Uranium is experiencing a remarkable resurgence, with prices jumping over 30% to a 12-year high as global interest swells for nuclear energy.
While this revival is driven by several factors, including dwindling supply and the ever-rising global demand for clean energy sources, Sprott Physical Uranium Trusts (TSX:U.UN) (OTC:SRUUF) buying spree could be fueling the short squeeze taking place in the uranium market.
The worlds largest and only publicly-listed physical uranium fund has more than doubled its uranium supply in the last two years to nearly 62 million pounds and is showing no signs of slowing according to recent sentiments from the companys CEO.
Earlier this week, Sprott Asset Management CEO John Ciampaglia said that this cycle feels more like a supply story than a demand story and because of that supply issue, he thinks this uranium bull market will last several more years.
He also noted that historical uranium cycles tend to go six to eight years due to the large capital expenditures involved with those types of projects.
The Sprott Uranium Miners UCITS ETF and other uranium-focused exchange-traded funds are also experiencing a major uptick thanks to the nuclear revival. The fund surged past $100 million in assets under management (AUM) less than 18 months after its launch and posted a 29.8% year-to-date return.
Analysts predict prices could hit $80 per pound by year-end and rising year-over-year for the next 10 to 20 years or until a viable alternative for large-scale, uninterrupted, low-carbon power emerges.
The supply and demand imbalance creates a promising opportunity for junior uranium exploration companies with large high-grade projects such as ATHA Energy (CSE:SASK) (OTCQB:SASKF) (FRA:X5U). With its considerable uranium exploration assets, ATHA Energy stands in a distinctive position in the nuclear industry's promising future.
Unlocking the Largest Land Position in the High-Grade Athabasca Basin
ATHA Energy owns the largest exploration package in the Athabasca Basin, renowned as the world's premier uranium basin, spanning an impressive 3.4 million acres. The company also possesses a 10% carried interest portfolio in claims operated by NexGen Energy and IsoEnergy Ltd.
ATHA Energy recently announced the outcomes of its comprehensive electromagnetic (EM) surveys conducted at its wholly-owned North Terra Project and North Pinnacle Project, both situated within Saskatchewan's Athabasca Basin.
The 2023 exploration initiative, which includes 17 EM surveys being conducted across the Athabasca Basin, is divided into four distinct districts: North Rim District, East Rim District, West Rim District, and Cable Bay District. These encompass various active, historical, and evolving uranium mining regions within the Athabasca Basin. In August this year, ATHA initiated an unprecedented multi-platform EM survey across the Athabasca Basin to advance exploration and assess the potential of its extensive land holdings.
Using Axiom's XciteTM Heli TDEM survey, ATHA effectively covered 7,166-line kilometers across the North Pinnacle and North Terra Projects in two blocks. Multiple conductors featuring cross-cutting structures were identified in both projects, indicating the possibility of uranium mineralization traps. A total of 20 kilometers of high-priority conductive lineaments have been pinpointed within these projects.
"These results are the beginning of what we anticipate to be a very active exploration period for ATHA as we kick off the initial stages of a systematic discovery process across our expansive exploration portfolio, said Troy Boisjoli, CEO of ATHA. The formation and strategic purpose of ATHA was to be a specific response to the fundamental strength of the uranium cycle we are currently experiencing, and our contention is that in order to provide the greatest probability of exploration success, we need to begin with a targeted exploration program in the highest-grade uranium basin in the world and at significant scale."
These findings mark significant advancements in ATHA's exploration endeavors, underscoring the potential for valuable uranium discoveries within its extensive portfolio.
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