What’s up everyone, we recently covered the aluminium sector
which is going through an explosive moment of share price growth and yet again in today’s video,
I bring you 3 top penny stocks from another sector – uranium – equally seeing explosive growth.
These commodities sectors are really hot right now and have the ingredients to see share price
growth over the medium to long term and make you some real money. And here’s why this is happening.
Nuclear power companies are facing competition for supplies of uranium from financial investors,
who are betting on sharply higher prices and demand for the radioactive material used to
fuel reactors. The price of raw uranium, known as yellowcake, has risen to its highest level
since 2014 to more than $40 per pound, driven by a newly launched investment trust, run by Canadian
asset manager Sprott. Investors are betting that nuclear power will be a key part of the move away
from fossil fuels and that a lack of new uranium mines will mean the price has to move higher.
And We can see the impact on uranium prices on the back of Sprotts activities.
The Sprott Physical Uranium Trust has snapped up about 6m pounds of physical uranium,
worth about $240m, helping to push uranium prices to more than $40 per pound, up from
$30 at the start of the year. Global mine supply is expected to be about 125m pounds in 2021.
And so its aggressive buying will put pressure on utilities that need to secure supplies of the
commodity for electricity generation. It also comes as China is planning a big increase to
its nuclear power capacity over the next decade. And so Sprott currently holds about 24m pounds
of uranium, worth about $1bn, in the form of yellowcake. So really really interesting outlook.
So make sure you watch till the end, so you don’t miss out on these 3 big plays which we
have previously covered on the channel and are all seeing explosive share price growth right now..
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So let’s get straight into it, with our number 3 uranium penny stock here
which is Denison Mines Corp (DNN) which is listed on NYSE. It has a share price sitting at $1.59
and market cap of $946m. This penny stock has been propelled by both sector and company news
with it being up 12.7% on the day and 43.2% on the month. And YTD this penny stock is up 137.3% and
hitting all time highs. It has shown some strong levels of volatility over the last few quarters
giving decent entry points for those who are patient.. Some may want to take profit at this
point but I see this sector as a long term play with lots more upside given the sector dynamics.
Denison Mines have a Diversified Asset Base at the Athabasca Basin
with Superior Development Leverage. They have 90% interest in their Flagship Wheeler River project,
a 22.5% interest in McClean Lake Uranium Mill and 66.90% interest in the Waterbury Lake project.
Their Flagship Wheeler River Development Project – Phoenix
which hosts two high-grade uranium deposits is estimated to potentially have the lowest costs
of any undeveloped uranium deposit. This is thanks to their In-Situ Recovery (“ISR”) mining method
with On-site processing to finished yellow cake with an all-in costs of US$8.90/lb U3O8.
Denison Reported Results from Q2 2021, and their CEO, David Cates, commented that, "The Company
continues to successfully advance on its ambition of developing the high-grade Phoenix deposit,
as potentially one of the lowest cost uranium mines in the world, at a time when the uranium
market is showing signs of a sustained recovery and the beginnings of a new contracting cycle.
On the technical side, in relation to their progress at Phoenix, they have reported several
positive updates on their In-Situ Recovery - ISR field testing activities, metallurgical studies
in support of the ISR mining method, and the discovery of additional high-grade uranium in
the area. And taken together, they believe that Denison is well positioned to continue
de-risking the use of the ISR mining method at Phoenix and ultimately compete with the incumbent
uranium producers in the coming years when the market needs additional sources of production.
This gives it really exciting outlook so certainly one to watch.
Next up to our number 2 penny stock here, which is Ur Energy
(URG) which is listed on the NYSE. This is another top uranium penny stock which
we’ve covered on the channel and we also go the chance to have their CEO on the channel
and had an insightful interview with him. If you missed it, you can check it from the link above.
It has a share price sitting at $1.66 and market cap of $327m. This penny stock is up 11.4% on
the day seeing similar sector explosion and over the last month it is up 37%.
having bounced from its recent lows of about $1 per share.
Ur-Energy recently released their 2021 Q2 Results, And their Chairman, Jeff Klenda said,
"They were pleased to announce their results from the first half of 2021 as they ended the
period with more than $20 million in cash and 285,000 pounds U.S. produced U3O8 in inventory
at the conversion facility. They continued to advance regulatory approvals at both their
Lost Creek Property and Shirley Basin Project. Having received all remaining major approvals
for Shirley Basin during Q2, their second uranium project in Wyoming now stands construction ready.
The approvals also mean that they have effectively doubled the Company's licensed
and permitted production capacity. Some really good stuff to look out for with this penny stock.
And finally to out banger on the list for today and our number 1 uranium penny stock here,
which is Uranium Energy Corp Inc (UEC) which is NYSE Listed. It has a share price sitting at $3.21
and market cap of $748m. Similar to the others UEC has had a decent
share price run recently up 43% on the month and 78% YTD.
We know that earlier this year, The Company had acquired an additional 200,000 pounds
of U.S. warehoused uranium. UEC's physical uranium initiative was fully funded with cash on hand and
included 2.305 million pounds of U.S. warehoused uranium at a volume weighted average price of ~$30
per pound with various delivery dates out to June 2023. Its not even 6months yet and we are
talking of $40 per pound of uranium. So some really visionary approach taken at the time.
The Company has also acquired an additional 1,000,000 common shares of Uranium Royalty
Corp (“URC”) (TSXV: URC, Nasdaq: UROY) in order to maintain its existing strategic ownership position
in URC. So this gives it a solid exposure to uranium for them to win at every opportunity from
direct ownership and via royalty streaming. So really exciting stuff going on with them as well.
So with this Sprott Physical Uranium Trust -- the commodity fund that buys
and holds physical uranium as an "alternative for investors,"
and indeed "the world's largest" fund of such – it gives plenty of reasons for optimism.
Its crazy to imagine how one asset managers buying power can influence to global uranium prices. And
One could argue it’s a pump and dump scheme, which is reasonable but Sprott's "aggressive purchasing
strategy" of physical uranium creates "potentially massive" upside for uranium mining stocks
at least for the short to medium term given the outlook and potential demand.
So a very interesting and mindblowing prospects ahead for these penny stocks
but only consider getting in if the price is right for you and if you fully understand the risks.
This video is not financial advice, a buy or a sell recommendation, but is meant to bring some
new and exciting penny stocks to your attention for you to do your own research.. As always I
would love to hear from you, so please let me know your thoughts on these top penny stocks
in the comments section below and what other penny stocks are catching your eyes lately.
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