Dec. 9, 2021
Uranium Royalty Corp. (TSX-V: URC)(NASDAQ: UROY) — currently trading around C$5.10 per share and the first-and-only pure play uranium royalty company in the space — has entered into a supply agreement with CGN Global Uranium Limited to purchase 500,000 lbs of U3O8 from CGN between 2023 and 2025.
The accretive transaction provides URC shareholders with increased leverage to physical uranium at a time when prices are anticipated to rise due to a fundamental supply/demand imbalance and increased long-term contracting by utilities.
Upon final delivery, the company will hold a total of 1,548,068 lbs of U3O8 at an average cost of $40.89/lb. Uranium is currently trading at approximately $46/lb.
Uranium Royalty CEO, Scott Melbye, commented via press release:
“In addition to attractive pricing, this strategic supply stream will provide URC with access to physical uranium in a timeframe, 2023-2025, where industry analysts forecast large 45-50 million pound annual supply deficits between production and reactor requirements at a time utility procurement volumes are expected to return to higher levels. As payment is made at the time of delivery, it requires no cash outlay today. This transaction establishes another key relationship with one of the world's leading nuclear energy companies, which combined with our existing Kazatomprom supply options through Yellow Cake Plc, positions URC with access to world-class, flexible, uranium supplies.”
In just two short years post-IPO, URC has quickly 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.
With all the pertinent boxes checked — including a large, growing base of physical uranium holdings — Uranium Royalty Corp. is well-positioned for growth in what’s shaping up to be an historic uranium bull run as utilities begin entering the market to secure long-term U3O8 contracts.
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Editor, Resource Stock Digest