Barry FitzGerald: Two more ASX juniors for your uranium watchlist as Elon Musk goes nuclear

In terms of making investors hot and sweaty, the ASX uranium sector is right up there at the moment with lithium and ironically enough, coal and gas.

The latest push along for nuclear power came from Elon Musk, and the Japanese government going ahead with the restart of nuclear power plants left idled after the 2011 Fukushima incident, such are Japan’s concerns about the global energy crisis.

Japan’s pro-restart agenda is far more important than the latest thought bubble from Musk on the subject of nuclear power. The same goes for the passing of nuclear friendly legislation with attached funding in the US.

But there is no denying when he speaks, the world listens.

The Tesla boss told an energy conference in Norway that he is “pro-nuclear”.

“We should really keep going with the nuclear plants. I know this may be an unpopular view in some quarters. But I think if you have a well-designed nuclear power plant, you should not shut it down, especially right now,” Musk said.

Beforehand, Musk tweeted that countries should increase nuclear power generation and that “it is insane from a national security standpoint and bad for the environment to shut them down”.

There was a subsequent pile-on into North American uranium stocks as a result, with Japan’s restart plan helping.

More fuel to the fire was added during the week when the spot uranium price punched back through $US50/lb with a 6.5% rise to $US50.75/lb, as reported by Numerco. That’s 48% higher than a year ago.

As Stockhead readers know well, there are lots of good reasons to think uranium is set to go higher still.

As noted by Sprott Physical Uranium Trust (SPUT) — it owns 57Mlbs of uranium valued at $US2.77 billion — it has become increasingly clear that the zero emissions targets being set by governments around the world cannot be met without a reliable low or zero-carbon-based energy source such as nuclear power.

“For all the benefits of renewable energy sources like wind and solar, they face one major drawback – intermittency,” SPUT said in a market update titled: “Dawn of a new nuclear renaissance.”

“Wind does not continuously blow, nor does the sun always shine, which means that a consistent energy source is required to support renewables.”

Garimpeiro was on the same page a month ago when he mentioned that for an amped up response to the building excitement in the uranium sector, the way to go was to focus on quality explorers with high-grade targets.

If uranium exploration results are reported in parts per million rather than percentages per tonne (ie multiple pounds per tonne), Garimpeiro is looking the other way for the time being.

In his August 5 column, two juniors with high-grade exploration plays were mentioned – DeVex (ASX:DEV) and Alligator Energy (ASX:AGE).

Both have high-grade exploration plays in the Alligator Rivers Uranium Province (ARUP) region of the Northern Territory, which has been one of the world’s leading sources of high-grade uranium, most recently from ERA’s now mined-out Ranger mine.

DevEx was 34c back on August 5 and has since moved up to 42c for a 23.5% gain. Alligator has risen from 5.7c to 7.4c for a 30% gain. It has been impressive stuff against the broader market sell-off.

Both are getting active on the ground and will continue to be watched by Garimpeiro.

But such is the rising heat in the uranium sector, Garimpeiro adds another two juniors focussed on high-grade uranium to the watchlist – Valor (ASX:VAL, trading at 0.8c) and 92 Energy (ASX:92E, trading at 65c).

Both are active in Canada’s Athabasca Basin which is the equivalent of the ARUP but on steroids. Valor has just about completed all the things needed to be done to define drilling targets and will get cracking with the drill bit early next year.

92E has been attracting strong interest in response to its high-grade — and importantly shallow — Gemini discovery. Gemini is one of many high-grade targets in the Athabasca Basin the company brought to the market through its April 2021 IPO.

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