Part II – Navigating the Tricks of Uranium Investing

As you know, I tend to have a more bargain-hunting and out-of-favour bent when it comes to looking for opportunities in the resource market.

Stocks or commodities that have lost their shine, yet still positioned to benefit from the ongoing upswing in the broader commodity cycle.

And unlike the beginning of the year, when the entire periodic table of elements was surging, there’s now a vast pool of unloved commodity stocks out there to snap up at a discount.

And as I keep telling readers, that’s the time to accumulate while we remain in a broad multi-year commodity uplift.

We’ll cover several of them over the coming weeks.

But in today’s edition, we’ll unpack Part II of a looming opportunity in the uranium market…

In my last edition, I said that the term price matters a lot more than the spot price in the uranium market.

And for many years, the spot price has sat well above the ‘term price.’ Hinting that utility buyers were never as concerned about future supply as the speculators who tended to spruik the uranium trade.

Yet, that trend recently flipped, and today we’re going to try to answer why that might be happening.

Speculators out. Insiders in.

One key aspect might be that the key buyers in this market are concerned about future supply.

To show you what I mean… Across all the commodities, gold is one of the easiest to mine, process and deliver to market.

At the other end of the spectrum are certain critical minerals, such as rare earths and graphite. Mining, processing, and delivering to market is capex-intensive, incredibly complex and vulnerable to failure.

It’s why mining for the majority of the world’s rare earth supply has essentially been a state-sponsored venture, with the Chinese government supporting this critical industry.

And it’s also why the West has had so much difficulty establishing its own rare-earth production. It’s lost that technical edge.

So how does that relate to uranium?

Well, this is precisely how you should view uranium mining. It sits at a similar level (alongside rare earths) in terms of mining and processing complexity and expense.

If you have any doubt about that, take a look at the wreckage of companies that have tried (and failed) in making this venture work…

The ASX graveyard of 
wannabe uranium miners

Paladin Energy (ASX: PDN) restarted its Langer Heinrich mine in 2024 after a decade on care and maintenance. The stock ran hard into the restart, peaking above $18 in 2024.

By 2025, the share price had been decimated, down 60% from its peak, due to a series of water supply issues and other production problems.

A similar pattern played out for Boss Energy (ASX: BOE). After successfully entering production, its shares tumbled a similar amount from their peak, crashing as much as 28% in a single session in December 2025 after the Honeymoon project review.

And yet again, it was the pitfalls of attempting the complex task of extracting and processing uranium that led to the company’s demise.

The wreckage continues…

Another Aussie example, Lotus Resources (ASX: LOT) restarted its Kayelekera mine in Malawi in August 2025.

The stock tumbled as much as 70% from its pre-production peak following ramp-up setbacks and production revisions at its Kayelekera deposit.

And yet grade variability, processing issues, cost overruns, and supply issues for critical inputs such as sulphuric acid have undermined uranium miners’ ability to make this business work.

Bottom line: Uranium mining is highly complex. As an investor, I’ve said several times that this is probably the most difficult commodity to tackle; that’s why we’ve only dabbled in small amounts over the years.

Holding a maximum of one uranium stock in our portfolio for readers.

Yet these ASX examples do show you that a potential supply bottleneck could be forming; bringing a new mine into production is a low-probability bet with an extremely high failure rate.

Nonetheless, it’s worth watching

But in terms of picking a uranium miner, it’s very much buyer beware!

I don’t often recommend commodity ETFs, given that the upside diminishes substantially compared to direct company exposure, but in this case, it may be worth making an exception…

Something like the Global Uranium ETF [ASX: URNM] could offer a solid entry point given this year’s sell-off.

An ETF like this is one way to gain exposure to a possible uranium recovery while mitigating the extreme operational risks associated with this commodity.

Until next time.