New Mexico Geological Society Annual Spring Meeting
April 7, 2017

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Why I Remain a Uranium Bull

Michael S. (Mickey) Fulp

Mercenary, LLC, Albuquerque, NM, 87105,

Uranium has undergone severe bull and bear market cycles in the 21st Century with the spot price ranging from $10/lb U3O8 in 2000-2004, $135 in 2007, $40 in 2009-2010, to $73 in February 2011. It reached a 12-year low of $18 in late 2016 and currently stands at $25/lb. The nuclear reactor incident at Fukushima in March 2011 caused a crash of uranium stocks and subsequently, the price. This unique event ushered in a bear market for uranium with decreased demand from Japan, which once used 12% of world uranium in 55 reactors and now has three reactors online. Germany halved its demand by shuttering eight of 17 reactors. Despite a short-term oversupplied market, the uranium outlook is quite positive for the mid- to long-term. In 2015, nuclear reactors provided 11.5% of world electrical energy and 19.5% in the US. We consumed 29% of world supply, about 49 million pounds U3O8 for 99 operating reactors, but produced less than 7% of domestic needs. Furthermore, security of supply is tenuous. Six of the top ten producing countries have corrupt and/or unstable governments unfriendly to the USA. 59% of 2015 world uranium came from Kazakhstan (39%), Niger, Russia, Uzbekistan, China, and Ukraine. There are 447 operable nuclear power plants worldwide, 14 more than pre-Fukushima. 59 plants are under construction; 164 are planned. Yellowcake demand is projected at 3-4% annualized growth. With increased demand, new supply will come from both mined uranium and secondary supplies. Enrichment underfeeding will continue to be significant; recycling and reprocessing will produce only a minor part of supply. Mining will remain the major contributor but prices must increase before new projects come on stream. Major uranium districts face challenges in developing new projects because of economics, sustainability, and/or timing to production. They include: large ISR mines in Kazakhstan; the largest and highest grade unconformity mines of the Athabasca Basin; Niger’s world-class sandstone uranium mines; Namibia’s hard rock, low-grade, open-pit mines; and giant, high-grade unconformity deposits of Australia’s Northern Territory. The USA has uranium resources to return to self-sufficiency, but I question whether we can muster the political will once prices inevitably rise. Our sandstone-hosted resources include two very large, high-grade and three large, ISR-grade deposits in the Grants Mineral Belt; many small, moderate-grade deposits in Utah and Colorado; high-grade breccia pipes of the Arizona Strip; small ISR mines in Wyoming, Nebraska, and South Texas, and a large, high-grade deposit in Virginia. Commodity cycles ebb and flow but increasing demand for electricity continues unabated. There are 85 million more humans on Earth every year and one out of four people still retire at dark and rise at dawn. That paradigm is changing rapidly with urbanization in China and India. For at least the next two to three decades, nuclear energy will remain the planet’s primary source of environmentally friendly base-load electricity. And that is why I remain a uranium bull.


uranium, uranium spot price, supply and demand, nuclear power, electricity, resources, geologist, Mercenary Geologist,

pp. 31

2017 New Mexico Geological Society Annual Spring Meeting
April 7, 2017, Macey Center, New Mexico Tech campus, Socorro, NM