Sprott to buy $200M of uranium for special fund

[Redator]

Asset manager Sprott (TSX, NYSE: SII) said it plans to buy about $200.1 million worth of physical uranium for its dedicated fund after raising twice as much money as planned via a bought deal.

Canaccord Genuity is to acquire 11.6 million units of the Sprott Physical Uranium Trust at a price of $17.25 per unit, double what had been announced hours earlier, Toronto-based Sprott said Monday morning in a statement. Strong investor demand led to the size of the deal being increased, Sprott said. The offering is expected to close on or about June 20.

News of the investment comes after spot uranium prices rose about 5.5% in May – their second significant gain in as many months – on renewed investor confidence in the industry amid clear signs of a coordinated US government push toward nuclear energy. Uranium term prices held steady at about $80 per lb. last month.

As tech companies race to build additional data centres, global demand for uranium is projected to triple by 2040, underscoring 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.

Main beneficiaries

Nuclear energy has emerged as one of the main beneficiaries of the so-called “One Big Beautiful Bill,” a broad legislative package that aims to reshape US energy and tax policy. While the bill still faces hurdles in the Senate and isn’t yet law, “its passage signals a clear legislative intent to pare back broad-based clean energy subsidies while broadening support for nuclear energy as the backbone of American electricity,” Sprott EFT product manager Jacob White wrote in a report published last week.

Recent executive orders from US President Donald Trump provide additional tailwinds. They aim to bolster key areas such as uranium mining, fuel production, reactor deployment and global exports.

“These directives represent the most ambitious nuclear policy framework in decades, with implications for national security, AI infrastructure, energy independence and industrial revitalization,” White wrote.

Hooked on imports

US nuclear power producers overwhelmingly depend on imports. About 99% of the uranium used by US nuclear power plants in 2023 came from countries such as Canada, Russia, Kazakhstan and Uzbekistan.

In late May, the United States Department of the Interior approved Anfield Energy’s (TSXV: AEC; US-OTC: ANLDF) Velvet-Wood uranium and vanadium mine in Utah – the first project to be greenlit under a compressed 14-day environmental review timeline.

Units of the Sprott Physical Uranium Trust jumped 4% to $17.66 in Toronto Monday morning. Sprott shares added 0.8% to $86.74, giving the company a market capitalization of about $2.2 billion.