Uranium price rebound is overdue, and these African projects are...

Uranium price rebound is overdue, and these African projects are getting ready

Excerpt….

If all goes to plan Aura – which could have 50-60% of its funding costs covered by a Western sovereign development bank – will be in production by 2027.

Grove says in that time, uranium could correct hard.

While contract pricing remains around US$80/lb and reflects over 85% of total uranium sales, the spot market is more visible and tends to dominate equity investor sentiment.

But when that sentiment turns it can move quickly, as occurred when prices hit all time highs in 2007 and again from 2021-2023 with the arrival of the Sprott Physical Uranium Trust.

“What I also think we’re seeing is, given the turbulence we’re coming through with Trump’s tariffs, the utilities haven’t been into the market much at all this year,” Grove said.

“They’ve either been worried about tariffs – (although) obviously uranium was excluded from the tariffs under Trump’s policy – so they really haven’t been in the market.

“They can afford to keep out of the market a little bit because … it’s a long-term process for the utilities, by the time they buy uranium oxide with yellowcake, it takes circa 18 months to enrich it and make it into fuel pellets to go into the power station. So they’ve always got a bit of inventory on their books.

“As a lot of the commentators will say, it’s going to correct (and) it is going to correct hard. The timing of that I don’t know – soon, I hope.”

One group clearly betting on that eventual outcome is the US uranium fund Sachem Cove.

Mike Alkin-led Sachem Cove built large positions across the uranium developer landscape when prices were recovering from post-Fukushima lows of US$18/lb close to a decade ago.

They recently emerged as a major backer of Aura, taking $6.5m of a $9m placement launched in December last year before buying another ~17m shares on market to take their stake in the ASX junior to 6.97%. That’s called the smart money.

“They’ve put a lot of confidence in our ability to fund and execute this project,” Grove said.

“While it’s a new jurisdiction, they like the metrics of the Tiris project, being very shallow mineralisation, very low mining risk, low costs at US$36 a pound, good economic metrics.

“They’re comfortable enough to invest quite a significant amount of money into our shares to support us on the process. It’s very pleasing that they’ve got such a strong positive view towards us.”