Cameco, GoviEx Uranium, Nel ASA - The coast is clear

Cameco - Further increase likely

After a bearish phase that began in 2008, the price of uranium bottomed out at USD 18 in 2016 before entering a sideways range until 2020. It exited this range dynamically in 2020. Since then, it has performed over 200% to a 13-year high of USD 74.35. The rising demand is also in line with the share price performance of the most important uranium producers.

It is worth highlighting the development of one of the world's largest providers of uranium fuel, which is needed for the energy supply of a clean world. While the Cameco share price was still at USD 5.30 at the beginning of 2020, it significantly outperformed the broad market with an explosion of more than 710%. It is unlikely that this movement has already come to an end, as demand for the heavy metal is too high.

The Company from Saskatoon, Canada, signed a uranium supply contract with China Nuclear International Corporation, a subsidiary of China National Nuclear Corporation, one of the country's largest nuclear power plant operators. Terms and details of the supply agreement were not disclosed. The contract volumes are reflected in the 215 million pounds of uranium reported by Cameco under long-term contracts and the reported average annual supply volumes of 28 million pounds per year from 2023 to 2027.

Tim Gitzel, President and CEO of Cameco, commented on the long-term cooperation: "China is committed to nuclear energy playing an important role in achieving net-zero emissions, and CNNC is a large and growing part of that effort. Cameco is pleased to further expand our contribution to China's important climate goals."

GoviEx Uranium - Broadly diversified portfolio

GoviEx Uranium, whose goal is to become a major African producer by 2026, stands on several legs. The Canadians are the only uranium development company with two projects in different countries that have the potential to produce in the near future.

With the Muntanga project in Zambia, the exploration company has a property whose potential has only just begun to be unlocked. The conditions for a positive surprise in the current feasibility study are excellent. The latest NI 43-101 technical report at the end of August was a milestone for the Company. Measured and Indicated resources had almost tripled, increasing from 29% to 74% of total resources. In addition, total constrained resources in the pit grew by 18%, while all mineral categories experienced grade improvement. These positive results were largely the result of 2021 and 2022 drilling campaigns, focusing mainly on the Dibbwi East deposit.

With the Madaouela project, GoviEx Uranium has another hot iron in the fire. GoviEx owns an 80% stake here; the government of Niger holds the rest. Madaouela has a measured and indicated mineral resource of 96.9 million pounds of uranium, plus inferred resources of 19.6 million pounds. A feasibility study is already in place. The Canadians are able to operate almost self-sufficiently with their own processing plant and the use of renewable energies.

With the publication of the 2023 Sustainability Report, the commitment to Environmental, Social and Governance (ESG) principles was reaffirmed. Daniel Major, CEO of GoviEx Uranium, commented as follows: "During the reporting period, GoviEx made significant progress in its sustainability reporting and has implemented robust processes to improve critical metrics such as water and diesel consumption as well as electricity consumption and greenhouse gas emissions."

GoviEx shares recovered significantly after a coup in Niger at the end of July and are currently trading at CAD 0.165. If the vertical resistance at CAD 0.20 is exceeded, the air would be clear for a rally of at least 50%.

Nel ASA - Bear market rally started

After the sobering quarterly figures and the subsequent crash to new annual lows of EUR 0.56, the Norwegian hydrogen specialist Nel ASA has sent out a sign of life in recent days. As a result, the share was able to break out of the short-term downward trend at EUR 0.70 that has been in place since the beginning of August.

The next resistance now lies in the area of EUR 0.89. In our opinion, it seems unlikely that this will be enough for a long-term breakout, as the gap between the still high market capitalization of EUR 1.04 billion and the reported results is too wide.

In the third quarter, the Norwegians generated sales of just EUR 34.3 million. Although the Company increased its revenues by 121% compared to the same period last year, analysts were expecting growth to EUR 35.58 million. In terms of earnings before interest, taxes, depreciation and amortization, Nel ASA posted a loss of EUR 9.21 million, exceeding consensus estimates, which forecast a loss of EUR 11.75 million for EBITDA.

In contrast, the hydrogen specialist recorded an extreme decline in incoming orders, which fell by 55% to EUR 29.75 million. The order backlog at the end of the third quarter amounted to EUR 241.23 million, over 85% of which came from the electrolysers division.

The uranium price reached a new 13-year high in the past few days and is likely to continue its upward trend due to high demand. With two projects, GoviEx Uranium is ideally positioned to go into production in the short term. An extended bear market rally is possible for Nel ASA.