Cameco Corporation (USA) (CCJ): New Report States Uranium Demand to Grow at 4% CAGR

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Higher costs and the above mentioned security-of-supply concerns should support long-term prices in the $80s or $90s per pound. To be clear, we may not see those prices next quarter or even next year, but they’re coming. This would not cause angst among utility customers, because the cost to utility customers of uranium fuel is a relatively small part of operating costs.

Which Uranium Companies Should You Buy?

Cameco Corporation (USA) (NYSE:CCJ) is a powerhouse in North America and has ample organic growth opportunities. Its stock could be poised for a nice move. For investors looking for bigger returns, albeit with more risk, uranium juniors are worth looking into.

Denison Mines Corp (USA) (NYSEMKT:DNN) is an emerging star in Canada. Having sold its U.S. assets to Energy Fuels, Denison is the top exploration play in and around the Athabasca region. The company is frequently mentioned as a takeout target, with Rio Tinto plc (ADR) (NYSE:RIO), Areva and Cameco Corporation (USA) (NYSE:CCJ) cited as the most likely suitors. Denison Mines Corp (USA) (NYSEMKT:DNN) recently finalized the acquisition of Fission Energy. The company now has a range of early-stage to later-stage exploration and development projects. The Athabasca region has the highest-grade uranium ores in the world.

Energy Fuels generated a lot of buzz last week by announcing its intent to acquire Strathmore Minerals. The new and improved Energy Fuels would be the largest uranium company in the U.S. In addition to a combined 127 million lbs of NI 43-101 compliant resources, Energy Fuels owns the White Mesa Mill, the only operating conventional uranium mill in the U.S. White Mesa has permitted annual capacity of 8 million pounds. See these excellent articles on Energy Fuels, [here] and [here].

Uranium Energy Corp. (NYSEMKT:UEC) is another highly prospective U.S. uranium company. Uranium Energy is in production and is growing. It utilizes an in-situ approach called solution mining to extract uranium. The company has a cluster of in-situ mining development projects in Texas, in close proximity to the its Hobson Facility. Uranium Energy Corp. (NYSEMKT:UEC) is looking to make additional tuck-in acquisitions of assets within trucking distance of Hobson.

Conclusion

There have been many recent articles written on investment blogs and by professional newsletter writers about a bull market in uranium stocks. Most articles recommend buying Cameco Corporation (USA) (NYSE:CCJ) to ride the upside. Investors watching the spot uranium price may miss a big move in uranium stocks because the long-term contract price is the key variable. Cameco Corporation (USA) (NYSE:CCJ) will provide good returns when uranium prices rebound. Substantially higher returns could be possible, albeit with greater risk, by investing in junior miners like Denison Mines, Energy Fuels and Uranium Energy.

The article New Report States Uranium Demand to Grow at 4% CAGR originally appeared on Fool.com and is written by Peter Epstein.

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