Title: Scott Melbye: Bullish on Uranium, Rally to Come in Prices, Stocks
Show: Investing News Network (host Charlotte McLeod, investingnews.com) — recorded on the floor of the Rule Symposium
Guest: Scott Melbye — Executive Vice President, Uranium Energy Corp (NYSE American: UEC); CEO, Uranium Royalty Corp (Nasdaq: UROY / TSX: URC); President, Uranium Producers of America. 43 years in the uranium industry (ex-Cameco, ex-Uranium One).
Date: 2026-07-16 (published)
URL: https://youtu.be/k34PdxOaKzQ
Length: 23:12
Note: YouTube auto-captions. Fillers (um/uh/"you know"/"I mean" when contentless/stutters/false starts) removed; wording otherwise verbatim — no paraphrase, no reordering, no added words. VERIFIED auto-caption garbles were NORMALIZED IN THE BODY and are listed here: "Charlotte McCloud" = Charlotte McLeod (host); "Scott Melby" = Scott Melbye; "Bur McColo" / "Burke Hollow" = Burke Hollow (UEC's south-Texas ISR mine); "Ura- Rio Tinto" = Rio Tinto (seller of the Sweetwater plant to UEC); "Fast 41" = FAST-41 (US federal permitting fast-track); "sandstone hosted our bodies" = sandstone-hosted ore bodies. LEFT AS SPOKEN because already correct: "Irigaray" / "Christensen Ranch" (UEC's Wyoming ISR central plant and satellite); "Ludeman" (Powder River Basin satellite); "Roughrider" (Saskatchewan); "AP1000s" (Westinghouse reactor); "trona" (soda ash). CONFLICT NOTE: Melbye is an operating executive of both companies he recommends (UEC, UROY) — every stance here is management talking its own book.

(00:14) I'm Charlotte McLeod with investingnews.com and here today with me is Scott Melbye. He is executive vice president at Uranium Energy, CEO of Uranium Royalty, and president of Uranium Producers of America. Thank you so much for being here. Great to have you once again. >> Charlotte, it's always great to connect with you. These are exciting times.
(00:33) So, a lot to talk about today. >> Yes, we have a lot to go into and I think we're catching up on our last conversation a year ago at this same event. So, I wonder if you can begin by briefly catching me up on where we are in the cycle right now. >> Yeah, it's been, again, I come at this from someone who's been in the uranium industry now 43 years.
(00:55) And I look at the combination of, first the green energy transition that was so positive towards nuclear power growth and acceptance from both sides of the political aisle. But now just the need for energy, not just in the emerging markets, but the developed world electrified high-tech society, data centers, everything else all calling for more electrical energy.
(01:18) All these things incredibly positive and then of course the geopolitics and just market fundamentals have never been better. But we're in a position now where even without data centers and the hyperscalers nuclear power is doubling in generating capacity in the next 20 years.
(01:36) With data centers and hyperscalers, we very easily get to the tripling which is a common sort of goal that the industry has set out. And of course President Trump in the United States wants to quadruple nuclear power over this period. So, that means we need to double, triple, or quadruple uranium conversion and enrichment.
(01:55) Which is what my two companies and my industry organization are actively trying to provide that uranium that fills this growing gap. >> Well, we've got a lot to cover today. Most of it sounding very very positive. I want to start by talking about the price because I've heard I think one of the main themes I've been hearing recently when it comes to uranium if we've got the term price rising, spot price lagging behind.
(02:20) Is that still something you're seeing and what does it tell us about the market? >> Yeah, it's interesting. We've been stuck in a very narrow trading range for the last two three months at around $85 per pound in the spot market. That's not a bad level. That's not a level that incentivizes a lot of new production, but it has incentivized the lower cost production like UEC's mines have moved forward on that basis.
(02:46) Some have said, "Well, why isn't it moving higher?" And I go, "Well, the other way to look at it is it hasn't moved lower. No one's talking about $60 or $70 a pound anymore. It feels like there's really strong support anytime it should fall below 85 towards 84 83. Utilities are stepping in and buying. And this is really the crux of it is where is the price going? I think this shortfall in the uranium market, we have a 50 million pound structural deficit, 2 billion over 20 years.
(03:17) It's going to manifest in the long-term market first. And what I mean by that is utilities are now coming out to contract for uranium. And they're not getting an abundance of offers or the quality of the offers isn't what they expect. That's because producers are filling up their uncommitted capacity and it means that if utilities don't want to bite the bullet and contract on those terms, they're going to have to go into the spot market.
(03:42) And the spot market can't handle that volume. So, we're very soon in a position where the spot and long-term price spiral up on each other. And I know it's been frustrating cuz it hasn't happened yet, but I think as you come out of the summer period which might be quieter typically historically into the uranium meetings like the World Nuclear Association in London.
(04:06) I would be very surprised if we didn't close the year up above $100 a pound in the spot market. We're already there in the long-term market $95 to $100 is what we're seeing in base price escalated contracts in the market already. >> Well, that would definitely be an exciting way to end the year and definitely going in a direction I wanted to talk about which is the utilities.
(04:28) So maybe we hear a little bit more about them because for a while it seemed like they were pretty reluctant to come make these deals higher prices. Now it sounds like they're starting to accept that that has to happen. >> Yeah, it is. The market power in any commodity shifts. We've been in such an oversupply situation for so long that the utilities basically could demand and get pretty much anything they wanted. As supply tightens, the power is kind of shifting to the producers. We're seeing it at Uranium Energy Corp where we are very famously unhedged and indexed to spot pricing.
(05:10) That's our business model. When it came to long-term contracting utilities were reluctant to give us 100% spot market pricing when other producers were offering ceiling prices. We never wanted to do it. We work for the investor not the utility and now we're seeing utilities going, "Hey, remember those no ceiling 100% spot contract you were discussing a year ago.
(05:36) Is that still on the table?" So it really indicates that the utilities are seeing a tightening of the market and it's a normal progression that you would have in any commodity. As much as the utilities may not want to see higher prices, but that's what's going to be needed to get more mines into production, not just in the United States and Canada, but globally.
(05:54) So, ultimately, it's a healthy thing for the market. Utilities may not want to pay more, but it's actually going to be good for them in the long run. >> I do remember Uranium Energy didn't want to be locking into these potentially unfavorable contracts. Now that it is becoming more of a seller's market, would you consider that or is it still not on the table? >> We've enjoyed the flexibility to sell when we want to sell.
(06:20) The quarter previous to the last reporting quarter, we were able to sell uranium at over $100 a pound because we're very opportunistic. We decided not to make sales last quarter, but we can always re-evaluate that. And we are getting more traction now from utilities on long-term contracts that fit our unhedged category.
(06:46) Would we ever lock into hedged prices? Maybe if we saw the long-term trend towards production, the gap was closing, we might do that, but we're so far from that right now. We're happy to be 100% indexed and our shareholders love it. >> Well, and I believe the company has right now a stockpile of close to 1.
(07:06) 5 million pounds. Can you talk about the strategy for that material? >> Yeah, both of my companies, Uranium Royalty and Uranium Energy, purchased off the bottom of the market close to 10 million pounds of uranium at 20, 30, 40, 50 dollars a pound. It was a hugely successful strategy not only to manage our cash rather than just having cash parked in CDs, it's cash parked in a commodity which meets the mandate of both companies.
(07:37) But, it also provides in Uranium Royalty's case, the 2.4 million pounds that we're able to liquidate to do the current Sweetwater acquisition that we've engaged in. For UEC, it means we have flexibility to deliver into uranium sales using both inventory pounds and produced pounds. For example, we may want to preserve our US origin production for potential strategic uranium reserve purchases by the US government.
(08:07) Well, we can make a sale to a utility or a financial player or another producer that isn't as finicky about the origin and preserve our US origin that potentially could sell for premium to the US government going forward. >> Right. Right. So, we've got the stockpile and we know that UEC is producing and bringing assets online right now, which we'll talk about.
(08:30) I do want to ask though, these price levels, it's working for you, but more broadly, is this high enough to incentivize new supply in general? >> It's getting there, but it's not. I think for a new greenfield mine that might have very significant capital, particularly conventional mines or large conventional mills, the capital lift could be a billion or two billion dollars.
(08:55) And so, it's getting there, but it's to date it's only incentivized the lowest first or second quartile cost producers. Probably need 100-plus dollars a pound to incentivize the rest. So, again, we're getting there, but we have a huge gap. Goldman Sachs pegs this structural deficit at 2.1 billion pounds over 20 years.
(09:19) That's a lot of new mines are needed in Africa, Australia, US, Canada, and we're only beginning to see that momentum. So, I think it points to long-term structural deficit, higher prices for an extended period, but which for uranium investors is really strong support to the narrative. >> Yeah.
(09:41) Yeah, that's an absolutely massive number. Let's talk a little bit about what the company is doing right now. So, UEC began production at the Burke Hollow mine back in April. >> Yeah. >> I know that when new assets come into production, those first initial months can be the tricky time. So, how's that going so far? >> Yeah, a lot of new mine production and restart of mines in recent years have been choppy.
(10:06) And so, a lot of people are watching our ramp up to see how it's going. And we did disappoint in terms of production in the last quarter, but it was very easily explainable as what we declared two quarters ago is that the Wyoming Department of Environmental Quality and Texas equivalent were literally being overwhelmed by so much uranium activity in the state that it's taking them longer to do just routine sign-offs on new well fields, new header houses.
(10:38) So, we lost two and a half months out of a 3-month quarter. And so, the pounds we produced, 34,000 lb, wasn't much. And that surprised people, but the good news is that's not a technical issue or one that's ongoing. Those well fields have now been approved and are in full production.
(10:58) And so, each quarter we're going to be ramping up and seeing improvements in not only just production, but all-in cost even with that low production in the last quarter, we're still maintaining production to date from the Irigaray Christensen Ranch operations at under $40 all-in cost, which is really great.
(11:22) >> And Christensen Ranch, I believe you received approval to increase production there. So, how is that going as well? >> Yeah, I wish you could come out and see the activity. Uranium mining by in situ methods is very much like oil and gas production where you're drilling into sandstone hosted ore bodies and you're injecting sodium bicarbonate and you're pumping uranium to the surface as a solution.
(11:48) But when you're producing from current well fields, you're always continually drilling, completing header houses in well fields to stay ahead of your depletion curve. And so what you see out there are — we've got three additional well fields approved and two more in the application process and even a couple more under development.
(12:12) So at Christensen Ranch, it's a beehive of activity. We're also bringing on a new satellite to Irigaray in the Powder River Basin called Ludeman. That's the deposit which kind of is extension of Cameco's Smith Ranch deposit and operations. That we hope to have completed and bring into production late next year.
(12:35) And so we'll be feeding Irigaray from both Christensen and Ludeman in addition to the ramp up that's already occurring at Burke Hollow. >> And just so we've got a number in our heads, what is the amount of production you're targeting this year? >> Well, all of these operations, the interim stages are to get up to — Irigaray Christensen Ranch previously produced at a million pound rate under the Uranium One days.
(13:01) So obviously we're ramping up to the 1 to 2 million pound range. We haven't guided near-term production because of the uncertainty of regulatory and anything else, but I can tell you that we're spending, hiring, and planning to be at roughly 5 million pounds of production within 5 years. We have license capacity to go to 12.
(13:23) And if we see continued strengthening in policy in the US and also market conditions, expect that we would increase over that with increased workforce, drilling, everything else. But today we're kind of spending to get to that 5 to 6 million pound rate within 5 years. >> Yeah, I think that helps give a good idea of the picture.
(13:47) So, got the producing assets. I know there's other work going on at different assets in the exploration stage. What would you pull out as highlights there? There's a lot going on. >> Yeah, so the fourth area of focus is Sweetwater. The Sweetwater assets that we acquired at UEC from Rio Tinto.
(14:09) That's in the Great Divide Basin. It's a conventional mill that's licensed to 4 million pounds a year. We've applied in this Trump administration and been accepted into the FAST-41 program, which is a fast-tracking of permitting of critical minerals under Executive Order from President Trump. There we're amending the license to modify the mill to accept in situ resins in addition to conventional ores because we have such a great number of resources and projects in the Great Divide Basin which can be unlocked by this processing capacity. So, that's a real
(14:45) big focus. And then of course in Saskatchewan, the Roughrider project, we continue to advance towards the full feasibility of bringing that operation into production in the early 2030s. So, between the US and Canada, we're really aiming to be a global top 10 uranium producer and taking real concrete steps to get there.
(15:09) >> Well, and because of your location in the US and Canada, we've seen quite a lot of developments, especially in the US under the Trump administration, to push the nuclear industry forward. There's a lot going on there as well. I wondered if you could pull out recent significant points that investors should watch.
(15:26) >> Yeah, listen, it's exciting to see how much legislation, bipartisan legislation out of Congress and then of course executive orders out of the Trump administration, but in a world where between Republicans and Democrats there's disagreement over maybe renewables or fossil fuels, they all agree on nuclear power.
(15:50) So, we have a very rare spot in the middle of those energy policies. And so, we've seen Nuclear Fuel Security Act, the Russian uranium ban, all encourage new production in the US. We've seen the fast-track permitting under FAST-41, and just the support that's been given to new nuclear power.
(16:13) Just last week, the Department of Energy directed 17.5 billion in loans to utilities to purchase long-lead time items for large reactors. Let's call it the AP1000s from Westinghouse. Seven utilities in the US have applied for those loans on five separate sites with twin reactors. So, we tend to think of the growth is coming from small modular advanced reactors, but there's states like Florida, Virginia, New York that have massive energy demands.
(16:47) They don't need 100 MW, they need 1,000 MW. And so, I think over the next year you're going to see new AP1000s moving forward in the United States and obviously elsewhere. So, these are all encouraging US producers to really stand up and answer the call. In my group, the Uranium Producers of America, we now have 20 members, which is a record number, six of which are in production already, and the rest are in development stages to get to that point.
(17:23) But I think we see visibility to an industry that can produce 25 30 million pounds by the early 2030s. That would be coincidentally what we're currently getting from Russia, Kazakhstan, Uzbekistan. So we think that's a logical substitution is move away from Russia, China, and their allies and have more production from the US.
(17:45) And of course, continue to rely on Canada and Australia. >> Yes, one of my themes at this conference has been asking people we've got these upcoming US midterm elections. How does that impact the landscape? And I think for uranium cuz it's so bipartisan, hopefully things just go smoothly. >> In my career, elections were always a binary event.
(18:07) The left opposed nuclear and the right supported. And so if you had a presidential administration change, it was always very traumatic in terms of industries that need to make long-term plans. We really don't have that anxiety anymore because a lot of this Nuclear Fuel Security Act and the Russian ban actually was signed Congress in the Biden administration.
(18:33) Now Trump has taken it and put on steroids, but if you did have a switch back to a Democrat control, I can't see it changing. They value nuclear for the carbon free benefits. It allows wind and solar to be intermittent if you have a large base load supply, which is carbon free. So we're really in an ideal position right now.
(18:57) >> It's really good to hear about the market and the producing assets. We don't want to forget uranium royalty. You were mentioning the billion-dollar Sweetwater acquisition. So can you share details on that one? >> of Sweetwaters in our portfolio, but this is the $1.1 billion acquisition of Sweetwater Royalties, which should close later this month.
(19:18) This is Uranium Royalty acquiring what was the historic Union Pacific land grant that the US government gave to Union Pacific Railroad to build the Intercontinental Railway back in 1860. And with that land becomes all the mineral rights and surface rights. So, in this transaction, we would become the second largest public company land owner in the United States, largest in Wyoming, 800,000 acres of surface rights, and the rest basically mineral rights.
(19:52) So, covering everything from oil and gas, uranium, critical minerals to of course trona and soda ash. That will provide Uranium Royalty. It's basically a company which has been seeing EBITDA at the $74 million dollar level annually, 30 to 50 million free cash flow that will accrue to Uranium Royalty on closing and will allow us to have basically free cash flow off our balance sheet to invest in what continues to be our focus is uranium.
(20:25) There's a lot of pipeline projects for new uranium royalty and streams that we want to invest in. We're not pivoting away from nuclear uranium. Basically using this transaction as a way to turbocharge and be in a stronger financial position to advance the uranium focus. >> Well, thank you for sharing about that, and I know we're getting close to when I need to send you back out onto the show floor.
(20:53) But, before I do, so I think investors hear all the time, they could hear in this interview how good the outlook for uranium is, and they're probably wondering what is going on with the share prices of the companies. When do we see some movement there? >> Yeah, I know, it's a very common question from investors here at the Rule Symposium is everyone agrees that things have never looked better for nuclear or uranium.
(21:14) Why have the uranium equities lagged this year? And I think it really comes down to the broader market anxieties. And you see it every — like this week we've had two examples. I think it's really AI schizophrenia. And what I mean by that is, one day we're going to be building out data centers which are going to need lots of nuclear power.
(21:33) And the next day, oh no, the data centers aren't going to be built or AI is going to save the world or it's going to destroy. But it seems like every other week. And unfortunately or fortunately, uranium trades with the AI basket. And so, we see that anxiety. We see the Gulf War anxiety where just when we think things are resolved, oh, we're back bombing them again.
(21:55) And that has really kind of kept uranium equities down. And of course, concerns about Fed policy and inflation. But the message I'm giving here at the symposium is don't lose sight of the fundamentals of uranium supply and demand, of the geopolitics and growth of nuclear power.
(22:15) Even if another data center never comes online, which isn't going to happen, we're still doubling nuclear power. And that 2 billion pound deficit is based on a doubling, not a tripling which I think will likely occur with the buildout. But the hyperscalers are not going to give up on AI just cuz it's too hard.
(22:35) They can't get the energy. They're going to build the energy and that favors natural gas, nuclear, and even coal in some parts of the US. So, it's incredibly bullish. I think it's a great opportunity to add to uranium positions. Your favorite uranium companies are on sale this week. So, we're very bullish.
(22:54) I think into the end of the year you're going to have quite a rally in uranium prices and uranium equities. >> Well, very strong note to wrap it up on. So, thank you so much for coming back to share about what's going on in the market and with the companies. >> Yep. Thank you. >> Of course. And once again, I'm Charlotte McLeod with investingnews.
(23:12) com and this is Scott Melbye.