Toronto-based Sprott Asset Management has agreed to acquire the $848.8 million North Shore Global Uranium Mining ETF (URNM) from Exchange Traded Concepts, as interest in financial exposure to the uranium industry continues to drive higher.
In a statement, Sprott said it has agreed to license the index of uranium equities created by North Shore Indices Inc. and take URNM’s assets into a new ETF under the Sprott Funds Trust. The fund will be renamed the Sprott Uranium Miners ETF, but will retain its ticker.
Terms of the deal were not disclosed. The reorganization is expected to close in the first quarter of 2022, pending approvals by regulators and URNM shareholders.
Uranium has become an unlikely breakout category in 2021 given the rising costs of fossil-fuel energy and the carbon-free electricity that nuclear generation promises. The spot price of uranium had been in a bear decade after the Fukushima Daiichi nuclear reactor accident in 2011 soured global demand for nuclear energy.
URNM has produced returns of 121.54% and a 915% gain in assets so far this year. The Global X Uranium ETF (URA) has had lighter returns of 88.87% and has seen a 135.5% increase in its assets.
Sprott Chief Executive Officer John Ciampaglia said URNM will complement the Sprott Physical Uranium Trust, which the firm acquired in July of this year. The closed-end trust, which trades on the Toronto Stock Exchange, currently holds just under $1.6 billion in AUM and 35.2 million pounds of yellowcake.
The Physical Uranium Trust currently trades in the U.S. on over-the-counter markets, but Sprott is preparing to file a listing application to bring the fund onto the NYSE Arca. Instead of trading as an ETF, the fund’s underwriters can issue new shares whenever it is trading at a premium of its net asset value in aftermarket offerings.
Ciampaglia said those offerings have been part of what has provided the additional $1 billion in assets to the fund since acquisition, and he believes it and URNM will be go-to choices for investors seeking financial exposure to the uranium industry amid demand for carbon-free power.
“We still think we’re in the early, early innings of this cycle for uranium,” he said.