Citi Forecasts Uranium Price Rebound as Supply Constraints Loom

The uranium market appears poised for a significant rebound according to recent analysis from Citi, despite experiencing a steady price decline since reaching over US$107 per pound in February. Citi maintains a tactically bullish outlook for uranium's potential in 2024 and beyond, forecasting prices could rise to US$98 per pound later this year with an average of US$94 per pound. By 2025, prices could reach US$110 per pound, representing a potential 36% upside from current levels. The financial institution attributes recent price stagnation to low trading volume and liquidity but anticipates a shift in investor focus that could drive the rebound.

Increased uranium production has contributed to the recent price dip, with Kazakhstan's output expected to reach 59 million pounds this year. However, production growth is projected to slow sharply later in the decade while inventories are forecast to fall by 20 million pounds by 2030. This combination of factors is expected to put uranium production back at the center of price determination. On the demand side, Citi highlights the growing need for low-carbon energy and rising global power consumption as key drivers. While no new nuclear plants are currently planned, utilities are expected to focus on extending plant life and restarting shuttered facilities, potentially boosting uranium demand particularly in the United States.

As the broader uranium market shows recovery signs, companies like Generation Uranium are positioning themselves strategically. Generation Uranium holds a 100% interest in its Yath Uranium Project located in Nunavut, Canada's prolific and under-explored Thelon Basin. The project is strategically positioned along the trend of the Lac 50 uranium deposit, which contains 43 million pounds of uranium and is currently being developed by Latitude Uranium, a company recently acquired by ATHA Energy for $64.7 million in an all-share deal. Historical exploration at Yath has consistently indicated uranium concentrations between 1% and 10% U3O8, underscoring its significant potential.

In June, Generation Uranium expanded its portfolio by acquiring the Yellow Frog and Pink Toad Uranium Projects along the Angilak Trend in Nunavut, Canada. These acquisitions expanded the Company's Yath Uranium Project by over 45%, bringing total coverage to 123.45 square kilometers. The expanded Yath project now extends northward, coming within 3 kilometers of Atha Energy Corp's Angilak Project. To advance exploration efforts, Generation Uranium has partnered with APEX Geoscience for geological consulting services and assistance in preparing exploration authorization applications for a planned diamond drilling campaign. The collaboration includes coordination with key regulatory bodies to ensure compliance with all regulations.

Furthermore, Generation Uranium has launched an advanced airborne electromagnetic survey at the Yath Project in partnership with ATHA Energy Corp. The survey is being conducted by Expert Geophysics Ltd. using cutting-edge Mobile MagnetoTellurics technology. This comprehensive approach to exploration and development positions Generation Uranium to potentially capitalize on the anticipated uranium market recovery while contributing to the global supply of nuclear fuel needed for clean energy transition.