France’s Dramatic Exit from Niger Fuels Uranium Supply Fears

October 03, 2023 at 08:30 AM EDT

In an unexpected twist, France has pulled its ambassador and troops out of Niger in a rapid response to the ousting of President Mohamed Bazoum.

Amid escalating tensions after the coup, France, initially hesitant, eventually agreed to withdraw its 1,500 troops from Niger by the end of the year. As the ambassador and six colleagues left Niamey for Paris, President Macron expressed unwavering support for Bazoum.

This move isn’t just a political shake-up; it’s a potential uranium crisis. France’s abrupt exit disrupts a balance of power the nation has held in the Sahara for over 100 years. With such significant upheaval, a burning question emerges: Where will France and, by ripple effect, the EU, turn to sustain their uranium thirst?

Niger, despite its poverty, is a major producer of high-grade, radioactive material used for reactors and nuclear weaponry. In 2022 alone, 20% of France’s uranium imports streamed from Niger’s vast uranium reserves —mines that feed France’s nuclear energy which generates 70% of its electricity.

France’s energy giant, Orano (formerly Areva), largely state-owned, has dominated Niger’s mines in the Sahara Desert for five decades. These mines, especially those near Arlit, contribute significantly to uranium supplies in the EU.

But with this abrupt withdrawal, there’s bound to be a supply gap. Sure, France might have backup plans, sourcing uranium from Kazakhstan, Uzbekistan, or Namibia, but forging newer, stronger bonds with these nations will be imperative. Meanwhile, as Niger grapples with the ‘resource curse,’ China and Russia, both with vested interests in uranium, are closely watching, ready to jump in.

Concerns about uranium supply for French nuclear energy will likely act as yet another catalyst for upward movements in uranium prices, considering the current tight supply and demand dynamics in the uranium market.

In September uranium prices surged to $72 per pound,¹ marking their highest point since the 2011 Fukushima disaster and signaling the start of a new uranium bull market.

According to Sprott Asset Management, which has been buying up physical uranium at a record pace, the run to last several more years as the demand/supply imbalance continues growing.

Experts anticipate that uranium prices may reach $80 per pound by the end of this year,² and they are expected to continue rising annually for the next 10 to 20 years, or until a viable alternative for large-scale, uninterrupted, low-carbon power generation becomes available.

A Unique Opportunity to Capitalize on the Uranium Gold Rush

Uranium prices are soaring, and while many are eyeing uranium ETFs and stocks, a recent analysis by Katusa Research has spotlighted a company that might just eclipse the competition.

Katusa Research, a highly reputable investment research firm founded by the illustrious Marin Katusa, has just released an in-depth report on Uranium Royalty Corp. (NASDAQ:UROY) (TSX:URC), a pioneering force in the uranium sector that boasts considerable stakes in several of the world’s premier uranium mines.

At the helm of Uranium Royalty Corp. is Scott Melbye, a seasoned expert with four decades in the uranium sector. His expansive resume spans from pivotal roles at Cameco to advisory positions with the national uranium company of Kazakhstan. Melbye’s commitment is evident in his hands-on approach, with his efforts dedicated to seeking new royalty investments.

Melbye is supported by Co-Founder Amir Adnani, the visionary behind Uranium Energy Corp. (UEC). Adnani’s accolades, including being recognized as a top “40 under 40” entrepreneur by Fortune and a nomination for “Entrepreneur of the Year” by Ernst & Young, highlight his prowess. Beyond his achievements, Adnani’s ability to forge strategic partnerships ensures that Uranium Royalty Corp. has ties with all the significant entities in the uranium sector.

Only six years into its inception, Uranium Royalty Corp. is already a force to be reckoned with. Its impressive portfolio boasts 18 royalty interests including the world’s premier uranium mines, Cameco’s (NYSE:CCJ) McArthur River and Cigar Lake, which is a testament to its strategic foresight and dynamic approach.

McArthur River boasts ore grades 100 times the global average. It’s licensed to produce 25 million pounds yearly, with a 2023 target of 15 million. Uranium Royalty’s (NASDAQ:UROY) (TSX:URC) strategic 2021 investment capitalized on its resurgence by Cameco in 2022, now promising revenues of over $1 million annually. Cigar Lake, which produced 14% of the total global uranium in 2022, stands out not only for its high grade but also for its competitive operating costs of just $15.98/lb. CEO Scott Melbye estimates that Cigar Lake could translate into a $5 million annual cash inflow within the next three years

Under Melbye’s astute leadership, Uranium Royalty Corp. (NASDAQ:UROY) (TSX:URC) made a calculated play, investing a hefty $65 million in physical uranium during favorable market conditions. These investments not only bolstered capital gains but also ensured a war chest that could be tapped into as opportunities arose. The company’s eyes, however, remain fixed on intensifying its footprint through acquisitions of new royalties and streams.

As the global compass points increasingly towards nuclear energy, Uranium Royalty, the world’s only uranium royalty conglomerate, is primed to harness the immense potential of the burgeoning uranium landscape.

You can delve into Katusa’s in-depth report here for further insights into the new uranium bull market and Uranium Royalty Corp. (NASDAQ:UROY) (TSX:URC)

Featured Image @ Shutterstock

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