Anfield Energy: Red Cloud Pushes $0.20 Price Target Amid Heightened Uranium Demand
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A recent report by Red Cloud suggests significant growth and positive prospects for the uranium sector, attributing the rise in prices to a combination of factors, including increased public acceptance of nuclear power, improved economics, and the need for a secure supply.
“Given the recent divergence of spot prices and term prices in the uranium market, we introduce LT spot price assumptions of US$120/lb for 2024, US$135/lb for 2025, US$150/lb for 2026 and US$175/lb in 2027,” the report said, arguing that “current uranium prices are still just half of previous highs when considering inflation.”
Red Cloud’s updated uranium price assumptions reflect a bullish outlook, with spot and term price forecasts indicating significant growth potential. The divergence between spot and term prices, reminiscent of the market dynamics observed between 2007 and 2020, underscores the current market volatility and the potential for further price appreciation. With long-term spot price assumptions reaching as high as US$175/lb by 2027, it is evident that current uranium prices are still well below historical highs, even when adjusted for inflation.
The impact of these price updates is reflected in the revised price targets for various companies within the sector. While ratings remain unchanged, target prices have generally seen an upward revision, particularly for firms with higher sensitivity to uranium prices due to elevated cost profiles.
Among the companies highlighted in the report is Anfield Energy Inc. (TSXV: AEC), which is designated as a BUY with a target price of $0.20 — one of the cheapest among developer peers — by analyst David A. Talbot. Anfield is positioned as a developer with a market capitalization of $91 million, representing a 13% increase month-over-month.
The company’s key asset, the Shootaring Canyon mill in Utah, along with its near-production uranium and vanadium assets, forms the basis of its hub-and-spoke model for production. With plans to develop projects in Utah and Colorado, including the Velvet-Wood and Slick Rock projects, Anfield aims to capitalize on the growing demand for uranium and vanadium.
READ: Anfield Energy Set To File Restart Application For Shootaring Canyon Mill In Q1
Anfield’s strategic acquisitions, including the Marquez-Juan Tafoya project in New Mexico, further enhance its portfolio and provide exposure to other major uranium camps in the US. Key catalysts for Anfield’s growth include the submission of the Shootaring Canyon mill restart application in the first quarter of 2024 and the anticipated mill restart in the coming years.
Anfield Energy last traded at $0.090 on the TSX Venture.
FULL DISCLOSURE: Anfield Energy is a client of Canacom Group, the parent company of The Deep Dive. Canacom Group is currently long the equity of Anfield Energy. The author has been compensated to cover Anfield Energy on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. We may buy or sell securities in the company at any time. Always do additional research and consult a professional before purchasing a security.
