Alternative Investments/ESG: Sprott’s To Reorganize UPC Into Physical Uranium Fund

Sprott’s already manages four commodity stockpiling funds, including gold and silver. Uranium will be its fifth physical fund.

Sprott’s has agreed with Uranium Participation Corp (TSE: U), a Toronto-based company focused on investing in physical uranium, to reorganize the latter into an investment-fund listed on the Toronto Stock Exchange. Subsequent to such reorganization, the fund will pursue a listing on the NYSE Arca exchange. (Mining Journal)

Uranium is essential fuel for generating nuclear power, a cleaner alternative to fossil fuels.

Sprott Physical Uranium Trust (SPUT) and climate targets

Sprott’s intends to create the Sprott Physical Uranium Trust (SPUT) through the reorganization of UPC which was the world’s first and largest listed vehicle for investing in physical uranium.

As at end-May 2021, UPC held 19.3 million pounds of U3O8 and other products with a net asset value of more than C$730 million.

“There is a growing narrative that nuclear power has to be part of the overall strategy to reduce greenhouse gas (GHG) emissions, while providing reliable baseload electricity to an increasingly electrified world,” said Sprott Asset Management CEO John Ciampaglia to Mining Journal. “We see more and more governments committing to climate targets and acknowledge that solar and renewable alone won’t help them meet those objectives.”

Ciampaglia also said that Sprott’s found the fundamentals of uranium finally looking up after a multi-year bear market.

SPUT and a US listing

Once listed on a US exchange, SPUT could see a huge jump in its investor base and access to large amounts of capital.

As a result SPUT could bring uranium out of a shadowy and opaque spot market and into the limelight with investors aware of the metal’s potential for appreciation in a climate-focused world that is hungry for renewable energy.

SPUT may therefore transform the uranium market into a more liquid, transparent and easily investable sector.

“We hope to enhance price discovery in the uranium market and this vehicle has the potential to act as a de-facto pricing reference for industry participants and investors,” said Ciampaglia.

Related Story:  Uranium on a Roll as Supplies Taper; ETFs Trend Higher

Image of Yellow Cake Uranium: Flickr                                                  

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