July 20th, 2023 | 08:15 CEST
Turning point in uranium: ThyssenKrupp Nucera, GoviEx Uranium, Cameco
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"[...] We are committed to stay as the number one Canadian and global leader in the Hydrogen-On-Demand diesel technology [...]" Jim Payne, CEO, dynaCERT Inc.
ThyssenKrupp Nucera: Euphoria faded
After its highly acclaimed IPO, the stock of hydrogen company ThyssenKrupp Nucera has come down to earth. It seems that the wait-and-see attitude of many German citizens when it comes to real estate measures has also rubbed off on the market. Even if hydrogen is the future, investors are currently holding back. Nobody wants to chase the price of a comparatively young stock in the current market environment. In addition, there are initiatives worldwide to produce green hydrogen. As is always the case when a technology gradually establishes itself on the market, products and business models are also subject to a reality check. Given the many laurels that hydrogen companies have already received in recent years, there is also potential for disappointment. Anyone familiar with the chemical properties of hydrogen may well begin to have doubts given the volatility of the gas and its explosiveness in combination with oxygen - especially if they have had experience with poor craftsmen in the recent past.
Cameco: Is Canada stepping in the breach of Russia?
In many of the world's economies, nuclear power continues to be an issue alongside renewable energy, which is rightly booming. The technology boasts benefits like zero CO2 emissions and significant energy output. On the downside are possible accidents and their barely calculable costs, as well as the question of the final storage of used fuel rods. Despite the ambivalent overall picture, economies such as China and the US are holding on to nuclear plans. With Russia no longer an option as a trading partner for many countries, Canada has recently been helping supply fuel rods to Ukraine. According to Cameco CEO Tim Gitzel, other countries could soon follow Ukraine's example and sign supply contracts with companies from Canada.
GoviEx Uranium: Africa as a uranium hotspot
Other regions are also suitable, for example, the African state of Niger. The French nuclear industry has already found good conditions there. The Canadian company GoviEx Uranium has good opportunities to profit from the new situation on the world market for uranium with the already approved Madaouela project, which is scheduled to go into production in 2026, and the Muntanga project in Zambia, which has also been approved. The share price recently rose as a result of several positive company announcements. Among other things, the Company reported greater mining potential for its Muntanga open pit project.
The Falea project in Mali, which GoviEx Uranium wanted to sell at the beginning of June, also remains in the Company's portfolio for the time being. The buyer at the time failed to close the transaction. As a result, GoviEx Uranium remains positioned in no less than three African countries. The Madaouela project in Niger, in particular, is predestined to give the Company's stock new momentum due to its progress. After months of decline and selling pressure, the signs are pointing to a comeback for GoviEx Uranium.
Cameco share picks up - Second-tier stocks to follow?
The share of Cameco, one of the world's largest uranium producers, has already made a small comeback in 2023. After bottoming out around the turn of the year, the share is now trading just below its 52-week high. By contrast, things are not yet going so well for Kazatomprom. The Kazakhstan-based company carries a certain geopolitical risk due to its proximity to Russia and is, therefore, unlikely to be at the top of many investors' lists.
In addition to Canada, mining regions in Africa could benefit from increasing uranium demand, according to analysts. GoviEx Uranium's stock must be considered speculative due to its low market capitalization of only CAD 105 million and projects not yet in production. However, given the shifts in the uranium market due to the war in Ukraine, the outlook for GoviEx Uranium is not bad. The stock is a watchlist candidate - it does not always have to be hydrogen.
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