2023: Uranium Royalty Cash Burn Continues, But Valuation Turning Around

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URANIUM ($TSXV:URC): Cash flow from royalty payments has been steadily declining, causing cash burn to continue throughout the year. But despite the continuing outflow of cash, there is some good news – the valuation of uranium royalties is turning around. The uranium royalty sector has been hit hard in recent years due to the falling uranium prices, which have hampered the industry’s ability to generate revenue.

In addition, the long-term contracts that were signed in the past are coming to an end, resulting in decreased royalties for many producers. Despite these headwinds, the sector is showing signs of life as prices of uranium have increased over the last few months and long-term contracts are being renegotiated or extended. This renewed optimism in the uranium sector has helped to buoy the valuation of uranium royalties. The renewed interest in uranium has also attracted new investors to the sector, which has helped to support the rising valuations. Although cash burn due to royalties is still happening, it is expected to slow down in 2023 as more long-term contracts become available and uranium prices remain strong. As the industry continues to rebound, it is likely that investors will continue to see positive returns on their investments in uranium royalties. For now, the industry remains optimistic about what 2023 holds for uranium royalties.

Price History

The news on URANIUM ROYALTY has been mostly positive leading up to 2023. On Monday, URANIUM ROYALTY stock opened at CA$2.9 and closed at CA$3.0, up by 3.1% from the prior closing price of 2.9, evidence of a positive outlook for the company. This indicates a potential turnaround from its current cash burn, with an overall positive outlook for the company’s valuation in the near future. Live Quote…

About the Company

Income Snapshot

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Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Uranium Royalty. More…

Balance Sheet Snapshot

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Key Ratios Snapshot

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Analysis

At GoodWhale, we’ve recently performed an analysis of URANIUM ROYALTY‘s wellbeing. We have concluded based on our Risk Rating that URANIUM ROYALTY is a high risk investment in terms of both financial and business aspects. Our analysis has detected a number of risk warnings across the income sheet, balance sheet, cashflow statement, and financial journal. To get a better understanding of URANIUM ROYALTY’s financial standing, you can register on goodwhale.com and view the full report. You will be able to see the risks in more detail and make a more informed decision about whether or not to invest in URANIUM ROYALTY. More…

Peers

The Company’s primary activity is the acquisition, exploration and development of uranium properties in Canada’s Athabasca Basin. Uranium Royalty Corp’s competitors include Washington H Soul Pattinson & Co Ltd, Yellow Cake PLC, Sprott Physical Uranium Trust.

– Washington H Soul Pattinson & Co Ltd ($ASX:SOL)

Washington H Soul Pattinson & Co Ltd is an Australian conglomerate with interests in a wide range of industries, including banking, insurance, coal mining, retail, and wine. The company has a market capitalization of 10.4 billion as of 2022 and a return on equity of 9.94%. The company was founded in 1873 and is headquartered in Sydney, Australia.

– Yellow Cake PLC ($LSE:YCA)

Yellow Cake PLC is a holding company that engages in the production and sale of uranium. The company operates through the following segments: Australia, Canada, Kazakhstan, and United States. It was founded on December 15, 2004 and has its headquarters in London, the United Kingdom.

– Sprott Physical Uranium Trust ($OTCPK:SRUUF)

Sprott Physical Uranium Trust is a Canadian closed-end investment trust that provides investors with exposure to the physical uranium market through the ownership of uranium oxide in concentrates (U3O8) stored in a secure, third-party facility. The Trust is managed by Sprott Asset Management LP, a wholly-owned subsidiary of Sprott Inc.

The Trust’s market capitalization is $2.85 billion as of March 2022, and its return on equity is -0.88%.

Sprott Physical Uranium Trust is a Canadian closed-end investment trust that provides investors with exposure to the physical uranium market through the ownership of uranium oxide in concentrates (U3O8) stored in a secure, third-party facility. The Trust is managed by Sprott Asset Management LP, a wholly-owned subsidiary of Sprott Inc.

The Trust’s market capitalization is $2.85 billion as of March 2022, and its return on equity is -0.88%. The Trust’s primary objective is to achieve a long-term total return for its investors through an appreciation in the value of uranium oxide in concentrates, as well as through regular cash distributions.

Summary

Investors in the uranium royalty sector have seen their cash burn rates continue at a steady pace, largely due to the heavy investments needed to keep operations running and the rising cost of goods. Despite these headwinds, the sector has seen some positive news recently, leading to improved sentiment and a resurgence in stock prices. Analysts believe that this renewed optimism is based on the potential for future growth and stability, with larger companies in the space continuing to look for further acquisitions and joint ventures. As such, this could provide a good opportunity for investors to get in on the ground floor with a more appealing risk-reward profile than many other sectors.