We knew that it would only be a matter of time, but it seems that uranium is poised to make its big move. There is a flurry of activity since the beginning of January in the uranium sector as clean energy exploration companies like UEC see their metrics, valuations and stock price significantly increase. Many greenfield companies are enjoying the momentum and Anfield, who is sitting on a near term producing asset, is sitting in a dominant position.
Big Movers: What Changed?
One can make the case it was with Biden winning the election that the energy shift would begin. It was obviously well underway, but there is certainly the belief that a dramatic change in policy would be initiated with a Biden win. As the new administration has laid out its climate plans, that surge has continued.
Major forecasters expect electricity demand to grow an incremental 55% by 2035 as electric vehicle penetration shapes as an emerging influence.
Decarbonisation: With many countries below Paris-ratified targets, we expect there to be a renewal of interest in nuclear as a viable source of emissions-free energy. We also note that many nations are now targeting COVID-19 recovery infrastructure funds that include carbon-free sources of energy.
Canaccord notes that it expects China (currently at 4% nuclear) to have a significant nuclear reactor build-out to meet its 2030 clean energy target of 20%.
There is a lot to cover with the Green Initiatives being promoted by Biden and his team. Democrats endorsed nuclear energy for the first time in 48 years as part of its “technology neutral” approach to decarbonising the power sector. The predictions or blueprint presented by the World Economic Forum seems to be on target with the trillions of dollars to flow into innovation, and energy that meet the targets of the new shift towards our electric future. I always want to stress that there is a lot of good and a lot of bad in this new initiative but there is a massive opportunity to create intergenerational wealth by investing in this new energy shift.
For those of you who do not know who Dr. Michael J Burry is, I recommend checking out the movie The Big Short. Dr. Burry ran Scion Capital – a hedge fund – that recognized the ugliness of the subprime mortgage crisis of 2008. He, like so many others, is hinting or at least hoping that funds will be applied appropriately to realistic energy projects that will meet ever growing demands. This has led a potential uranium squeeze to garner attention on Twitter, Reddit and other social forums like Clubhouse.
Squeeze is trending, and chat rooms are talking about uranium and it is about time.
Is Uranium on its way past $100, again?
Denison Mines is up roughly 80%. If you remember back in the last uranium run it went from $0.18 to nearly $12. Denison Mines is a Canadian uranium exploration, development, and production company in the Athabasca Basin region of northern Saskatchewan, Canada. There portfolio includes roughly 280,000 hectares.
Uranium Energy Corp has gone from 1.80 on January 1st, 2021 to $2.34 as of February 17, 2021. This is a strong uranium exploration and production company run by Amir Adnani and it has, with production-ready capacity of 4 million pounds U3O8 per year, more than is produced in the U.S.
Cameco is the second largest uranium producer and can turn on production at any time. The company has a licensed capacity to produce more than 53 million pounds of uranium concentrates annually, backed by 461 million pounds of proven and probable mineral reserves. The stock has risen roughly 20% since January 1st, 2021.
But in that same breath used to be Uranium One and that less then attractive for investing right now with its political risk and is a private. I mention it mainly because it is a well-known entity but also ties in with Anfield Energy hat we want is one of their projects and near-term production. There is excitement in production companies and royalty companies and certainly in the green and brownfield projects in this clean energy space but Anfield stands out because of the combination of project and near-term production. After all, the demands for energy are now. Any serious discussion of changing the energy profile means nuclear.
That means Anfield Energy.
Its aim is to:
- Produce uranium to leverage larger-scale, longer-term production opportunities in a higher-price uranium environment.
- Participate in ISR (solution mining) uranium production to leverage near-term production opportunities in a lower-price uranium environment.
- Create a robust U.S.-based energy company with significant potential production upside, through both organic growth and asset acquisitions.
The Charlie Property is in Wyoming and, along with the likes of Utah and Nevada, these are exceptionally mining friendly environments. The first hurdle is raising money for Charlie’s ISR well field development and pipeline construction. That does mean more stock issuance but certainly we would expect at higher prices as we are already seeing with Anfield already up 40% for the year. I hope you are noticing the uranium price and stock runs some of these companies went on. That certainly is not a promise that it will happen again but most uranium analysts and professionals in the space will caution that people get well positioned because when it takes off it starts moving fast. There is a lot of room for market cap growth with Anfield.
Ion energy is a junior exploration company that is a close comparison, and its has enjoyed a significant increase in stock growth from .32 on Jan.1 to .68 as of date of article with its market cap sitting at roughly 30 million. I mention this because it is having some success in its exploration endeavors and being rightly rewarded. Anfield has an impressive asset that can be online in the short term and Anfield Energy’s’ market cap is $23 MILLION. To me there is great potential, and I am not discounting that there are 172 million shares out. That is a big chunk, but one must think about what a producer would look for: if it wanted to add production quickly how easy is it to keep drilling compared to building out a pipeline and well field operations at Charlie at a relatively low cost of $7 million.
The company has other uranium assets in Utah, Colorado, and Wyoming to build out as well. There are plenty of good projects and Anfield has been patiently waiting with its core group of investors for the tides to change.
The final thought is Newsboy a gold project that adds another dimension and stability in case the Biden administration pivots and somehow can find a solution that is not oil and gas or uranium to meet demand. It leaves this project as a possible spinout and bonus play for current investors.
Is Anfield Energy perfectly set up? No. it is not perfect but there is a big opportunity to see it run and start hitting milestones. There is a big potential upside with the portfolio of properties especially if we just focus on the Charlie property. There is great room for growth here, and Anfield is perfectly positioned to be a part of that growth.
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Securities Disclosure: I, have been remunerated for this article. I do hold shares in Anfield Energy and have been paid for media and publishing.
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