March 2nd, 2023 | 19:55 CET
Short-term 100% opportunity - Uranium is picking up: Global Atomic, Myriad Uranium, Rio Tinto
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At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.
Rio Tinto: Prepares for uranium comeback
The uranium market has been on the move in recent months. Many shares caused rapid price gains. Even established players, such as Rio Tinto, have recognized this. The Company used to make a significant share of its sales from uranium. In the past decade, however, uranium became less and less important - until the end of last year. Although Rio Tinto ceded its world-class Roughrider uranium project to US-based Uranium Energy Corp. at that time, it secured a stake in the entire company in return. For Rio Tinto, this move could pay off: Roughrider completes Uranium Energy Corp.'s existing portfolio in Canada's Athabasca Basin and makes large-scale production more likely. Thanks to Rio Tinto's stake in Uranium Energy Corp., the commodity multinational has a foot in the door to get back into the uranium business in a big way if needed, or at least to profit from it in the short term.
The fact that a company like Rio Tinto indirectly holds shares in a North American uranium portfolio, even though most of the planned power plants are in other regions, can be seen as a vote of confidence in the uranium market. The uranium price also speaks a clear language: on a three-year horizon, the price of the coveted material has doubled but is still far below the level of the past uranium hype of 2006. For resourceful investors, the current market phase is exciting: uranium supply is low, and new projects must be measured against uranium prices between USD 25 and USD 50 - this provides enormous leverage in case uranium prices continue to rise and also a downside hedge for early investors.
Global Atomic: Many have missed this "sixfold" increase
The performance of Global Atomic shows what price movements around small uranium companies can look like when their story strikes a chord with investors. At the end of 2020, the share was still trading at EUR 0.50 - barely fourteen months later, it was trading at EUR 3.20. The share price has risen by a factor of six. Global Atomic is pushing ahead with its Dasa uranium project in the African state of Niger and also has a zinc project in Turkey. Niger, in particular, is an exciting hotspot for uranium mining. Traditionally, the French company Areva mined uranium there. Niger is also seen as a kind of beacon in the midst of politically unstable countries - among other things, the US operates its most important airbase in Africa there.
Myriad Uranium: Super key data, mini valuation
In addition to Global Atomic, GoviEx, ENRG Elements and Myriad Uranium are other smaller publicly traded companies exploring uranium in Niger. While Global Atomic is already valued at around CAD 700 million, the Australian company ENRG Elements has a valuation of just over CAD 20 million. Myriad Uranium weighs in at only about half of that - and that despite convincing key data. For example, Myriad Uranium controls more than 1,800 sq km of land, about 2.5 times more than ENRG Elements.
It also looks as if Myriad Uranium has secured promising properties: The Azouza Fault geological fault, which features Global Atomic's Dasa mine, continues on Myriad's exploration property, as does the Arlit Fault, located near the Imouraren mine. After long preparatory work, the team around Myriad CEO Thomas Lamb, which in part has already led the cobalt company M2 Cobalt to a successful exit, succeeded in securing the exploration rights around uranium in Niger last year. The terms agreed at the time date back to more geopolitically stable times and are considered favourable, according to Myriad CEO Lamb. Myriad is counting on cooperation with local company Loxcroft, Myriad Uranium's largest shareholder alongside management, to develop its uranium properties.
Is this a 100% opportunity?
Along with the exploration rights, the Company gained access to 24,000 meters of historical drill samples and other geomagnetic survey results from when the French Areva Group operated in the region. Special detail: Large parts of Myriad's properties have been earmarked by Areva for intensive exploration work. The plans for this are also available to Myriad. From today's perspective, the shares of Myriad Uranium could offer promising opportunities - competitor ENRG Elements is currently about twice as expensive despite a significantly smaller land area. Since Myriad Uranium has an experienced team of geologists and company builders with experience in Africa, speculative investors should keep the stock, currently valued at only about CAD 10 million, on their radar. Companies like Myriad Uranium have been in the spotlight at commodity conferences, such as the recent Mining Indaba in Cape Town, South Africa. A short interview is available online.
Conflict of interest
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