Uranium spot prices skyrocketed from $30 USD/lb to more than $50 USD/lb beginning in August of 2021. A significant reason for this rally is the world’s transition towards decarbonization and sustainable energy, which has…
increased the role of nuclear energy.
However, in the past week prices have fallen more than 15% to $42.70. Which means now could be a good time to buy the dip, as uranium is expected to grow over the coming decades. The 2021 edition of the World Nuclear Association’s report reveals a 27% increase in uranium demand between 2021 and 2030. This trend should continue, increasing uranium demand by 38% during 2031-2040.
Ur-Energy Inc. (URG)
Based in Littleton, Colorado, Ur-Energy Inc. is engaged in the exploration, mining, and processing operation of uranium.
Since the beginning of the year, shares of URG are up around 133.4%, outperforming its benchmark as well as the broader market.
Financial Performance & Analysts Outlook
On November 1st, Ur-Energy reported earnings for the third quarter of 2021. In Q3, the company’s revenue was reported at $9,000, beating Wall Street estimates by $9,000. However, the company does not plan to sell its uranium inventories in 2021, which is why its revenues may continue to be near the zero thresholds. Its third-quarter GAAP EPS stood at ($0.04). However, URG failed to beat analysts’ estimates, missing by ($0.02) in EPS.
The most interesting fact in its report is the company currently holds 285,000 pounds of ready-to-sell uranium in inventory at a conversion facility. The company said the inventory has a dollar value of about $13.4 million.
Additionally, the company has a healthy balance sheet with a strong liquidity position. As of September 30th, 2021, it had total cash of $33.4 million, which is a significant increase compared to the December 31st, 2020 figure of $4.3 million. With a total debt of $12.3 million, its total net cash stood at $21.07 million. Considering the cash burn rate of $9.1 million for the nine months ended September 30th, 2021, the company won’t likely face any liquidity problems for the next 24 months.
Analysts have a bullish outlook regarding URG, expecting its sales to stand at…
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