Why Uranium? Why Laramide? Why Now?
Laramide owns one of the best development stage portfolios in the uranium sector, with large late stage cornerstone assets in Australia and the United States. These assets have scale and are on the lower tier of the cost curve. When we ask the question : Why uranium, Why Laramide, Why Now in today’s market, the answer is clear because of Laramide’s continuous advancement of projects, which have the potential to become uranium-producing operations in response to strengthening market demand.
The mining of uranium is the first phase of a multi-stage process of the nuclear fuel cycle that ultimately produces fuel rods for commercial electricity generation. Nuclear power creates clean energy and benefits from the fact that it generates zero CO2 emissions. It is an important source of baseload energy supply in over 48 countries and is growing in adoption globally, particularly in emerging markets and in China.
Notwithstanding its positive attributes, nuclear power has faced significant near term demand challenges in the past decade. These include policy shifts which have promoted the rapid emergence of renewables (mainly wind and solar) as a competitive source of electricity supply and, more importantly, the abrupt shutdown of the Japanese fleet in 2011. The result has been a severe bear market, now in its sixth year, which has reduced the spot U price to a level ($20/lb approximately) that is unsustainable for even the most efficient producers. Fortunately, the maxim that “the cure for low prices is low prices” seems to be bearing out as significant production curtailments and closures have been progressively announced over the course of 2017. According to most industry analysts, the market rebalancing presently underway will almost certainly lead to future deficits and a dramatic improvement in the U price, with only the timing of the market inflection point in question.
While we believe this turning point may be close at hand, timing is the great unknown so we have managed Laramide through the downturn with a view to emerging stronger on the other side. This has meant minimizing unessential corporate spend, being opportunistic with respect to acquisition and other opportunities, and most importantly minimizing dilution of shareholder interests. We believe Laramide has one of the highest ratios of resources per share in the industry – with over one pound of uranium behind every share – and are positioning ourselves strategically to capitalize on the next bull market.
President, CEO and Director
Laramide Resources Ltd.