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Uranium stocks lift after US approves strategic reserve

December 9, 2020

Uranium stocks lift after US approves strategic reserve

Uranium-exposed stocks have received a boost this week following news the US will construct a national strategic reserve of the yellow metal in 2021.

Uranium-exposed stocks have received a boost this week following news the US will construct a national strategic reserve of the yellow metal in 2021.

The US$150 million strategic reserve was one of several policies introduced by the American
Nuclear Infrastructure Act, which was approved by the US Senate Committee on Environment and Public Works last week.

The Act must still be approved by the Senate, but is expected to pass as it is a bipartisan bill, freeing up funding to build the stockpile and commence work on advanced reactor planning.

Republican senator John Barrasso – a member of the Environment and Public Works Committee – said the bill will help the US “reduce our emissions and strengthen our security”.

“The American Nuclear Infrastructure Act will promote U.S. international leadership, preserve America’s nuclear fuel supply chain, prevent more carbon emissions from entering our atmosphere, and it will protect our economic, our energy, and our national security,” he said.

“The bill supports pioneers who are developing new ways to generate nuclear power. It also supports innovators who are exploring new ways to use it.”

The act will also block the purchase of Russian or Chinese-produced uranium – a move some suspect will represent a windfall for Australian producers.

The US are already a major buyer of Australian uranium, accounting for more than half of final demand for Australia’s $734 million uranium exports in 2018 alone.

Stocks surge following approval

Uranium stocks rallied on Monday following the Environment and Public Works Committee’s approval, with major US players like Cameco (NYSE:CCJ), Denison Mines (NYSEMKT:DNN), and Uranium Energy (NYSEMKT:UEC) climbing 13.3%, 13.5% and 22.3% respectively.

Uranium Energy CEO and President, Amir Adnani, said the bill will be important for “supporting the U.S. nuclear fuel industry”.

“The legislation will provide a clear path for implementation of the U.S. Uranium Reserve and provide a strong platform to revitalize the U.S. Uranium Industry,” he said.

A similar story played out locally too, with almost all 40 ASX-listed uranium stocks experiencing a boost on Monday morning.

Junior explorer Marenica Energy (ASX: MEY) – which operates across several projects in Australia and Namibia – lifted 19% through the course of the day, up from 8.8 cents per share to 10.5 cents by market close.The company’s opening price was 11 cents on the following day of trade – 25% higher than its Friday closing price.

This movement comes not long after the company successfully raised $5.4 million through a share purchase plan and top-up placement.The money has been earmarked to conduct further exploration and development activity across its projects, including the Hirabeb project in Namibia.

 

Please join Marenica’s MD Murray Hill this Friday for an investor briefing. Click here to book.

This briefing will be live and interactive, and you will have the opportunity to ask questions.

 

Reach Markets have been engaged by MEY to help manage their investor communications.
Past performance is not a reliable indicator of future performance.

Sources:


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