Shares of Denison Mines (DNN 4.20%) surged 34% on Tuesday as traders bid up the prices of uranium stocks.
Rare cold weather in the southern U.S. has strained the region's power grid in recent days. That's led to a surge in the price of electricity and a rebound in the price of natural gas. It's also reshaping investors' views of the nuclear power industry.
"The cold weather resulting in peak energy demand shows that the steady, baseload supply from nuclear plants is invaluable in times like this," Uranium Energy CEO Amir Adnani told MarketWatch. "Thus, a greater appreciation of the long-term benefits from nuclear power, which is also the only non-emitting baseload electricity source, should lead to rising uranium demand in the coming years."
Denison Mines owns a 90% stake in the promising Wheeler River uranium mine development project. The company announced on Feb. 8 that it was resuming the environmental assessment process and ramping up its field-testing activities. The next day, Denison announced encouraging results from its exploration and expansion drilling program. On Feb. 10, Denison said it raised $25 million via a stock and warrant sale that it would use to fund its operations.
These positive developments are likely spurring many investors to buy shares of Denison Mines as a means to potentially profit from an uptrend in uranium demand.