What happened
Uranium Energy (UEC -0.59%) stock has been on a tear in recent months, and it seems unstoppable. The uranium stock jumped 15% in the month of March, according to data from S&P Global Market Intelligence, and is already up another 19.6% so far this month. Macro and company-specific news combined to drive the rally in the hot stock.
So what
Uranium Energy stock has been rising alongside uranium prices, but the stock shot up earlier this week after the company filed a technical report summary with the U.S. Securities and Exchange Commission (SEC) on April 4. The filing is important for two reasons: It confirms that the assets Uranium Energy acquired as part of its acquisition of Uranium One in December are material to the company's business and that the company has a valuable uranium resource. The Wyoming hub-and-spoke project has nearly 7 million pounds of inferred mineral resources and nearly 62 million pounds of measured and indicated mineral resources.
Image source: Getty Images.
This is the second hub-and-spoke project for Uranium Energy, with Irigaray processing facility acting as a hub for seven mining sites. The company acquired Irigaray -- one of the largest uranium processing facilities in the U.S. -- from Uranium One.
This development came around the same day uranium prices rallied and were within an arm's reach of their 11-year high reached on March 10.
On April 7, uranium prices touched the 11-year high of $61.60 per pound on speculation that bills to ban imports of Russian uranium, as part of U.S. sanctions, could see the light of day. Such a ban could disrupt uranium supply significantly in an already tight market as Russia is a key exporter of uranium to the U.S. Uranium fuel is used in reactors to generate nuclear energy, which accounts for almost 20% of the electricity generated in the U.S.
Now what
To be sure, Uranium Energy doesn't produce or sell any uranium for now, but the company has production-ready assets. Investors perhaps expect the company to start production soon to take advantage of the rise in uranium prices.
Uranium prices are headed even higher today and rose to $62.8 per pound, according to the latest data from TradingEconomics.com. If the U.S. imposes a ban on Russian imports, or Russia bans its uranium exports to the U.S., uranium prices should rally even higher.
In any case, investor interest in uranium stocks is unlikely to die down anytime soon now that the Russia-Ukraine conflict has led several nations to pay more attention to alternative sources of energy over oil and gas. With oil prices regaining ground and natural gas prices hitting multiyear highs on Friday, the prospects for nuclear energy looks even rosier, and that could help Uranium Energy stock sustain momentum.
