Why Uranium Energy Stock Zoomed This Week
Uranium prices fell to their lowest in five months this week, but shares of Uranium Energy (NYSEMKT: UEC) were flying 14.6% higher through 10 a.m. ET Friday, according to data provided by S&P Global Market Intelligence. The young uranium miner released its earnings this week, but the real catalyst for the uranium mining stock was a contract to supply uranium in the first quarter of 2023.
The U.S. generates almost 20% of its electricity from nuclear energy but imports most of the uranium it uses as a fuel in nuclear reactors. Russia's invasion of Ukraine and surging commodity prices in 2022, however, compelled the U.S. Department of Energy (DOE) to make plans to revive the domestic uranium industry. Part of the plan included the establishment of a strategic uranium reserve, and in July, the DOE sought proposals to purchase 1 million pounds of domestically produced uranium.
The DOE started awarding contracts in December, and Uranium Energy is among the few companies that bagged one -- it won a $17.85 million award on Dec. 20 to supply the DOE with 300,000 pounds of uranium concentrates at a price of $59.50 per pound. The uranium will be supplied in early 2023.
Source Fool.com
