Citi Forecasts Uranium Price Rebound as Market Dynamics Shift

The uranium market, which has been a significant investment theme over the past 18 months, is poised for a potential rebound according to recent analysis from Citi. Despite a steady decline in prices since reaching over US$107/lb in February, Citi maintains a tactically bullish outlook for the market's potential in 2024 and beyond. Citi's latest research attributes the recent price stagnation to low trading volume and liquidity but anticipates a rebound as investor focus shifts. The financial institution forecasts that uranium prices could rise to US$98/lb later this year, with an average of US$94/lb. By 2025, prices could reach US$110/lb, implying a potential upside of 36% from current levels.

The analysis points to increased uranium production as a factor in the recent price dip, with Kazakhstan's output expected to reach 59 million lbs this year. However, production growth is projected to slow sharply later in the decade. Simultaneously, inventories are forecast to fall by 20 million lbs by 2030, putting 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. While no new nuclear plants are currently planned, the financial institution expects utilities to focus on extending plant life and restarting shuttered facilities, potentially boosting uranium demand, especially in the United States.

As the broader uranium market shows signs of a potential recovery, companies like Generation Uranium are positioning themselves to capitalize on this trend through strategic projects and exploration initiatives. Generation Uranium is making significant strides with its Yath Uranium Project in Nunavut, Canada, holding a 100% interest in this project located in the prolific and under-explored Thelon Basin. The Yath project is strategically positioned along the trend of the Lac 50 uranium deposit, which contains 43 million lbs 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 potential. In June, Generation Uranium acquired the Yellow Frog and Pink Toad Uranium Projects along the Angilak Trend in Nunavut, Canada. These acquisitions expand the Company's Yath Uranium Project by over 45%, bringing its total coverage to 123.45 km². Yath now extends northward, coming within 3 kilometers of Atha Energy Corp's Angilak Project. To advance the Yath Project, Generation Uranium has partnered with APEX Geoscience. APEX will provide geological consulting services and assist in preparing and submitting exploration authorization applications for a planned diamond drilling campaign.

This 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 its cutting-edge Mobile MagnetoTellurics technology to enhance exploration capabilities in the region. These strategic moves position Generation Uranium to benefit from the anticipated uranium price recovery while contributing to the development of new uranium resources in a promising geological region.