Precious metals specialist Sprott Asset Management LP is wading into the uranium industry by taking over the management of Uranium Participation Corp., betting the out-of-favour commodity will benefit from a broader societal push toward lower carbon emissions.
Founded in 2005, Toronto-based UPC is one of the few companies in the world that stockpiles physical uranium. Still, over the past few years, with uranium in a protracted bear market, the Toronto Stock Exchange-listed company has struggled to attract investor interest and maintain large trading volumes.
Sprott Asset Management on Wednesday said it will pay about $14.5-million to reorganize UPC from a corporation into a trust. Sprott hopes to broaden the investor appeal of the uranium holding company by adding an additional stock listing on the New York Stock Exchange.
Denison Mines Corp., the current manager of Uranium Participation, will be replaced by Sprott and WMC Energy, a global commodities merchant with expertise in the nuclear industry.
Hoping to benefit from its well-established brand name in the money management business, Sprott plans to rename the entity as the Sprott Physical Uranium Trust.
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