On December 2nd, Uranium Royalty Corp (TSXV: URC) announced that they have entered into a supply stream with CGN Global. This deal is for 500,000 pounds of U3O8 from CGN which will be delivered between 2023 and 2025 at a weighted average price of $47.71 per pound. 300,000 pounds will be delivered on October 20th, 2023 and the other 200,000 pounds will be delivered in 100,00 increments on June 14th, 2024, and April 2nd, 2025, respectively.
Uranium Royalty Corp currently has 3 analysts covering the stock with an average 12-month price target of C$6.33, a 26% upside to the current price. Out of the 3 analysts, 2 have strong buy ratings and the other analyst has a buy rating. The street high sits at C$7.50 while the lowest comes in at C$5.
In Canaccord’s note, they reiterate their C$7.50 12-month price target and speculative buy rating, calling the deal attractive. They believe that this deal will provide shareholders with some form of leverage, “at a time when prices are expected to rise due to a fundamental supply-demand imbalance.”
Canaccord believes that the term contracting cycle is now underway and that utilities are actively engaged in both off and on-the-market discussions. They believe that this will help lower volatility and tighten the spot market, while the general public will continue to worry about the security of the long-term supply of uranium.
Lastly, they add that if spot prices were to rise, Uranium Royalty would be well-positioned as they hold a total of 1,548,068 pounds of U3O8 at an average cost of $40.89.
Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
