Sprott buys 50,000 lb for $5B uranium trust

[Ben Graham]

The Sprott Physical Uranium Trust’s (TSX: U.U for USD; U.UN for CAD) holdings now total about 68.6 million lb. of uranium after it bought 50,000 lb. of the energy metal this week in another bet on the resurgence of nuclear energy.

That buy brings its total third quarter purchases to 1.2 million lb. of uranium oxide (U₃O₈), its highest level since last year’s second quarter, BMO Capital Markets analysts Helen Amos and George Heppel said in a note on Thursday. Its holdings amount to a market value of about $5.12 billion, according to Sprott.

The increasing holdings of the Toronto-based trust come as the spot uranium price continues to rise, gaining about 18% to $74.70 per lb. U₃O₈ from its slump of $63.45 per lb. U₃O₈ in March.

With uranium demand poised to rise, driven by reactor life extensions, new builds, and energy-hungry data centres, Sprott’s move underscores uranium’s growing role in the clean energy transition. Political instability in Niger threatens volumes from Orano’s SOMAIR mine while long lead times to bring new mines online mean uranium supply is seen as tightening in the longer term.

$200M June buy

And in June, the Physical Uranium Trust’s partner company Sprott Asset Management said it planned to buy $200.1 million worth of physical uranium for its dedicated fund. Canaccord Genuity would acquire 11.6 million units of the Sprott Physical Uranium Trust at a price of $17.25 per unit. The offering was expected to close around June 20.

The spot price increase has meanwhile, helped miners maintain steady output, with the world’s top producer Kazatomprom (LSE: KAP) posting a 13% year-on-year rise in production in Kazakhstan for the first half of 2025 to 12,242 tonnes, it said on Aug. 1.

Canadian uranium major Cameco (TSX: CCO; NYSE: CCJ) expects to produce 18 million lb. U₃O₈ this year from its mines in Saskatchewan, even though year-on-year output was down 28% in the first half, it said in its second quarter results in July.

Demand spurs production

These production trends occur as demand for nuclear energy continues to rise as tech companies prepare to build more power-hungry data centres for AI applications. The United States government is also working to accelerate nuclear’s rise through various supports and fast-tracking uranium projects in the country’s Southwest.

Worldwide demand for uranium is projected to triple by 2040, showing the urgent need to develop mines. Uranium demand already outstrips production by 50 million to 60 million lb. a year, according to World Nuclear Association data.

Sprott Uranium Trust shares were down 0.2% to $17.43 apiece on Thursday morning, for a market capitalization of $6.72 billion. The stock has traded in a 12-month range of $12.55 to $20.51.