Sept. 28, 2021
Uranium Royalty Corp. (TSX-V: URC)(NASDAQ: UROY) — currently trading around C$5.00 per share and the first-and-only pure-play uranium royalty company in the space — has entered into contracts to purchase an additional 300,000 pounds of U3O8 at an average cost of US$38.17 per pound.
The drummed physical uranium will be stored — along with the company’s additional ~350,000 lbs — at Cameco’s fuel services facilities in Ontario, Canada. Upon delivery, the weighted cost of URC’s total stored uranium holdings will be approximately US$33 per pound.
If you’ve been watching the headlines, you know that the price of uranium has been on an absolute tear this year, rising from US$25 per pound in February to currently 9-year highs just above US$50 per pound. And prices could head a lot higher still as utilities come roaring back into the market to secure U3O8 contracts.
To that end, URC’s timely and ongoing investment in physical uranium is quickly proving lucrative with the company now sitting on C$80 million in cash, marketable securities, and physical uranium. Not bad for a junior resource firm that’s only been around since late-2019.
On top of that, in its relatively brief trading history, URC has amassed a geographically diverse portfolio of uranium royalties, including royalties on Cameco’s McArthur River and Cigar Lake mines — the two largest high-grade uranium mines on the planet.
And just last week, the company added former head of Bank of America’s Metals & Mining Investment Banking, John Griffith — who has advised on more than US$60 billion of successful mining transactions including Goldcorp’s 2019 merger with Newmont — to its board. That addition will no doubt prove valuable in supporting URC’s growth initiatives going forward.
Also last week, Canaccord analyst Katie Lachapelle reiterated her “Speculative Buy” rating on URC shares citing, in part, the company’s robust uranium purchases in the open spot market in a rising price environment.
With all of the pertinent boxes checked, Uranium Royalty is well-positioned to participate in what’s now shaping up to be a historic uranium bull market, which our own Gerardo Del Real of Junior Resource Monthly has been calling for some time.
Gerardo has a lot to say about the uranium sector and how to position for near-term gains. He cautions that it’s a market that always eventually overshoots… so the idea is to get in fast and get out relatively fast as well… with a much fatter wallet to-boot!
Gerardo has a brand new uranium recommendation out to his JRM subscribers — click here to watch a brief video presentation on this undiscovered uranium junior with an impressive asset base on US soil.
Also, click here for our feature report on Uranium Royalty Corporation.
Yours in profits,
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Editor, Resource Stock Digest