Denison Mines Corportion

Macroeconomic Context Clean Energy (Uranium):  Demand Growth: ~2% Per Annum to 2030 US Electricity Generation: 20% ESG Net Zero Carbon Accountability: Uncovered demand with increasing rate of change for Net-Zero Carbon Accountability Global Capital Commitments: $500 Billion to Build New Reactors Other Clean Energy Sectors: Uranium operates 24/7 compared to Wind/Solar Uranium Spot Price: Collapsed 90% from 2007 peak to 2017 bottom, has climbed 66% since bottom. Q3 2020 sector dynamics: 25% of global supply Structural Deficit - to shrink the deficit, new mines are needed and most mines on standby need spot prices north of $50 per lb. Current COVID-19 supply constraints creat future shocks to bring market back to balance.    DNN Bull Financial Case: As we can see with the table below, $DNN is largely outperforming the rest of the sector in capital growth, revenue growth, and sales. It is great that the company is outperforming the market and has a high instrinsic value, but we need the investor sentiment to agree with the fundamentals to see true price appreciation. As we see below, with the uranium sector seeing an extremely high appreciation in the median of 79% YTD, Denison Mines has still outperformed the sector by more than double. This tells us that investors have favoured DNN in the uranium mining sector as their vehicle to ride the trend and transition to clean energy. $DNN Sector Median Working Capital Growth (YoY) - 2,252.60% -0.12% Revenue Growth (FWD) 2.85% -1.28% 1YR Price Performance  165.62% 79.08% EV/Sales (TTM) 67.29 3.09 EV/Sales (FWD) 74.24 2.53 Catalyst For DNN: On March 15th, Denison Mines announced that it will be added to the S&P/TSX where it saw immediate 15% increase in price. The news of this company being added to the index creates immdeiate demand effects as index funds will be purchasing shares of the company as well as early investors. This move could also increase the liquidity of the company's stock and therefore make it easier for Denison to raise cash via future equity sales. Canadian Government: "Such policies could tackle pollution from oil and gas extraction and road transportation, where annual emissions increased from 2005 to 2019, according to the government’s latest tally of national greenhouse gas pollution." -Thestar "This coming influx of $17.6 billion in green spending comes just four months after the Liberal government beefed up Canada’s climate plan with a $15-billion blueprint to slash emissions." -Thestar US Government: "In 2020, then-Presidential candidate Joe Biden and Vice-Presidential candidate Kamala Harris, pledged $2 trillion in sustainable infrastructure investment"- Forbes "most may not realize that America is also nearly 100% dependent on uranium imports — Increasingly imported from entities owned by the governments of Russia, China and their allies. Like rare earth elements, uranium is designated by the U.S. government as critical to the nation's security and economic prosperity, and the Department of Interior warned, "This dependency of the United States on foreign sources [of uranium] creates a strategic vulnerability for both its economy and military to adverse foreign government action, natural disaster, and other events that can disrupt supply of these key minerals."" - prnewswire Conclusion: It is evident that our governments globally, are inclined to cut carbon emissions to zero in the next few decades and transition to clean and sustainable enery. The shift to these products, rely heavily on rare earth metals and Uranium has the lowest carbon emissions in production. These emerging clean sectors like Electric Vehicle companies like Tesla, are pushing large competetive automotive companies to innovate in the EV space which bodes well for Uranium's future. This investment timeframe is 2-5 years, as Keynes says "anticipate the anticipation of others". 

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liquidmacro

Apr 20, 2021

59.41%

Change % Since Posting

1.01

Price When Posted

0.60

Change Since Posting

DNN

Denison Mines Corp

1.61

0.00
0.00%
Current Price

Denison Mines Corportion | Bullish Case

bullish

Macroeconomic Context Clean Energy (Uranium): 

Demand Growth: ~2% Per Annum to 2030

US Electricity Generation: 20%

ESG Net Zero Carbon Accountability: Uncovered demand with increasing rate of change for Net-Zero Carbon Accountability

Global Capital Commitments: $500 Billion to Build New Reactors

Other Clean Energy Sectors: Uranium operates 24/7 compared to Wind/Solar

Uranium Spot Price: Collapsed 90% from 2007 peak to 2017 bottom, has climbed 66% since bottom.

Q3 2020 sector dynamics: 25% of global supply Structural Deficit - to shrink the deficit, new mines are needed and most mines on standby need spot prices north of $50 per lb. Current COVID-19 supply constraints creat future shocks to bring market back to balance. 

 

 

DNN Bull Financial Case:

As we can see with the table below, $DNN is largely outperforming the rest of the sector in capital growth, revenue growth, and sales. It is great that the company is outperforming the market and has a high instrinsic value, but we need the investor sentiment to agree with the fundamentals to see true price appreciation. As we see below, with the uranium sector seeing an extremely high appreciation in the median of 79% YTD, Denison Mines has still outperformed the sector by more than double. This tells us that investors have favoured DNN in the uranium mining sector as their vehicle to ride the trend and transition to clean energy.

 
 
 
$DNN
Sector Median
Working Capital Growth (YoY)
 
2,252.60%
-0.12%
Revenue Growth (FWD)
 
 
2.85%
-1.28%
1YR Price Performance 
 
 
165.62%
79.08%
EV/Sales (TTM)
 
 
67.29
3.09
EV/Sales (FWD)
 
 
74.24
2.53

 

Catalyst For DNN:

On March 15th, Denison Mines announced that it will be added to the S&P/TSX where it saw immediate 15% increase in price. The news of this company being added to the index creates immdeiate demand effects as index funds will be purchasing shares of the company as well as early investors. This move could also increase the liquidity of the company's stock and therefore make it easier for Denison to raise cash via future equity sales.

 

Canadian Government: "Such policies could tackle pollution from oil and gas extraction and road transportation, where annual emissions increased from 2005 to 2019, according to the government’s latest tally of national greenhouse gas pollution." -Thestar

"This coming influx of $17.6 billion in green spending comes just four months after the Liberal government beefed up Canada’s climate plan with a $15-billion blueprint to slash emissions." -Thestar

 

US Government: "In 2020, then-Presidential candidate Joe Biden and Vice-Presidential candidate Kamala Harris, pledged $2 trillion in sustainable infrastructure investment"- Forbes

"most may not realize that America is also nearly 100% dependent on uranium imports — Increasingly imported from entities owned by the governments of RussiaChina and their allies. Like rare earth elements, uranium is designated by the U.S. government as critical to the nation's security and economic prosperity, and the Department of Interior warned, "This dependency of the United States on foreign sources [of uranium] creates a strategic vulnerability for both its economy and military to adverse foreign government action, natural disaster, and other events that can disrupt supply of these key minerals."" - prnewswire

Conclusion:

It is evident that our governments globally, are inclined to cut carbon emissions to zero in the next few decades and transition to clean and sustainable enery. The shift to these products, rely heavily on rare earth metals and Uranium has the lowest carbon emissions in production. These emerging clean sectors like Electric Vehicle companies like Tesla, are pushing large competetive automotive companies to innovate in the EV space which bodes well for Uranium's future. This investment timeframe is 2-5 years, as Keynes says "anticipate the anticipation of others". 

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3 min

1.90

Target Price

8/ 10

Confidence

3+ Years

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