North Shore Uranium

Overview

North Shore Uranium (TSXV:NSU) is a Canadian exploration company focused on discovering economic uranium deposits at the eastern margin of Saskatchewan’s world class Athabasca Basin in Canada.

North Shore has two highly prospective exploration properties totaling 60,210 hectares - Falcon and West Bear - which are located in close proximity to two globally significant active uranium mines, Cigar Lake and McArthur River, that produce 100 percent of Canada’s uranium.

The ongoing geopolitical events coupled with the global net-zero goal have created transformative tailwinds for the nuclear power industry, from both a demand and supply perspective. Nuclear power is critical for meeting CO2 emission reduction goals set by the Paris Agreement. There is increasing recognition that nuclear power, with its clean emissions profile, and reliable and secure base load characteristics has a key role to play in achieving decarbonization goals. This is evident in the recently released World Energy Outlook 2023 published by the International Energy Agency (IEA) which highlighted the role that nuclear energy can play in making the journey towards net-zero faster, more secure and more affordable.

According to the World Nuclear Association, there are currently 440 reactors operating globally. This capacity is increasing steadily with about 60 reactors under construction (in 17 countries) and a further 112 reactors planned and 318 reactors proposed. Governments across the world, including North America, Asia and Europe, are backing an expansion of nuclear energy. This should drive demand for uranium over the coming decades.

According to the World Nuclear Fuel Report issued by the World Nuclear Association, the demand for fuel for nuclear reactors is projected at 65,650 tons in 2023, further increasing by 28 percent to 83,840 tons in 2030, and then nearly doubling to 130,000 tons by 2040. On the supply side, the situation remains challenging particularly due to the Russia-Ukraine conflict. Global supplies remain constrained mainly due to years of under-investment in new production, monopoly of state-owned entities, transportation risks and geopolitical uncertainties. For 2023, UxC, a leading market research firm, projects a 52-million-pound (Mlbs) deficit with global demand at 195 Mlbs and supply at 143 Mlbs. The deficit is expected to further jump to 113 Mlbs by 2025.

As a result, spot uranium prices have seen a big jump. Now at over US$80/lb, it is the highest it’s been since 2008. The prices are likely to remain firm given that the uranium supply/demand balance remains tight. As noted above, it is likely to get tighter in the next 24 months as demand continues to rise, while new supply remains limited, and inventories/stockpiles keep getting drawn down. Further exacerbating the supply is the fact that more than 50 percent of global uranium production comes from countries with significant geopolitical risk.

This is where companies such as North Shore Uranium, with a presence in geopolitically stable jurisdictions such as the Athabasca Basin, stand out. North Shore offers investors an opportunity to participate in the uranium upswing and profit from higher prices.