Categories: Energy / Mining Stocks
Topics: General Energy / Uranium Stocks

Uranium Royalty Corp. (TSX: URC)(NASDAQ: UROY) CEO Scott Melbye on Building a Globally Diversified Royalty Base in Uranium’s Strongest-Ever Bull Market

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Uranium Royalty Corp. — Mr. Scott Melbye. Scott, how are you today, sir? Good to have you on.

Scott Melbye: Gerardo, it's always good to be on with you. Exciting times in politics nationally here in the US but also in the uranium market. It just continues to be exciting news day after day.

Gerardo Del Real: Let's get right into it. Obviously, we had an election, a fair and square election. We chatted a bit off-air, and there's a lot of momentum right now in the US for, hopefully, expedited permitting, less red tape, a more business-friendly approach, and cheaper capital. We'll see how many of those things actually play out but there's definitely excitement and momentum now that the election is behind us.

I want to talk about Uranium Royalty acquiring the existing royalty that you just announced about a week or so ago. But before that, I've got to get your macro take now that the election is behind this in terms of how you see and how you hope that the next administration partners with companies like Uranium Royalty, like the UEC's of the world, like other companies that are North American-based and have significant exposure to assets that can really help revive an industry that's long been dormant here in the US.

Scott Melbye: Yes, the nuclear industry and uranium are in a fortunate position. No matter who won on Tuesday, nuclear is part of the energy policies of both parties. Democrats get there for a different reason than Republicans but that's okay. They both realize that nuclear power is an important part of the mix.

I think in a Trump administration, clearly, the electricity sector and the energy dominance Trump speaks about will be powered by natural gas and nuclear. In talking to a lot of the advisors and transition team people, that was the case in his last administration and certainly will be going forward.

We're also facing the reality that our energy demands have suddenly increased exponentially, particularly electricity. Our society has become more electrified, more high-tech — EVs, data centers, etc. And now, the AI demands on data centers could consume 10% to 20% of our electricity in the coming years. So the Amazons, Googles, Microsofts coming into the industry buying output from existing reactors or building small modular advanced reactors — it's a very exciting time.

I know the FERC (Federal Energy Regulatory Commission), not surprisingly, ruled against the Talen-Amazon nuclear power plant output interconnection agreement in Pennsylvania but I think that's not a negative as much as it is that it recognizes the value of that nuclear power plant. 

I think the FERC is reserving it for the broader public and the grid rather than allowing a company to kind of siphon that off before it hits the grid. So the point is, nuclear power is valued and it's going to need a lot of uranium. Uranium Royalty; UEC; ideally positioned.

Gerardo Del Real: I couldn't agree more with those sentiments. I'm glad to hear your take on the ruling and the justification for it. It wasn't a dead-on-arrival type of situation. I think a lot of people that maybe just scrolled through the headlines took it that way, right?

Scott Melbye: Yep, and the reality is that the tech industry is fully engaged. I'm attending a conference in California this week that's entirely focused on nuclear energy for the tech industry. We're in a new phase, a historic phase, for nuclear power. 

We need a lot of uranium. We went through a 12-year bear market where we missed investment cycles and exploration and mine development. So whether it's UEC building mines in Texas, Wyoming, and Saskatchewan, or it's Uranium Royalty that's investing in global mines across Africa, Australia, Canada, US, and anywhere where there's uranium, we want to be invested.

And I think our latest acquisition of the Millennium and Cree Extension uranium projects  — a 10% royalty on a 20% interest on those projects — we're really excited for. It was a C$6 million investment to get those royalty interests. 

Why is Millennium important? Well, Cameco has identified the project as one of their key pipeline projects. Obviously, they're focused on McArthur River and Cigar Lake to get full increased production at those two mines, of which Uranium Royalty owns royalties on both those projects. 

And now, we have a royalty on one of their biggest pipeline projects. It's 75 million pounds at an average grade of 2.39% U3O8 Indicated resource, and another Inferred resource of 29 million pounds U3O8 at a 3% grade — so it's one of the largest undeveloped projects globally.

Cameco has not announced or identified the development timeline and startup timeline on that. It is a pipeline project for them. But I think for Cameco, as you saw on their earnings call today, they are not having any problem selling uranium under long-term contracts to global utilities. So as they fill up the capacity of Cigar Lake and McArthur River, they're going to start to turn to their pipeline. And we hope that Millennium is high on their list of development because we just love having this royalty exposure to the project.

It's a net profit interest (NPI) of 10% on a 20% interest in the project operated by Cameco in a joint venture with JCU. So a great, great project, and we’re happy to have it in the portfolio. 

We want to just continue these kinds of acquisitions, and we're scouring the planet for existing royalties like this and very actively providing project financing proposals for new mine development that will result in royalties or streams ending up in investors' portfolios.

Gerardo Del Real: Excellent. What comes next for the rest of the year, and what comes next in 2025? I know, obviously, you've been very, very busy lobbying, if we want to call it that, but definitely advocating for nuclear, advocating for Uranium Royalty, and advocating for UEC. What comes next?

Scott Melbye: For Uranium Royalty, what we see in terms of new mine development that's needed, the low-hanging fruit are the existing mines that are already permitted and in many cases have already been built with infrastructure. 

So it's not surprising that Boss Energy’s Honeymoon Mine — and the Langer Heinrich Mine (Paladin Energy, 75% interest; CNNC, 25% interest) of which we have a royalty on — or US mines like UEC's, those are the fastest movers and are moving forward. 

But we need five or six more new mines beyond that to be producing by 2030. Beyond 2030, we need a whole host of new mine operations so we really want to be a capital provider at Uranium Royalty Corp. to finance that next generation of mines. 

So I will be traveling, as I've said, to Africa and Australia, talking to all of the North American producers and seeing if we can provide that capital. And investors in URC/UROY will end up having a growing portfolio of diversified uranium interests through the royalties and streams.

Gerardo Del Real: Exciting times and transformative times both in the country politically and economically and, as well, in the critical metals space… and most definitely in the uranium space. Scott, looking forward to chatting again soon. Safe travels, and thank you as always for your time.

Scott Melbye: Thank you very much, Gerardo. Take care.

Gerardo Del Real: Alright, you as well.

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