Are you looking to position yourself in the current uranium boom? If so, Rick Rule has some advice for you. Rule, a 50-year industry veteran and the founder of the world’s largest precious metal and natural resource venture capital firm, recently spoke to a Godzillanewz virtual event about potential investing opportunities in the uranium space.
Uranium has caught a lot of investor attention in recent months as demand for the energy source expands from countries like China and India. Rule noted that with uranium, “money has been made easy” and that now is a “great moment for the resource where it’s likely to attract a lot of attention from money managers.” He outlined a three-step approach to properly position yourself in the uranium space:
1. First, investors must decide whether they are “comfortable with the volatility” that uranium has historically seen. Although the asset can offer attractive returns, the risks of the energy source must be considered before investing.
2. Second, investors must decide which sector of uranium they are interested in – either the mining side or the uranium barter/brokerage side. Rule warned that the viability of individual miners is difficult to assess, so investors interested in the mining side should focus on major developers like Cameco and Kazatomprom.
3. Third, Rule urged investors to focus on the highest “margin of safety” projects, which offer the least risk. He noted that investors can identify potential operational risks by looking at things like the size of the deposit or the hit rate of drill programs.
Rule believes that uranium will be an attractive investment option in the coming years, and following his three-step approach can help investors properly position themselves in the space. As he noted to Godzillanewz, uranium is a resource “where an enormous amount of money can be made properly if you position yourself correctly.”
