Despite having "royalty" in its name, only one of Uranium Royalty's assets generates royalty revenue.
The main sources of income for the company are the sale of assets and the sale of its own shares, which leads to constant dilution of shareholders.
In our opinion, the value of the company's assets is 30% lower than the current market capitalization. The value of many royalties may be close to zero.
I own shares and I am waiting the next 10 years for peak uranium prices. please comment on my statement, the article and if is there a silver lining in this company such as the management team.
Thank you
Its portfolio includes interests on 18 development, advanced, permitted and producing uranium projects in multiple jurisdictions, including royalties on the world class McArthur River and Cigar Lake mines. It is a $292M company with negative free cash flow and it does issue shares to fund its operations. Although, the company generated $13.9M in revenues in FY2023, and its share price will move closely with the price of uranium. The company recently acquired a portfolio of royalties on US projects and purchased physical uranium. Given this, we feel that the company has exposure to royalty revenue, and its holdings of physical uranium will enable part of its market cap to reflect the price of uranium. It is negative free cash flow and issues shares to fund growth, but this is typical for this type of company.
We feel that if an investor has a positive outlook on the price of uranium, we feel this name can provide an investor with a good level of exposure.