This company just added fuel to burning uranium fire
(Kitco News) - After a spot uranium buying spree launched by the Sprott Physical Uranium Trust, another uranium player announced significant uranium purchases.
Uranium Royalty (NASDAQ: UROY, TSX-V: URC) reported today that it is entering into contracts for three additional spot purchases totaling 300,000 pounds of U3O8 at an average cost of US$38.17 per pound U3O8.
The company said that deliveries are scheduled for September/October 2021 and will be accomplished through book transfers to URC’s storage account at Cameco Corporation’s Fuel Services facilities in Ontario, Canada.
Following completion of these deliveries, the company said it will hold a physical inventory of 648,068 pounds U3O8 at a weighted average cost of US$33.10 per pound.
In its statement, the company pointed out that the latest Trade Tech daily spot price is at US$45.00 per pound as of September 14, 2021, leading to an increase in the net realizable value of Uranium Royalty's physical uranium holdings by US$7.7 million.
The company added that it is within its mandate to make periodic purchases of physical uranium to provide attractive commodity price exposure to shareholders, especially in these early stages of a bull market in uranium.
This is the 5th year of the production/consumption gap which has had a positive impact on drawing down excess market inventories, the company noted. The purchasing activities of producers and financial entities, like the Sprott Physical Uranium Trust have accelerated this rebalancing as of late, resulting in a 49% rise in the spot price in the past five weeks.
Uranium Royalty is the world’s only pure-play uranium royalty company and the only uranium focused business on the Nasdaq. The company is focused on gaining exposure to uranium prices by making strategic investments in uranium interests, including royalties, streams, debt and equity investments in uranium companies, as well as through holdings of physical uranium.