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Editorial Coverage: Every president wants a legacy and
President Joe Biden wants to put his stamp on climate change. Only
a few months into his term, President Biden has pledged to
slash U.S. greenhouse gas emissions by a minimum of 50–52 percent
by 2030, an undertaking that doubles the nation’s prior promise
under the 2015 Paris Climate Agreement. Further out, the target is
net zero carbon emissions by 2050. These aggressive goals require
immediate action, including addressing the fact that almost 40
percent all carbon dioxide pollution is created by power plants
burning fossil fuels. The International Energy Agency ("IEA")
recently published its comprehensive
plan to cap the global temperature rise to 1.5°C by 2050, which
includes a combination of wind, solar and nuclear to phase out
fossil fuels. Today, the world is at a tipping point for the energy
sector, presenting opportunities to capitalize on the epic
transformation. In the United States, Uranium Energy Corp.
(NYSE American: UEC) (Profile) is a leading player in low-cost and
environmentally friendly in-situ recovery
("ISR") mining of uranium, the essential element that fuels
nuclear energy. There are also investing strategies directed
at the electric vehicle market, including Blink
Charging (NASDAQ: BLNK) and top solar companies like
Canadian
Solar (NASDAQ: CSIQ) or more diversified approaches,
such as The
Global X Uranium ETF (NYSE: URA) and Energy
Select Sector SPDR Fund (NYSE: XLE).
- Research indicates that more than 20% of all energy worldwide
could come from nuclear by 2050.
- Texas-based UEC is a pure-play American uranium company.
- UEC has the largest resource base of fully permitted ISR
projects of any U.S. based producer
- UEC also owns or has contracted for 2.305 million pounds of
U.S. warehoused uranium; also has a large stake in Uranium Royalty
Corp.
Click here to view
the custom infographic of Uranium
Energy Corp editorial.
IEA Game Plan Shows Goals Achievable with Nuclear,
Renewables
While it’s certainly a challenging task to reshape the entire
energy industry, the IEA sees a clear pathway to attaining the
global goal of net zero emissions by prioritizing events to
diminish reliance on fossil fuels. In the next three decades, the
world’s population will approach 10 billion people. This will
require setting new standards for decarbonization and implementing
actions through concerted efforts among countries investment and
energy policies.
The IEA strategy envisions about 70% of the world’s electricity
coming from renewable sources such as solar and wind by 2050.
Nuclear energy could contribute more than 20% by mid-century.
Nuclear is critical to infrastructure for the global fleet of
electric vehicles, which are expected to spike from about 8.5
million cars on the road in 2020 to 116 million by 2030. To keep up
with charging demand, the World Nuclear Association sees the need
for 25 additional
nuclear reactors exclusively for the boom in EVs.
A Spate of Diversified Uranium Assets
With the writing on the wall, interest in uranium has
understandably risen, and shares of Uranium Energy
Corp. (NYSE American: UEC) have garnered attention. Texas-based
UEC stands out as a pure-play American uranium company that
includes a portfolio of near-production ISR
projects and hub-and-spoke operations anchored by its fully
licensed Hobson Processing Facility in Texas. The portfolio also
contains Reno Creek, the U.S.’s biggest permitted, preconstruction
ISR uranium project and a pipeline of resource-stage uranium
project across Arizona, New Mexico, Colorado and Paraguay.
Further, UEC owns a large equity position in Uranium Royalty
Corp. and a growing inventory of physical uranium warehoused in
America that it is stockpiling at low prices for what is expected
to be strong future demand. In the heart of South America, UEC’s
Alto Parana project in Paraguay is considered one of the
highest-grade and largest ferro-titanium deposits in the world.
Savvy Spending to Build Value
Uranium Energy holds 15 million
shares of Uranium Royalty Corp., the only public uranium
royalty company. Uranium Royalty trades on both the NASDAQ and
TSX-Venture exchanges, with its market capitalization currently
around C$250 million, based upon QuoteMedia data and a stock price
of C$3.19. UEC was in on the company early and has an average cost
basis of just C$1.09 per share.
As for its physical uranium initiative, UEC reported owning or
having contracts with delivery dates out to June 2023 for 2.305
million pounds of uranium at the end of the most recent completed
quarter, ended April 30, 2021. Management
estimates the current inventory in UEC’s possession to be
valued at approximately $26.2 million. Even assuming no
appreciation in uranium pricing, the complete inventory once all
delivery is taken will be approaching $50 million. In the quarterly
report disclosing this information, the company stated that the
total of its cash on hand, equity in Uranium Royalty and physical
uranium position was worth about $123.4 million at the end of
April.
UEC: Ahead of the Emerging U.S. Market
The United States is set up to be a thriving uranium market.
Uranium is well documented to be safe and reliable nuclear energy
feedstock. Nuclear energy already is the largest source of
carbon-free power generation in the U.S. and the second biggest
source of electricity in the country, period. No other country in
the world has more nuclear reactors operating than the United
States.
Almost amazingly, however, the U.S. has effectively no domestic
uranium production today. Almost all of the country’s supply is
imported or coming from inventory. State-owned enterprises in the
former Soviet Union countries, including Russia, are flooding the
market with cheap uranium and distorting global markets. China is
also making inroads into the U.S. market with uranium that free
market companies cannot compete with.
The U.S. government has recognized the threat to American energy
and national security and addressed the problem in a Department of
Energy report: Restoring America’s Competitive Nuclear Energy
Advantage. The result will be implementation of a Strategic Uranium
Reserve program that was recently passed by Congress to stimulate
growth in the domestic uranium mining industry.
When that faucet is turned on, UEC will be instrumental with its
fully permitted, near-production projects (Palangana, Goliad, Burke
Hollow and Reno Creek) that host 32.6 million pounds in the
Measured and Indicated category and 11 million pounds in the
Inferred category. UEC has the largest resource base of fully
permitted ISR projects of any U.S. based producer. It bears
repeating that these are ISR projects, widely recognized to be less
expensive to operate and environmentally friendly, qualities that
make them quite attractive compared to hard-rock mining.
This goes without mentioning the integrated nature of UEC with
its permitted, state-of-the-art Hobson Processing facility that has
capacity of 2 million pounds per annum. In total, UEC has a
production profile of 4 million pounds of production annually.
Looking Beyond Uranium
With its infrastructure and assets, UEC is in an enviable
position when it comes to uranium miners in the U.S. That said,
there are a number of other companies that have emerged as leaders
in clean energy areas that are positioned to capitalize on the
global goal of drastically reducing carbon emissions.
Blink Charging
(NASDAQ: BLNK) is a leading owner, operator and
provider of electric vehicle ("EV") charging equipment and
networked EV charging services. Blink has thousands of EV chargers
deployed across the U.S. at an impressive array of locations and
also has a proprietary cloud-based software that operates,
maintains, and tracks all the Blink EV charging stations and the
associated charging data; EV charging equipment; and EV-related
services. This month, Blink deployed 10 IQ
200 2 EV charging stations at three locations of AtlantiCare
Integrated Healthcare System, the largest healthcare organization
in Southern New Jersey, representing the first into the AtlantiCare
ecosystem.
Canadian
Solar (NASDAQ: CSIQ) has been around for 20 years,
growing into one of the world's largest solar technology and
renewable energy companies in that time. A leading manufacturer of
solar photovoltaic ("PV") modules, provider of solar energy and
battery storage solutions, and developer of utility-scale solar
power and battery storage projects, Canadian Solar has successfully
delivered over 55 GW of premium-quality, solar PV modules to
customers in over 150 countries. During Q1 2021, the company
shipped 3.1 GW
of solar PV modules, helping revenue to surge 32%
year-over-year to $1.1 billion.
The
Global X Uranium ETF (NYSE: URA) provides investors
access to a broad range of companies involved in uranium mining and
the production of nuclear components, including those in
extraction, refining, exploration, or manufacturing of equipment
for the uranium and nuclear industries. As of June 21, 2021, the
fund has 38 holdings spanning 10 countries with net assets of
$741.5 million. The fund also provides research, such as insights
on why the uranium market is “primed for
growth.”
Energy
Select Sector SPDR Fund (NYSE: XLE) is the oldest
exchange-traded
fund focused on the energy business. It is also currently the
largest energy ETF with approximately $25 billion in assets under
management. The fund seeks to provide investment results that,
before expenses, correspond generally to the price and yield
performance of the Energy Select Sector Index. Under normal market
conditions, the fund generally invests substantially all, but at
least 95%, of its total assets in the securities comprising the
Index.
Leaders worldwide know that changes have to be made to fight
climate change. Up until now it has been a bit of a slow roll,
though. With 2030 and 2050 right around the corner, the pace has to
be accelerated starting right now and the IEA nailed it by calling
for the redirection of investment capital away from fossil fuels
and into greener technologies. It appears that leaders everywhere
recognize that it is time to act — and act swiftly.
For more information about Uranium Energy Corp (NYSE
American: UEC), please visit Uranium Energy
Corp.
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