Uranium was first discovered in Ontario in 1953.This was the Elliot Lake Mines in Elliot Lake, Ontario, owned by Denison Mines.But since then uranium prices were consistently depressed over the past several decades.Now however parameters have changed.For example,the price of uranium in 1953 was $3.00 a pound.Now the price is about $91 per pound.This was because of the tremenduous run-up in price in the last 3 years.But the uses for uranium have increased also creating more demand for the product.Uranium is mainly used for electric power generation.But it is also used for medical isotopes and electric vehicles
As the price for gas-fired transportation increases,small increases in the price of electric vehicles still make them seem relatively cheap.Although the price per barrel of oil has stalled recently this blog sees the price of oil back on trend by late 2025.If so then this leaves a gap in the demand for gas-fired vehicles. This gap will be filled by electric vehicles.And so total demand for electric power will increase.Just as in the picture below. And this will be another factor increasing the demand for uranium.
On the other hand,most investors have really little awareness of how important nuclear energy is in the production of electricity.In 2024 nuclear energy provided 20% of U.S. electrical requirements.Coal provided as much electrical power but nuclear energy and natural gas provided the most power at about 32% of electrical power in U.S.A. This blog sees enviromentalists putting more pressure on the production of coal and it gradually becoming less important .However it's share could easily be taken up by uranium.As the price of uranium shows little price increases in the short run while natural gas moves closer to the $4.00/boe.This blog predicts that the demand for uranium- produced electric power will increase and the demand for natural-gas produced will falter.
Supply of Uranium
It is commonly known that the biggest ore body of uranium is the Macarthur River mine in northern Saskatchewan.But the second biggest deposit is the Denison mine complex in Wheeler River in Saskatchewan.Denison also has some properties in Ontario.These reserves plus a few smaller deposits in U.S.A. ensure that nuclear energy will be relatively cheap for a long time. 20 years ago it was thought that a nuclear plant could only endure for 20 years but now it is expected to last for 80-100 years - a substantial change in parameters.But it is not known how long the original fuel can produce power without some kind of enrichment cost. Still the cost per kilowatt hour is coming down not upwards.
Over a number of years the cost of nuclear energy will be cheaper than providing electricity from natural gas.This blog expects that the price of natural gas will move up substantially even in 2025.While the replacement and enrichment of nuclear fuel in the plant will be cheaper than replacing the original fuel.And a new competitor for the production of electricity will be renewable energy such as wind turbines and solar power.Over a 10 year period renewable energy may be slightly cheaper but it is not as reliable . Wind patterns and solar patterns shift up and down and may not reliably meet customer needs all the time.Consequently customers may insist on nuclear energy as backup because it is so reliable.
The Foremost Deal -A New Parameter
In 2024 and early 2025 Denison showed little sales and little revenues.So management searched for a new deal to revitalize DML.Management found a small lithium and uranium explorer listed on the Nasdaq.It promised Foremost (the new American miner) that it could have 70% of 10 non-core properties in exchange for a 20% stake in Foremost Technology .The deal closed and DML has even bought more shares.Although not abundantly clear it appears like it's biggest mines on the Wheeler river are not touched by this deal.And if DML buys the next option it will be the dominant shareholder in Foremost.Recently more analysts have been keenly watching the new DML.And they are expecting a very good quarter coming up for Denison.Some are forecasting that the stock price will move to $3.50-$3.75.And most forecasts are looking for the price of uranium to move up in the 2025-2029 period.One reason for the price increase is the increase in demand due to uranium used for the electric grid for electric vehicles.And this will only grow in the near future.
Denison has certainly added to it's market valuation through it's acquisition of Foremost Technology.Foremost has added also - by owning 70% of 10 fairly substantial uranium mines.Although it must be remembered that these are non-core properties for Denison..DML still owns 95% of the successful Pheonix ,McClean Lake and Cigar Lake mines.And now DML owns about 20% of Foremost Technology.This is part of the reason why several analysts see a good second quarter for Denison Mines.
Several analysts have predicted a $3.49-$3.75 price tag for DML in Q2.This seems a little high given it's present price but $3.00-$3.25 seems to be a realistic target.And if the price of oil continues to rise then electric vehicle production will increase and more electricity will be needed in the electric vehicle grid.
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