Advantages And Disadvantages Of Nuclear Energy
Best Leveraged Uranium Companies to Benefit from Increased Nuclear Energy Demand
By James Finch
Summary: Sprott Asset Management uranium expert Kevin Bambrough talked with us about the “second leg” of the current uranium bull market. Bambrough names his favorite uranium companies, where he believes there is still room for growth.
StockInterview: How does the major nuclear energy build up you envision impact uranium mining?
Kevin Bambrough: I think, with the passage of time, all types of mining will again be done again in the United States. They’re going to need the supply. There is no alternative. If you look at Energy Metals Corporation (TSX: EMC), part of their plan is to start with some ISL operations, some of which will come at a facility that’s already fully permitted. Then eventually, they’re going to try to move into places like New Mexico, where I think with the passage of time, common sense will prevail and people will become more pro-mining for uranium.
StockInterview: We now have about ten times the number of uranium companies, some purporting to be a “uranium company,” than when we first started covering this sector. How is this sector going to play out?
Kevin Bambrough: It’s been very difficult to try and follow what everyone is doing in this space. Right now, the uranium story is looking so good. It’s still relatively early that anyone seems to be able to raise some money, tell a story and perform well. It’s unbelievable how the sector has performed this year. With the passage of time, the guys with the real resources, who can also develop them and produce, are going to do well. The other guys are going to have to keep coming back to the market, raising capital, raising capital and diluting their shareholders in order to try to drill and find something. Of course, there is going to be the odd one here and there that actually strikes something big. It’ll give people hope but, that’s not the way we want to invest.
StockInterview: Have the uranium stocks gotten out of control? Are we looking like another train crash like the internet stocks of a few years ago?
Kevin Bambrough: The majority of stocks in the uranium space, we will not own. We only own a really select few, probably just over a dozen. We have some explorers, we have some producers and we have some, what we believe to be emerging producers and we’re sticking with that mix.
StockInterview: So which companies do you like?
Kevin Bambrough: Obviously, there is a lot of mud slinging that goes on in all sectors of the mining business. You talk to different people, and they say, “Oh this is going to be higher cost, that is going to be higher cost, and our properties are better than their properties.” From where I sit, Energy Metals (TSX: EMC) was one of the companies to get in there early, and pick up a lot of known resources and databases. I think they’ve done a great job of doing exactly what they said they were going to do. We started funding them in the early days. Those are the (types of) companies I want to stick with.