Justin Huhn of Uranium Insider discusses the Sprott Physical Uranium Trust and other important catalysts in the uranium market.
The Sprott Physical Uranium Trust (TSX:U.UN) has brought renewed life to the uranium market since launching over the summer, and experts believe it’s just getting started.
Speaking to the Investing News Network, Justin Huhn, founder and publisher of the Uranium Insider Pro newsletter, said the market is likely to move quickly over the next 18 to 24 months.
“It’s a unique period of time,” he said in a video interview. “(Sprott is) just new to the scene, they really shook things up — I mean, nobody expected a 50 percent move in the uranium price based on the 10 million pounds they purchased. Nobody saw that coming.”
Huhn touched on the mechanics of the Sprott trust, explaining that it’s able to issue shares into the open market whenever it’s trading at a 1 percent or greater premium to its net asset value.
From August 17 to the time Huhn was speaking on September 24, the trust had issued shares into the market to raise over US$420 million and had bought 10.3 million pounds of uranium.
The activity has sent the uranium spot price flying — Huhn noted that it rose about 55 percent, going from US$32 per pound to US$52 in about four weeks, although it’s cooled off since then.
He’s not interested in making specific future price predictions, but did say the price could “absolutely” reach the the heights it saw during the last cycle.
“There’s really bullish price forecasts being thrown out there, and I think that we see a pretty fast-moving market probably in the next 18 to 24 months,” commented Huhn.
In terms of how investors can get exposure to the market, Huhn said he continues to prefer companies that have their own catalysts and are moving forward regardless of market activity. “Those are our favorite stocks — the companies that you can can gauge what they’re going to do not only based on their stated plans, but based on inferences from management.”
Watch the interview above for more from Huhn on the uranium market.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.