 0.010
Platinum 791.00 0.18%
Oil 49.88 2.65%
Natural Gas 3.53 8.48%
Uranium 28.63 0.00%
Zinc 1.17 0.00%

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