Only Pure-Play Uranium Royalty Company Steps-Up

by Mike Fagan

Mike Fagan

Uranium Royalty Corp. (TSX-V: URC)(OTC: URCCF) — currently trading right around C$4.00 per share and the first-and-only pure play uranium royalty company in the space — has exercised its option to purchase US$10 million of physical uranium starting at an opportunistic price of US$28.73 per pound, or ~7% below the current U3O8 spot price.

The move by Uranium Royalty to acquire 348,068 pounds of US-warehoused U3O8 is in-step with the company’s major shareholder — Uranium Energy Corporation (NYSE: UEC) — which is making similar physical uranium purchases totaling 1.4 million pounds U3O8.  

Thus far, the market reaction has been favorable:

  • Uranium Royalty has jumped from C$1.20 to C$4 per share in the last 4 months
  • Uranium Energy has leapt from US$0.80 to US$3 per share in the last 5 months

Uranium Royalty CEO, Scott Melbye — whom you’ll be hearing more from in just a moment — commented via press release:  

"We are pleased to announce this exercise which gives URC an initial direct uranium stake at an opportunistic price that is below the most recent spot price of US$30.75 (TradeTech) in what has been a strengthening uranium spot market.  This decision is in line with our goal of gaining exposure to uranium prices through sector-focused investments and it clearly demonstrates the value of our strategic Yellow Cake investment. In addition to this optionality, we also hold a 5.9% stake in Yellow Cake, which itself announced this month that it is acquiring an additional 3.9 million pounds of U3O8, bringing its total holdings to 13.2 million pounds (prior to our exercise). The addition of this direct physical uranium interest further diversifies our unique uranium-focused portfolio and adds a valuable asset to the balance sheet. As of March 29, 2021, we have approximately $46 million in cash and listed securities. Together with our recently announced proposed acquisitions of royalty interests in the McArthur River and Cigar Lake mines, we believe we are uniquely positioned to benefit from further improvements in the uranium market."

For speculators, Uranium Royalty is the first company to apply the successful royalty and streaming business model exclusively to the uranium sector. And in a rising market for uranium, and with a market cap below C$275 million, the company is certainly one-to-watch in the junior space.

Our own Gerardo Del Real of Junior Resource Monthly caught up with CEO, Scott Melbye, for an in-depth discussion on all-things Uranium Royalty. You can listen (or read) the interview here. Enjoy!

Also, click here to access our brand new report on Uranium Royalty Corp.

Yours in profits,

Mike Fagan

Mike Fagan
Editor, Resource Stock Digest

Mike Fagan has mining in his blood. As a teenager he staked countless gold and silver properties in Nevada alongside his dad, Brian Fagan, who created the Prospect Generator model that’s still widely used today in the resource space. One of those staking projects was put into production by a major Canadian mining company — a truly rare and profitable experience. That background uniquely qualifies him as a mining stock speculator. One of the most well-known names in the business, Mike is now putting that experience to use for the benefit of Resource Stock Digest and Hard Asset Digest readers.