Uranium – The Worst Bear Market Ever?


Last year, I thought that the bear market in precious metals was just about as bad as any that I have ever seen in my life. As I have often emphasized in the past, being able to buy up assets for pennies on the dollar should make any investor feel like a kid in the candy store. For certain, in September 2015, I was having the time of my life scooping up assets during a period in which almost nobody else cared…

Fast forward to 2016, and everything that went on during the Depths of Despair is now all but a distant memory.

The brutal bear market in precious metals ended earlier this year… And we are now off to the races again…

And for the most part, many other commodities (lead, zinc, lithium, etc.) have also started to rebound this year…

But when it comes to uranium, man, have you ever seen an asset more hated by the markets (and investors)?!?

I sure haven’t…


The current spot price of uranium is just $25.94/lb

Many of the majors (and the lowest cost producers) can’t make money selling at today’s prices!

From Ur-Energy.


Yes, we all know that the “cure for low prices is low prices“… But as is often the case, “the markets can stay irrational longer than you can stay solvent.

For the most part, any investor who was bold enough to try and venture into the uranium space these last few years has been punished mercilessly by the markets…

Right now, as things currently stand, there is simply enough supply to meet demand… Sure, there might be lots of growth in store for the future (new reactors + Japan re-starts), but until new utility contracts are signed and the spot price starts moving rapidly in the upward direction, most everyone is just not going to care at all about the uranium story…

From Uranium Energy Corp.



Wake me up when the stocks start flying?

They have… in the downward direction.

Just last week, Energy Fuels (UUUU) shocked the markets (and investors) by announcing a $10 million bought deal offering.


It wasn’t so much surprising that the company needed to raise funds (yet again), but the terms of the offering…

$1.80/share (essentially at 52-week lows!)

1/2 warrants good for 5 years (oh my!) at an exercise price of $2.45/share




It’s opportunities like the above that make me wish I was an accredited investor who was qualified to participate in private placements (next cycle, for sure!).


Anyway, for anyone who has been following the gold and silver space at all this year, you’ll know that offering warrants (even just 1/2 warrants) is no doubt a “cardinal sin” these days… Why do so when it’s so freekin’ easy to raise capital?

Don’t you just love bull markets? Capital is just so readily available…

But less we forget, not all commodities are on the mend this year… The Energy Fuels financing was kind of a wake-up call for me and a reminder that for some materials, like uranium, the agonizing pain of having to endure a prolonged bear market is still alive and well…

Seriously, you would have to believe that no management team is insane (or stupid) enough to do a deal at 52-week lows (AND offer 5-year warrants!) unless the circumstances were indeed that bad… and dire.

The terms of the offering are just way too generous for anyone to issue in a “normal” market environment… Without putting things in the proper context — What a slap in the face to your existing shareholders, it must feel like!

Not surprisingly, then, shares of UUUU tanked the following trading session proceeding the announcement, finishing the day down over -25%!

Shares of Energy Fuels are now trading at NEW 52-week lows!


I think it’s safe to say that existing investors were pretty pissed off with news of the latest offering… to say the least.

But for newcomers to the game?

Not so much…

In fact, the offering was increased to $13.050 million, due to increased demand.


Again, for anyone “late to the party”, that’s a pretty sweet deal… You’re getting shares at basically record lows and 5 year warrants to boot!

But damn, can you imagine all the backlash and “hate mail” that management must be receiving with their precipitously declining share price? The headquarters of Energy Fuels must not be so fun a place to be working at these days…

Anywho, I bring all this to your attention because as everyone who reads this blog knows, I’m a huge fan of brutal bear markets… Point blank, that’s just my absolute most favorite time to buy!

When nobody else gives a shit, I start tuning in with most interest…

No, I really can’t see the uranium market turning around anytime soon… But anytime you have a sector in deep liquidation, and with shares of a company selling off by over -25%… due to a financing event, I mean, you gotta start paying attention!

The reality is, in any bear market, basically anything management does is the “wrong” thing to do… But you know what? Once the sector finally turns (and you better believe that the sector will eventually recover because ain’t no uranium company making money selling goods at today’s prices), all this “doom and gloom” is very quickly forgotten…

It’s human nature to nitpick, scrutinize, critique, and make a whole lotta noise about every little last detail, until the macro story changes… and then all that stuff ends up not really mattering anymore… It’s so funny, because I so vividly remember what it was like investing in precious metals stocks last year, and everytime a junior had to raise capital, you had investors up in arms with rage about how these management teams were “a bunch of clowns/idiots” and doing such a HUGE disservice to their shareholders by diluting them into oblivion… Fast forward to now, and with Happy Days having returned to the precious metals sector, all those previous complaints have been transformed into cheers of joy… When investors are making money, management can almost do no wrong, and these same “clowns/idiots” have transformed into badass “rockstars”…

Go figure…


  • Bull market vs. bear market.
  • Making money vs. losing money.
  • Fear vs. greed.


It’s all extremely fascinating stuff…


I’m not saying now is the time to jump into uranium, but as you all know, if you want to make some serious coin in the mining space, you do so by buying at the Depths of Despair.

I’m not about to call no bottom in uranium (we could still have ways to go for all I know, and I have absolutely no clue), but no doubt, we are way closer to hitting rock bottom than we are at encroaching any kind of market top!

So yes, of course I am paying attention and watching uranium (and the mining stocks) with great interest.

Without question, at some point, the uranium sector will turn up again, Happy Days will re-emerge, and the investors daring enough to play ball when nobody else was willing to will make a huge fortune.

Uranium, you are no doubt the worst and most brutal bear market that I have ever observed in my entire investing career…


Fight On!

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Income Surfer
4 years ago

Thanks for the post Jay. Uranium is one of the most interesting spaces and plays for me, because it applies to my deep value leanings. I’ve been watching the space for almost a year, but I haven’t seen the catalysts I need to make a move. Either demand has to grow substantially or supply needs to shrink. I know both are taking place, but at very slow rates

I think our group needs to keep spending time discussing this space. It will turn, and we need to be ready to pounce when it does! will talk soon

Rudy SMT
4 years ago

Hi Jay,

Thanks for sharing this article.

You might find interesting this company, it’s producing uranium at US$15.60 per pound.


4 years ago

Hey, Thanks for the great blog! I´ve read your post about Global X Lithium ETF (https://www.fifighter.com/lithium/2016/05/the-global-x-lithium-etf-lit-why-i-dont-like-it/). I like the lithium play more than the Uranium (because its more understandable for me) but the ETF is not what it should be. Is the Uranium Global X Funds ETF (URA) a better product than the Lithium sibling? I´ve always been a passive index guy but now I´m looking opportunities to achieve financial independence sooner. Do you have some Uranium ideas that are better than the URA ETF? I missed the gold/silver train but I would like to find the next train before… Read more »

4 years ago

I have some concerns with the Uranium-Bull-Market:
1) Most of new reactors are either built in China & Russia or by Chinese & Russian Companies – I suspect that the fuel will be supplied from Russian & Chinese sources and not by western uranium miners…
2) What happens with the Uranium demand until/after 2020 if China and Russia start closing the nuclear fuel cycle? Then there might be no extra demand to eat the current over-supply.

4 years ago
Reply to  FI Fighter

Good points here. Also – Uranium provides for a large percentage of baseload power in North America. It’s either that or the lights go out. Option 2 won’t be allowed politically, so lights on and contracts renegotiated at some point.

4 years ago

Hi Jay,

What sort of valuations, or catalysts are you looking for prior to jumping into the sector? With Energy Fuels at a $96M market cap, that just seems absurdly cheap to me given their ISR, conventional, and milling assets.

4 years ago
Reply to  FI Fighter

From $200 to $2.50ish…. quite the drop! 😀 and vice versa. I’d say the safest play is probably “U” ticker. Thoughts? Some names sticking out…


Also BRI – they have that u308 component mixed in.. mostly gold play though. But your portfolio is way above mine… so what do I know right? lol

4 years ago

Great post FI. While U spot prices have been falling the stock prices of some U producers have stabilized (the exception for now being Energy Fuels). That suggests investors are starting to taking up positions in the U space. The big question is how long will the ample stockpiles of U take to work through. Last quarter Cameco, the largest U producer, had one buyer reneg on a long term contract. It remains to be seen if this is the start of a new trend that will extend the bear market for U. However, when the prices of U stocks… Read more »

4 years ago

Hey Jay, First off, I have read your blog for a while now and really, really like it! Lots of food for thought. But I have to disagree about your thinking about uranium: I don’t like it. Fundamentally, nuclear power has had its peak, it is a dying industry (and, besides, I have massive ethical objections). Uranium prices and miners may indeed recover for some time, though. After all, the existing power plants will still need fuel for a few decades. Building a new npp, that is (presumably) safe is prohibitively expensive. Nuclear powerplants are therefore economically no longer competetive,… Read more »


[…] (and uranium stocks) are deeply entrenched in a most brutal bear market. As I mentioned in a previous article, this downturn in uranium quite possibly could be the worst storm that I have ever witnessed so far […]


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