The uranium market is showing signs of a potential rebound, with Citi maintaining a 'tactically bullish' outlook for 2024 and beyond. Despite a recent decline in prices, attributed to low trading volume and liquidity, Citi forecasts uranium prices could rise to US$98/lb later this year, with an average of US$94/lb, and reach US$110/lb by 2025. This implies a potential upside of 36% from current levels, signaling a significant opportunity for investors and the industry.
Increased uranium production, particularly from Kazakhstan, has contributed to the recent price dip, with output expected to reach 59 million lbs this year. However, production growth is projected to slow later in the decade, and inventories are forecast to fall by 20 million lbs by 2030. This shift is expected to place uranium production back at the center of price determination, highlighting the market's sensitivity to supply and demand dynamics.
On the demand side, the growing need for low-carbon energy and rising global power consumption are key drivers. While no new nuclear plants are currently planned, utilities are expected to focus on extending plant life and restarting shuttered facilities. This could significantly boost uranium demand, especially in the United States, where the energy sector is increasingly looking towards sustainable and reliable power sources.
Companies like Generation Uranium are strategically positioning themselves to capitalize on this trend. With its Yath Uranium Project in Nunavut, Canada, Generation Uranium holds a 100% interest in a project located in the prolific and under-explored Thelon Basin. The Yath project is strategically positioned near the Lac 50 uranium deposit, which contains 43 million lbs of uranium. Historical exploration at Yath has indicated uranium concentrations between 1% and 10% U3O8, underscoring its potential.
Generation Uranium has expanded its Yath Uranium Project by over 45% through acquisitions, bringing its total coverage to 123.45 km². The company has also partnered with APEX Geoscience to advance the Yath Project, including preparing for a planned diamond drilling campaign. Additionally, Generation Uranium has launched an advanced airborne electromagnetic survey at the Yath Project, in partnership with ATHA Energy Corp, further exploring the project's potential.
The uranium market's potential rebound and the strategic initiatives by companies like Generation Uranium highlight the growing importance of uranium in the global shift towards low-carbon energy. With prices expected to rise and demand increasing, the uranium market presents a significant opportunity for investors and the energy sector alike.
