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This Often-Ignored Commodity Just Hit 15-Year Highs.
Here's Why it Will Keep Going Higher
The Second Nuclear Renaissance
When nuclear power was first unleashed on the world, it was hailed as a modern-day miracle.
President Eisenhower gave his famous “Atoms for Peace” speech before the UN in 1953, promising to move from the atom bomb to atomic energy. The money quote — “The United States pledges… its entire heart and mind to finding the way by which the miraculous inventiveness of man shall not be dedicated to his death, but consecrated to his life.”
That jumpstarted an enormous build-out of nuclear energy, with entirely new industries — like uranium mining — coming into being.
The “Uranium Boom” swept resource-rich areas surrounding the Rockies and other promising geologic areas. The US was the world's largest uranium producer by 1980, responsible for 24% of global supply.
By then, nuclear made up a major part of the world's energy mix, with some countries — like France — eventually producing most of their energy from nuclear power.
But that was, until recently, the high-water mark for uranium.
Environmental activists fought against it on the grounds that we had no way to safely store nuclear waste.
Fossil fuel companies fought against it as an energy competitor.
And high-profile accidents turned public sentiment against it.
But here's the thing.
Nuclear is actually the safest fuel we have today, after solar power. Even safer than wind or hydroelectric.
Nuclear is also the most concentrated form of power on earth. A single uranium pellet produces as much energy as one ton of coal.
Nuclear is the most efficient form of power. The US Navy uses nuclear to power its subs and carriers so its ships can go months at sea without needing resupply (and when resupplies come, it is for things like food, not nuclear fuel).
And nuclear is the cleanest form of energy generation we have as well, producing no atmospheric pollution.
Environmentalists have decided the loud-but-small risks that come with nuclear are better than the risks that come from continuing to burn fossil fuels at current rates.
But the largest reason for the turnaround on nuclear power? It has almost entirely solved its two largest problems.
This Isn't Your Grandfather's Nuclear Power Plant
Today, many countries recycle their nuclear waste — and the US is likely to soon follow suit.
When uranium fuel is taken out of service — usually after about five years — it still has around 90% of its energy potential.
Countries like Japan and France already are reusing and recycling their nuclear “waste” — showing that it actually isn't waste at all!
That greatly reduces the pollution issue.
But perhaps even more importantly, nuclear has tamed the risks presented by accidents as well.
Consider — in 2011, Fukushima, Japan was hit with a massive earthquake, followed by a massive tsunami.
And that double-whammy damaged one of Fukushima's nuclear reactors badly enough to cause an explosion and evacuate the surrounding area.
However, only the oldest reactor was affected. All the other reactors held up fine.
And the fallout from the Fukushima accident? One death. Total.
No one died from direct exposure. One worker developed lung cancer years later. And the cancer rate amongst the surrounding population has remained steady — no elevation.
The simple fact is modern nuclear reactors are extremely safe. They are designed to withstand military attacks.
The most modern can shrug off natural disasters without even interrupting service.
That could be why the world is now going on a nuclear spending spree.
Today, there are 436 nuclear power plants in the world — with the US holding the most, at 93.
After seeing how well Fukushima withstood disaster, and how nuclear waste is becoming a shrinking problem, countries are diving back into nuclear power.
There are currently 60 new nuclear plants under construction, with another 110 in the planning stages and 300 more proposed.
The International Atomic Energy Agency projects nuclear generation will increase 50% by 2050.
Meanwhile, many nuclear power plants that were scheduled for retirement are being given new leases on life.
France recently extended the life of its oldest plants — and then announced the construction of 14 more, as it moves away from renewable energy and towards nuclear.
With the nuclear power market heating up, it should come as no surprise that the uranium market is mirroring it. Indeed, uranium just hit 15-year highs at $92/lb.,
But to date, the main reason that uranium prices have gone higher isn't the new planned plants — which aren't online yet.
It is the extension of life on old plants, and the lack of investment in uranium exploration.
It has gotten so bad that the United States, once the leading uranium producer in the world, now is responsible for less than 1% of global supply.
42% comes from Kazakhstan.
The US has made securing uranium supply from friendly countries a top priority, with uranium clearly a strategic resource.
And thus, the next great uranium boom has begun.
Established producers like Cameco are likely to do well over the next few years, as they acquire uranium resources and produce the fuel necessary for a rapidly expanding industry.
However, the biggest winners in the early days could potentially come from smaller exploration companies.
With the need to secure more supply, the first step is finding uranium resources.
And, when small exploration companies find those resources, that tends to produce the largest, fastest increase in value over the life of a project.
This pattern is known as the Lassonde Curve.
And it is the reason why, if you want to take advantage of the nuclear renaissance, you should look to exploration companies operating in prime real estate.
Companies like Stallion Uranium (STUD.VN) (STLNF).
Stallion owns the largest project in the underexplored western side of the Athabasca Basin in Saskatchewan, Canada.
That's important for two reasons.
First — the Athabasca Basin is the richest uranium deposit in the world. It currently produces over 13% of global supply, and uranium is found at concentrations up to 20 times greater than other deposits.
But just as important — Stallion's project shares the same geology, and actually abuts the projects of Cameco, NexGen and others.
This is perhaps the most prime piece of real estate in the uranium exploration sector.
That's why Stallion just added Matthew Schwab, an esteemed geologists working in the uranium sector today, as an adviser.
Schwab was instrumental in locating the nearby Arrow uranium deposit in the southwestern Athabasca, found in 2014. He was a key member of the Hathor development team, which found the roughrider uranium deposit, since sold for $654 million to Rio Tinto.
Schwab sees the same promise in Stallion's project. That is why he has climbed aboard just prior to exploratory drilling, scheduled to start in the first quarter of 2024.
When preliminary results are announced later this year, that could be the moment the Lassonde Curve kicks in and we see the largest, fastest gains out of this project.
If you are looking for a way to ride the nuclear renaissance, you should consider a company like Stallion Uranium (TSX.V:STUD,OTC:STLNF).
To learn more about the company's favorite project — along with its portfolio of other potential gold mines — click here.
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