The Sprott Physical Uranium Trust (TSX: U.U for USD; U.UN for CAD) continues its new year shopping spree after it purchased 500,000 lb. of uranium oxide (U3O8) on Tuesday, its highest first-quarter buy in three years. Sprott shares soared to an almost one-year high.
The transaction brings its first quarter purchases to 1.25 million lb. of U3O8 and its total holdings to about 76 million lb., BMO Capital Markets analyst Helen Amos said in a note on Wednesday. Sprott’s uranium now has a total value of $7.24 billion (C$9.8 billion).
Spot price up 11%
Meanwhile, the uranium spot price also continues to rise, reaching $91.10 per lb. on Wednesday, marking an 11% rise since the start of January.
The spot price was last at that level in April 2024, “highlighting the impact that financial purchasing can have on prices,” Amos said.
Sprott shares gained 4% to $23.29 (C$31.62) apiece on Wednesday morning in Toronto, for a market capitalization of $9.8 billion. The stock has traded in a 12-month range of $12.65 to $24.
Nuclear January
Sprott’s buys and the spot price rises come during a busy month for the nuclear sector, after Facebook parent company Meta in early January signed deals with three U.S. utilities to buy electricity for its data centres. The agreements with nuclear energy providers Vistra, TerraPower and Oklo cover up to 6.6 gigawatts of power by 2035 and are to support Meta’s operations and its Prometheus supercluster artificial intelligence servers in New Albany, Ohio.
Just east of Ohio in New York, the State Public Service Commission last week provided financial reassurance for the state’s nuclear power fleet under the 2025 zero-emissions credit program, according to a Commission release.
The four operating nuclear reactors in New York provide 21% of the state’s power needs and 40% of its zero-emissions power.
That followed New York Governor Kathy Hochul almost two weeks ago urging the Department of Public Service to set up an affordable pathway for four additional gigawatts of new nuclear power to create an 8.4 GW “backbone” of reliable energy.
Nuclear star rising
Agreements such as Meta’s occur in a wider political context favouring nuclear energy. The United States Energy Department earlier in January awarded $2.7 billion in contracts to three companies in an effort to boost domestic uranium enrichment capacity over the next decade and reduce reliance on foreign producers such as Russia.
Uranium enrichment is a key step in producing fuel that powers the 94 U.S. commercial nuclear reactors that generate a significant portion of the nation’s electricity.
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