Shares of Ur-Energy (URG +21.05%) are on fire today, soaring 23% as of Tuesday noon.
There’s no earnings report and no corporate updates. Instead, a multi-billion-dollar announcement just dropped elsewhere in the industry, and investors believe this single move could reshape the U.S. nuclear supply chain, instantly turning attention to Ur-Energy.
Image source: Getty Images.
The uranium enrichment and Ur-Energy link
Urenco, a global supplier of uranium enrichment services and owned jointly by the U.K. and Dutch governments and two German utilities, has announced a multi-billion plan to expand capacity by nearly 50% at the only commercial uranium enrichment facility in the U.S.
So what does this have to do with Ur-Energy?
The thing is, natural uranium that’s mined from the ground contains a minuscule amount of fissionable isotope and therefore has to be “enriched” further at facilities like Urenco’s to make it usable for nuclear reactors.
These enrichment facilities cannot operate without a steady stream of raw uranium feedstock. That means Urenco’s expanded facility will require large amounts of uranium, effectively giving domestic miners a large, long-term customer right in their own backyard.
Today’s Change
(21.05%) $0.36
Current Price
$2.07
Key Data Points
Market Cap
$679M
Day’s Range
$1.73 – $2.15
52wk Range
$0.77 – $2.35
Volume
30.8M
Avg Vol
8.5M
Gross Margin
-20312.16%
Ur-Energy mines and processes uranium at its Lost Creek mine, and recently started mining at its Shirley Basin project in Wyoming. It’s a historic restart as Shirley Basin has been suspended since the 1990s. That’s one big reason investors view Ur-Energy as an immediate beneficiary of the massive upcoming enrichment pipeline from Urenco.
What this means for Ur-Energy investors
Urenco’s announcement also has broader implications for the U.S. uranium industry, as Urenco’s capacity expansion comes at a critical turning point when the U.S. is preparing to completely ban all Russian uranium imports from Jan. 1, 2028. With two flagship uranium assets in Wyoming’s Great Divide Basin, Ur-Energy has the potential to become an important supplier for an expanding domestic market provided it can execute.
Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
