Bannerman Energy (ASX:BMN) share price leaps 22%, up 60% in a week. Here’s why

The uranium company’s share price has been going nuclear this week.

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The Bannerman Energy Ltd (ASX: BMN) share price has finished the day up more than 22% on yesterday’s closing price.

It’s pumped the uranium company’s shares more than 60% higher for the week.

Let’s take a look at what’s been fuelling the Bannerman share price.

Soaring uranium prices propel Bannerman share price

Bannerman has not released any price-sensitive news today, or within the past week, to explain the demand for its shares.

Instead, the euphoric price action can be traced to a single catalyst.

After being in a prolonged bear market, uranium spot prices have soared to 6 year highs.

Aggressive buying of the world’s largest uranium fund, Sprott Physical Uranium Trust (SPUT), has fuelled uranium stock prices.

Since mid-August, SPUT has acquired approximately 900,000 pounds in physical uranium.

As a result, shares in Bannerman have benefited from the strength of its underlying commodity.

The company recently addressed this momentum in a market presentation last week.

More on Bannerman

Bannerman Energy is an Australian and Namibian listed uranium development company.

The company’s flagship Etango Uranium Project is located in the Erongo Region of Namibia.

The last piece of price-sensitive news from Bannerman was in early August when the company released feasibility study results for its Entango-8 project.

According to the study, the site has strong technical and economic viability.

In addition, Bannerman highlighted that the reserve holds 117.6 million tonnes at 232 parts-per-million uranium, for 60.3 million pounds of uranium.

As a result, the company noted a post-tax net present value (NPV) of US$222 million at a potential US$65 per pound of uranium.

Snapshot of the Bannerman share price

The Bannerman share price has gone ballistic in 2021. Since the start of the year, shares in the mining explorer have soared more than 275%.

Shares in Bannerman closed the day at 38 cents, a gain of 22.58%.

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Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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