Uranium has been out of favor for the last few years, and as John Kaiser of Kaiser Research explains in this video interview, the Fukushima disaster is largely to blame. “Fukushima is the problem,” he says, “the Japanese nuclear reactors have been on standby ever since then, and that means they have all their stockpiles that they had then.”
What’s more, “because of the long-term contracts that they still had to honor, they’ve been piling up bigger stockpiles of uranium.”
He believes that while further production cuts in Kazakhstan and greater use of nuclear power in places like China and the US could help bring the market back into balance, the elimination of stockpiles in Japan is key. “Until that stockpile problem is gone, it is hard to see why uranium would get in the near term … to say [the] $50 to $70 range,” he comments.
Even so, Kaiser thinks investors interested in the uranium space still have the opportunity to profit. One uranium junior that he’s a fan of is Uravan Minerals (TSXV:UVN), which owns the Stewardson project in Saskatchewan’s Athabasca Basin. Cameco (TSX:CCO,NYSE:CCJ) has an option to earn a 70-percent interest in the project, and Kaiser believes “if [Uravan] can get Cameco to either give it back to them or do some work, [Stewardson could be] a major new discovery in the Athabasca Basin.”
Watch the interview above to learn more about Uravan, the Athabasca Basin and the uranium market as a whole. You can also click the links below to go directly to different parts of the interview:
- 0:11 — uranium supply/demand dynamics
- 3:42 — Kazakhstan’s uranium production cut
- 4:13 — Uravan Minerals overview
- 5:51 — Athabasca Basin geology
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in contributed article. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
John Kaiser owns shares of Uravan Minerals.
Related reading:
John Kaiser’s Favorite Gold Juniors
John Kaiser: Demand for Large, Gem-quality Diamonds is Here to Stay
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