Small-cap IsoEnergy Ltd. is in full acquisition and development mode in a North American play that is to uranium as what Saudi Arabia is to oil.
Uranium producers prepare for a price revival, thanks to changing post-Fukushima sentiment and an incoming U.S. president who is thought to be very pro-nuclear.
Japan is getting its nuclear energy back on track, 61 new reactors are under construction around the world, another 149 new reactors are planned, and long-term uranium contracts are set to expire.
Negative sentiment that has thrown true uranium fundamentals off balance since 2011 Fukushima disaster is reversing, and a new, apparently pro-nuclear U.S. president is likely to help this along.
Uranium is on the edge of becoming one of the world’s hottest commodities once again, and this is a once-in-25-year event. As we near the edge of this tipping point, all eyes are on North America’s Athabasca Basin—a uranium wonderland that will be a key element of the new supply paradigm.
This may probably be the best time to start consolidating uranium assets and preparing for the rebound. Here are 4 reasons to keep a close eye on IsoEnergy.
1) It is finally the right time for Uranium
The uranium market is now at the early stage of what looks set to becoming a roaring bull market, which is now quite evident. Cameco is up +40% since November of last year, while during this same period, NexGen Energy Ltd. (TSX: NXE) is up over 70%. That shows that fundamentals are taking over a commodity that sentiment has hijacked for years.
2) Spot prices don’t matter: Lucrative Long-term contract prices do.
Some may fear the spot market, which they see every week, but the actual market on which sales are based is long-term contracts, and it’s not nearly as transparent as the spot market. They can be derived from transactions involving as little as 10,000 pounds of uranium. An entire market’s spot price is being based on this, skewing the real picture. The key is to focus on the bigger, long-term contracts for upwards of $40 per pound because these are what will drive the industry in the years to come.
3) Welcome to the “Saudi Arabia” of uranium.
Described either as the “Saudi Arabia of Uranium” or the “Persian Gulf of Uranium”, Canada’s Athabasca Basin in Saskatchewan is the go-to destination for high-grade uranium and is home to grades of 100x the global average. This is arguably the world’s richest uranium mining area, and it’s also where IsoEnergy is hungrily scooping up prime property.
4) Cashed-up and ready to explore
IsoEnergy has raised US$11 million dollars in the last four months alone, and they have US$8 million in the bank. This means they are drilling aggressively and are fully funded to continue doing so, while still looking for more smart acquisitions to consolidate their long-term position.