The Investing News Network caught up with Mickey Fulp at this year’s PDAC convention to talk all things uranium and gold mega mergers.
The Investing News Network sat down with Mercenary Geologist Mickey Fulp at this year’s Prospectors & Developers Association of Canada (PDAC) convention to gain insight into the current state and future of the uranium market.
Fulp also offered his perspective on the mega deals currently dominating the gold sector.
“Mining companies have not rewarded investors since the bull market for gold started in 2003,” he explained. “So I don’t really understand how getting bigger is intended to reward shareholders.”
“I’ve been an outspoken critic of all these mergers,” he continued. “The Barrick Gold (TSX:ABX,NYSE:GOLD) and Randgold Resources made some sense. Of the majors, over the last 15 years Randgold has performed better than Barrick or Newmont Mining (NYSE:NEM) or Goldcorp (TSX:G,NYSE:GG) have.”
The self-professed contrarian remains optimistic about the future of the uranium sector, even though mild volatility has kept spot prices hovering at or below US$29 per pound.
“I bought all my uranium stocks quite awhile ago,” he said. “I can’t tell you when it’s going to come, but there will be a uranium shortage, there will be great demand, the price will go up; and stocks are very dependent on the spot price.”
Another area that is bound to impact the uranium sector is the forthcoming decision on the Section 232 petition, the US’ investigation into national security issues around foreign uranium imports.
“Section 232 is a proposal on national security issues that would require that 25 percent of the uranium used by the US utilities to make electricity be supplied by domestically mined uranium,” said Fulp.
While the move would be a much-needed “shot in the arm” for US producers and developers, it could potentially create domestic supply and demand issues for the US, which imports the majority of the uranium it uses each year.
Canadian uranium producers may also be affected, although it’s too early to tell how impactful the quota would be on America’s northern neighbor. There is also the potential for the US to implement a “friendly/ally exemption,” which could ultimately position Canada favorably in relation to the uranium market in the years to come. A decision is expected in April.
Watch the interview above for more from Fulp on gold and uranium. You can also click here to view our full PDAC 2019 interview playlist on YouTube.
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Securities Disclosure: I, Georgia Williams, 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.