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8/9/2016 by mdc
http://www.zimtu.com/i/pdf/ZimtuResearchApril2016.pdf
Chris Berry reports that nuclear power, despite its major PR challenges (relative to low natural gas prices, lack of state and federal support as a clean energy, Liberal hysteria about solar and wind demonstration projects producing high electric bills, etc.), nuclear power continues to remain a mainstay of the U.S. and global power mix. As reactor technology continues to advance and the need for clean and reliable sources of base-load (grid) power only become more evident as the global population continues to swell, nuclear power will remain firmly fixed in the global power mix.

A question for investors to consider is how to invest in this industry? With sentiment low in the wake of Fukushima (?Not really?) and stagnant uranium pricing, the framing of uranium as a contrarian opportunity is obvious. That may be about to change and so the timing seems favorable for a review of this industry and the possible opportunities therein. The relatively rapid value creation to shareholders from recent acquisitions in the Athabasca Basin and discoveries elsewhere in the world in the past four years underscores the potential for uranium.

With the need to renew long-term contracts, Berry expects to see utilities that operate the nuclear fleet in the market over the next 18 months securing long-term supply. One must also not forget about China voracious appetite for uranium which is underpinned
by its aggressive nuclear expansion. It would appear that a steady demand profile is facing an uncertain supply response.

Higher uranium prices are a must for significant exploration (but more development of mines) to meet the steady increase in demand and therefore positioning in select well managed uranium names with sound balance sheets should provide leverage to any increase in price.

Overall, although using some out of date information (2014 data, Japan nuclear recovery, etc.), this article is still a good read.

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