The good news for uranium companies is set to continue, said Rick Rule, president and CEO of Rule Investment Media.
Rule spoke to Kitco on Tuesday. Last year Rule retired from executive and management roles at Sprott.
Renewed focus on decarbonization and high energy prices have rejuvenated the uranium sector. Year-to-date uranium bellwether Cameco is up 29%, and Sprott Physical Uranium Trust has gained 13%. Last week Japanese Prime Minister Fumio Kishida said the country will restart more idled nuclear plants and look at developing next-generation reactors, nearly a decade after the Fukushima disaster put the sector on its heels.
While uranium is up, much of the resource space is trading down. The GDX, an index of gold miners, is down 13% year-to-date.
"I think the malaise that you see in other resource sectors was a malaise that affected uranium for a very long time," said Rule. "I believe that the good news in uranium continues particularly with Japanese restarts. It's a material that generates base load power without producing carbon."
The beaten up precious metal space has compelling valuation, said Rule.
"Gold stocks relative to their net present value at current gold prices are as cheap as I've ever seen them in my career."
