Uranium Royalty is making significant strides in securing its position in the uranium market with a series of strategic moves. The company has announced the acquisition of fixed-price uranium purchase commitments and the reception of its first delivery under a key purchase agreement. These developments are strengthening URC's physical uranium inventory, positioning the company for success in the burgeoning uranium industry.
URC has secured additional fixed-price uranium purchase commitments totaling 1 million pounds U3O8 in the current quarter. These commitments are set to be delivered at Cameco Corporation’s Blind River facility in Ontario, Canada, during the fourth quarter of 2023. The weighted average purchase price for these commitments is US$70.44 per pound, which underscores URC's prudent approach to capitalizing on the uranium market's dynamics. (It's noteworthy that the TradeTech spot price is US$73.50 per pound as at October 26, 2023.)
URC intends to fulfill these commitments through cash on hand and other liquid assets, demonstrating its financial strength and commitment to strategic growth.
In addition to the fixed-price commitments, URC has received the first delivery of 300,000 pounds U3O8 under its purchase agreement with CGN Global Uranium Ltd. This agreement, dated November 17, 2021, provides URC with exposure to an aggregate 500,000 pounds U3O8 from 2023 through 2025 at a weighted average price of US$47.71 per pound. The remaining 200,000 pounds are expected to be delivered in June 2024 and April 2025. This agreement further diversifies URC's uranium supply sources, enhancing its resilience in the market.
These strategic purchases will increase URC’s physical uranium inventory to approximately 2.65 million pounds U3O8 at a weighted average cost of approximately US$54.08 per pound. This inventory is valued at approximately US$195 million based on the TradeTech spot price as of October 26, 2023. The company's focus on maintaining a diversified and cost-effective inventory underlines its long-term vision and commitment to shareholder value.
Scott Melbye, the Company’s Chief Executive Officer, expressed his perspective on the strategic moves, stating: "In the early stages of this uranium bull market, we recognized an opportunity to grow our physical uranium holdings alongside our royalty business, which includes 20 diversified royalties on 18 projects. These strategic purchases provide shareholders exposure to the strong fundamentals supporting a rising uranium price and a future source of liquidity to acquire additional royalty and streaming assets as opportunities arise."
Uranium Royalty Corp. (URC) stands as the world's only uranium-focused royalty and streaming company and the only pure-play uranium listed company on the NASDAQ. URC offers investors exposure to the uranium commodity price through strategic acquisitions in uranium interests, encompassing royalties, streams, debt, and equity in uranium companies, as well as through trading physical uranium. The company's multifaceted approach positions it uniquely in the uranium sector, making it a key player to watch as the industry continues to evolve.
With these recent developments, Uranium Royalty Corp. demonstrates its commitment to capitalizing on the growing global interest in nuclear energy and the increased demand for uranium. As the company continues to execute its strategic vision, it is poised for a bright future in the uranium market.
