Uranium, a critical component in the global energy sector, has seen fluctuating prices over the past 18 months. While prices surged to over $107 per pound in February, they have since declined, prompting investor uncertainty. However, Citi remains tactically bullish on uranium's market potential for 2024 and beyond. The financial institution attributes the recent price stagnation to low trading volume and liquidity but anticipates a rebound as investor focus shifts. Citi forecasts uranium prices could rise to $98 per pound later this year, with an average of $94 per pound. By 2025, prices might reach $110 per pound, indicating a potential upside of 36%.
The recent dip in uranium prices has been linked to increased production, particularly from Kazakhstan, which is expected to produce 59 million pounds this year. However, production growth is projected to slow significantly later in the decade. Concurrently, inventories are estimated to fall by 20 million pounds by 2030, which could place uranium production back at the forefront of price determination.
On the demand side, Citi highlights the growing need for low-carbon energy and the rise in global power consumption. Despite the absence of new nuclear plant plans, utilities are expected to focus on extending the life of existing plants and restarting shuttered facilities, potentially boosting uranium demand, especially in the United States.
As the broader uranium market shows signs of potential recovery, companies like Generation Uranium (TSXV:GEN) (OTCQB:GENRF) are well-positioned to benefit from this trend through strategic projects and exploration initiatives. Generation Uranium is advancing its Yath Uranium Project in Nunavut, Canada, where it holds a 100% interest. The project is located in the prolific and under-explored Thelon Basin, near the Lac 50 uranium deposit, which contains 43 million pounds of uranium and is being developed by Latitude Uranium, recently acquired by ATHA Energy for $64.7 million in an all-share deal.
In June, Generation Uranium expanded its Yath Uranium Project by over 45% by acquiring the Yellow Frog and Pink Toad Uranium Projects along the Angilak Trend in Nunavut, increasing its total coverage to 123.45 km². Yath now extends northward, coming within 3 kilometers of Atha Energy Corp’s Angilak Project.
Further advancing the Yath Project, Generation Uranium has partnered with APEX Geoscience, which will provide geological consulting services and assist in preparing and submitting exploration authorization applications for a planned diamond drilling campaign. This collaboration involves coordination with key regulatory bodies such as the Nunavut Planning Commission, Nunavut Impact Review Board, and Kivalliq Inuit Association to ensure compliance with all regulations.
To accelerate exploration, Generation Uranium has launched an advanced airborne electromagnetic survey at the Yath Project, in partnership with ATHA Energy Corp. The survey is being conducted by Expert Geophysics Ltd., using its cutting-edge Mobile MagnetoTellurics (MMT) system, known for its precision. The survey will cover 890 line-kilometers with a 150-meter line spacing, gathering high-resolution magnetic and VLF data. The collaboration with ATHA Energy allows Generation Uranium to leverage economies of scale, reducing costs and speeding up the exploration process.
CEO Anthony Zelen expressed confidence in the project, highlighting the strategic partnership and advanced technology as key factors in advancing Yath towards drilling. As the uranium market shows signs of a potential rebound, Generation Uranium’s strategic initiatives position it to capitalize on the growing demand for low-carbon energy.
