Although he still likes gold, silver and copper, Lobo Tiggre of IndependentSpeculator.com said uranium is his "highest-confidence thesis for 2022."
Lobo Tiggre: Uranium is My Highest-Confidence Thesis for 2022youtu.be
The uranium sector was abuzz earlier this month with the news that the Biden administration is looking for US$4.3 billion to support enrichment in the country. But what does that really mean for the industry?
Speaking to the Investing News Network at the Prospectors & Developers Association of Canada (PDAC) convention, Lobo Tiggre said the news is material, but emphasized that it's still early days.
"The first point to keep in mind here is that just because somebody says, 'Oh, this is a good idea, we should do it, here's this proposal' — that doesn't mean it's passed," said Tiggre, who is the editor and founder of IndependentSpeculator.com. "I don't think there's even legislation introduced yet, let alone what comes out of the sausage factory in Washington, DC, at the end of the day."
Aside from that, he explained that "the devil will very much be in the details" — for example, currently it's unclear whether the uranium being enriched would be mined by US producers or imported from other countries.
Beyond this recent announcement, the uranium market has diverse supply- and demand-side factors working in its favor, and Tiggre said that although he remains positive on gold and silver, and believes copper has a bright future, he considers uranium his "highest-confidence thesis for 2022."
"Of all these metals and minerals, uranium is the only one that's still below the average incentive cost or cost of production around the world right now," he explained during the conversation. "It's the only one that you can actually say is still too cheap, that the price has to go up for there to be more — that's unique."
As always, Tiggre cautioned that this doesn't mean the uranium story can't go wrong; although nuclear incidents are few and far between, they are always a possibility and can be devastating. For that reason and others, he believes it's important for market participants to minimize their risk.
"I love (uranium), I'm a bull, but don't be silly — there's no crime in taking a few profits along the way," he said.
When asked to contextualize uranium's place within the broader market, Tiggre was optimistic.
"The positive note to end on is I do see this actually as a source of opportunity. I see it as an opportunity now, I see great uranium companies on sale now," he said. "And if we do get a market crash, I think we'll get a gift — we'll get a shot at stupid cheap prices on fantastic companies."
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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.
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