VIDEO — UEC: Uranium Fundamentals Strong, Classic Supply Squeeze Building
[embedded content]UEC: Uranium Fundamentals Strong, Classic Supply Squeeze Buildingyoutu.be
Uranium investors have exercised patience for quite some time — is their wait coming to an end?
“I look at where we’re at in the uranium sector right now, and I don’t think the fundamentals for our commodity have ever been better,” said Scott Melbye, executive vice president of Uranium Energy (NYSEAMERICAN:UEC).
He noted that governments around the world are waking up to nuclear’s spot in the energy mix, but after years of low prices it will be tough for producers to meet this growing wave of demand.
“We have the classic makings of a supply squeeze,” Melbye said.
He’s encouraged about uranium’s upward momentum, and said prices could be getting to the point where some of the world’s better mines will be incentivized to come back online or raise output.
“But I think if we’re going to fill the gap — the 70 million pound gap currently between production and global consumption of 200 million pounds — we probably need uranium prices north of US$60, US$70 a pound,” he explained in an interview with the Investing News Network at the Rule Symposium.
Melbye also spoke about UEC’s planned acquisition of UEX (TSX:UEX,OTCQB:UEXCF). Announced in mid-June, the deal would create the largest diversified North America-focused uranium company.
The conversation took place just before Denison Mines (TSX:DML,NYSEAMERICAN:DNN) made a competing bid for UEX. That bid has since expired, and UEC and UEX announced amendments to their agreement on Monday (August 8). UEX shareholders will vote on the deal on Tuesday (August 9).
Watch the interview above for more from Melbye, and click here for the full Rule Symposium playlist on YouTube.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.