This ASX uranium share picked as a future top 10 global contender

An expert is very optimistic about this uranium stock.

| More on:
The silhouettes of ten people holding hands with their arms raised against the sky, as the sun rises or sets in the background.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The ASX uranium share Nexgen Energy (ASX: NXG) could have a very exciting future, according to a fund manager.

Investment managers were asked to pick out their favourite investment ideas for the year ahead at the annual Sohn Hearts & Minds conference in Sydney recently.

Fund manager Jeremy Bond at Terra Capital told the conference that Nextgen Energy could become "one of the world's top 10 mining stocks", according to the Australian Financial Review.

What is Nexgen aiming to do?

Nexgen describes itself as a British Columbia corporation focused on developing into production the 100%-owned Rook I Project, located in Saskatchewan.

The company says it has a highly experienced team of uranium industry professionals with a successful track record in discovering uranium deposits and developing projects from discovery to production.

The Rook I project is the location of the company's Arrow deposit discovery of February 2014. It has measured and indicated mineral resources totalling 3.75 million tonnes, grading 3.10% U3O8 containing 257 million pounds U3O8.

The company also owns 49.7% of the outstanding shares of IsoEnergy.

In terms of progress, Nexgen recently advised that, in the third quarter of 2023, it further advanced the front-end engineering and design for the Rook I project. The company also continued to progress the project through the critical path of detailed engineering and procurement phases.

Why uranium?

The long-term global effort toward decarbonisation to reduce reliance on energy sources like coal, gas and petroleum could be helpful for the ASX uranium share.

Nexgen points out that climate change, energy security and energy affordability are fundamental demand factors, leading to a "significant increase in demand and new investments in nuclear energy".

According to Nexgen, an approximate 16% increase in nuclear plant capacity is projected this decade, with a double of nuclear capacity expected by 2050.

The ASX uranium share said there was "underinvestment in exploration and mine development" from 2014 to 2020, while strategic reserves and mines have been depleted.

Uranium producers are fully contracted for at least four years, limiting access to supply. Nexgen points to analysis that shows uranium supply will need to triple by 2050 to meet the growing demand.

As Microsoft co-founder Bill Gates once said:

Nuclear is ideal for dealing with climate change, because it is already the only carbon-free, scalable energy source that's available 24 hours a day.

Specifically on Nexgen's place in this story, the company says it has the largest single-source deposit of high-grade, low-cost uranium in the world.

The ASX uranium share said:

The world is embracing nuclear energy as the linchpin to a carbon-free future. At the same time, geopolitical tensions are increasing pressure on the limited uranium supply necessary to make this future a reality.

The Rook I Project is essential to meeting the growing demand for uranium and delivering clean and secure energy solutions.

Nexgen share price snapshot

Since the start of 2023, the Nexgen share price has lifted by more than 50%, as we can see on the chart below.

Motley Fool contributor Tristan Harrison 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 Scott Phillips.

More on Energy Shares

Accountant woman counting an Australian money and using calculator for calculating dividend yield.
Energy Shares

Is the 11.3% dividend yield on Woodside shares for real?

Are investors really in line for an 11.3% yield from this oil stock?

Read more »

a close up of a man with wide open eyes and wide open mouth holding his head and reacting in shock and surprise to some share market ews.
Energy Shares

Why is the Strike Energy share price crashing 31% today?

This energy stock has lost half of its value in a month.

Read more »

A smiling woman with a cute dog flings her arm out of the window of a car
Dividend Investing

On the hunt for passive income? Here's what you need to know about the record Ampol dividend

Following today’s record declaration, Ampol shares trade on a juicy 7.2% dividend yield.

Read more »

a man sits on a rocket propelled office chair and flies high above a city
Earnings Results

ASX 200 energy stock Ampol charging higher on record 2023 sales

ASX 200 investors are bidding up the Ampol share price on Monday.

Read more »

two workers in hard hats and high visibility gear give celebratory fist pumps while checking paperwork at a processing site with equipment in the background.
Energy Shares

2 'low risk plays' amid surging ASX uranium shares

Fund manager Monash Investors recommends two particular ASX uranium stocks.

Read more »

an oil refinery worker checks her laptop computer in front of a backdrop of oil refinery infrastructure. The woman has a serious look on her face.
Energy Shares

Woodside share price dips to two-month low upon late news announcement

The oil and gas giant has revealed a major impairment cost for FY23.

Read more »

Coal Miner in the tunnels pushing a cart with tools
Earnings Results

Whitehaven share price crumbles on plunging half-year revenue

ASX 200 investors are bidding down the Whitehaven share price on Thursday.

Read more »

Happy man standing in front of an oil rig.
Energy Shares

How are Woodside shares avoiding the market selloff today?

This energy giant's shares aren't sinking like the market today. But why?

Read more »