HIGHLIGHTS
- Price rises to 2025 high as fund expected to buy uranium
- Uranium miner canceling contracts contributed to run-up
The spot uranium price jumped climbed nearly 9% June 16 on news that the world's largest physical U3O8 fund raised $100 million in bought deal financing with a leading Canadian investment bank.
Platts assessed the U3O8 current-month spot price in Canada at $75.45/lb as of 1 pm ET June 16, a $6.20/lb day on day jump compared to $69.25/lb the previous day.
The $75.45/lb price is the highest assessed by Platts since Dec. 16, 2024. Since late January, the uranium price has ranged between $63/lb and $71.50/lb.
"I would say the primary driver [of the price jump] was SPUT," an intermediary said June 16, referring to the announcement by the Sprott Physical Uranium Trust. The trust will use the money to buy U3O8.
A second intermediary that same day agreed, citing four deals totaling 400,000 lb heard done at successively higher prices early in the US trading day. Under one such deal, 100,000 lb will be supplied in France in August at $76.25/lb
Canaccord Genuity, a Canadian investment bank headquartered in Toronto, agreed to purchase on a bought deal basis 5.8 million shares at a price of $17.25/share, for gross proceeds to the trust of $100.1 million.
According to the company's website, the fund's NAV on June 13 was $4.63 billion. SPUT said in the statement the offering is expected to close on or about June 20. Its current uranium inventory totals 66.2 million lb U3O8, according to the website.
SPUT issues shares and buys and holds uranium on behalf of its investors. It can sell new shares to investors only when its stock price is higher than the underlying value of uranium and other assets it holds.
On June 12, the fund closed at a 0.34% premium to the value of assets and sold 387,900 shares, the first such premium on close since May 12 when it sold almost 1.5 million shares. SPUT last purchased uranium Nov. 19, acquiring 58,000 lb at $80.5/lb.
Separately, Australia's Peninsula Energy's announcement that it had mutually agreed with utility customers to cancel supply contracts could also have contributed to the 9% price spike.
"One could also read into it the announcement from Peninsula, but that would seem to be a much lesser impact," the first intermediary said.
Peninsula said it agreed with global nuclear utilities to cancel three sales contracts involving nearly 2 million lb over eight years. The company cited delays in the completion of a central processing plant at its Lance in-situ recovery operation in Wyoming as the reason for the cancellation.
Peninsula said June 13 that production at Lance is likely to be "materially lower" in 2026 and 2027 than previous guidance, and its securities were placed in a trading halt in April because it had not released updated guidance in months.
The Wyoming ISR project has struggled to meet production targets since restarting in December after it was mothballed for several years due to low uranium prices.