Uranium Prices

[dan_s]

Note from RBC Capital
September 26, 2023
RBC Uranium Watch
Uranium spot prices push past $70/lb on stronger demand
Our view: Uranium prices jumped higher this past week on strong demand while supply-side concerns
persist. Our industry checks indicate increasing participation from non-US buyers recently including
Russian, Chinese, and Korean entities while UxC and TradeTech report strong activity in the term market
(both on- and off-market). Russian involvement has piqued our interested in particular as Russia has
historically been seen as self-sufficient on supply, but we don't have sufficient information to read more
into this development at this time. Adding to this mix is strong investor interest and sentiment while the
Sprott Uranium Trust still has ~$50M yet to be deployed. On the news front, Canada has committed C$3B
funding to complete two partially completed CANDU-based reactors in Romania, France has ordered
troops to withdraw from Niger while Orano has halted in-country uranium processing, and Swedish
utility Vattenfall has purchased land intended for new reactor builds (a further indication of Sweden's
recommitment to nuclear power).

[Lbark]

Yellow Cake which is another trust like SRUUF or SPUT that buys uranium is going to buy their annual allotment from Kazatomprom. They have a right each year to buy a certain amount so that will create more demand which will be more supply taken off the market for the utilities. Justin Huhn or Uranium Insider on his daily market update talked about the rumor of Russia or Rosatom trying to buy uranium which as mentioned would be bullish. He said he or his sources cannot confirm, but regardless the price is doing well.

[mitchl]

Kazatomprom to begin unwinding production cuts leading into 2025

https://www.mining.com/web/kazatomprom-to-end-uranium-production-cuts-in-2025/

“As we are seeing a clear sign that the industry has entered into the new long-term contracting cycle, driven by the recognition of the restocking needs, Kazatomprom, with its best-class and lowest cost mines, is absolutely prepared to respond to these improving market conditions”.

[Lbark]

with last couple of days of beat down in uranium prices they are looking more appealing. SRUUF or Sput is now again at about 5-6% discount. Today it may be wider. Nothing has changed re the price of U going up so anything mid single digits discount is good opportunity to add to the commodity. I believe I saw that SRUUF is going to be listed in November on NYSE. If true that could be big for the stock. It was denied a listing last year because they did NOT have a redemption feature. They are in process of adding one although limited to big funds and utilities. This could create an options market which would also be good for the stock.

[Lbark]

Disregard the comment about the NYSE listing of Sprott Uranium trust. Too much disinformation rereading it. It showed November 31. People think things like that are funny. However, the comments about the stock itself are still very true. Good buy

at a discount.

[mitchl]

Agreed, SRUUF the safest way to play the trade.

-8.59% discount at the time of this post

https://sprott.com/investment-strategies/physical-commodity-funds/uranium/

[Lbark]

Just read this months edition of the Uranium Insider and as usual he has some great points as well as some other tidbits from others on the market like Harris Kupperman The Kazatomprom decision to increase production may add some pounds but most if not all are committed to China, Orano---French company which needs pounds since they look like they are losing their Niger mines and Russia. Even if they come close to their production and there are lbs left after these commitments there would still be huge deficits mid and longer and short term.

Cantor Fitzgerald said that if a buyer needed 1m lbs the order could take 3-4 weeks and possible gap up price 10/lb.
supply is constrained until 2H 2027;
2 more physical acquistion funds rumored to be on the way with a 500m launch of a singapore fund.
The industry has real issues in that there has been a decline of 39% of mining engineers since 2014-----this may apply to oil and gas, too.

Utilities have drawn down inventories to low levels but the last time that happened in mid 2000s there was a surplus and now a deficit.

like oil and gas i am looking to add to uranium stocks and oil and gas. It is not fund seeing our stuff go way down but i am firmly in camp of higher and higher uranium prices.

[Lbark]

https://www.youtube.com/watch?v=lkTnW2GRwOc

great interview with Adam who can see uranium going well over 120 possibly 300 on a spike. Regardless over 100 the miners will fly.

[ChuckGeb]

Big nuclear energy conference in a couple of weeks in Charlotte. Good time to pick up shares and SPUT (SRUUF) before the conference as the looming shortfall in supply is becoming clearer every day.

[mitchl]

https://twitter.com/uraniuminsider/status/1711878221229351242

Justin Huhn (Uranium Insider) is doing a free live webinar tomorrow afternoon (link to register in the tweet). I thought I would post it here in case any members are interested. It will probably be worthwhile for anyone looking for an overview in the thesis. I’m not subscribed to his paid service but I am assuming he will take the opportunity to advertise it as a heads up.

Justin Huhn is one of the only guys that only covers the uranium market. Very few seem to know as much about it as Justin Huhn does.

Words of caution: others places online I have seen some have criticized Justin for being a permabull and I think a lot of people got stuck buying in the late 2021 highs for URNM. While the fundamentals are coming in nicely everyday, I’m very scared to chase highs in this sector. There is extreme risk if a grave black swan nuclear disaster occurs.

[ChuckGeb]

I am a recent subscriber and have found the investment of time and $$ to be a good value. A lot of very good info and market coverage. It is clear uranium supply/demand is set up in early stages of bull market. His newsletter and frequent updates stress the hazards of the thinly traded marketplace and they stress patience, discipline and not chasing their picks. If you are interested in uranium market this is highly recommend. At the end of the zoom call he will in all likelihood offer a discount for signing up.
Attached is recent YouTube on current bull market.
https://youtu.be/wW2TJ7lGhog?si=7VsOPvDfh56Y46vq

[Lbark]

I’ve been a subscriber for over a year now. He is definitely not a permabull
He was very cautious on the 12 to 18 months consolidation. He always preaches enter positions in tranches instead of all at once. His picks have done well and he’s not afraid to admit mistakes.

Besides uranium, he has big positions in oil and gas and precious metals. His daily updates are excellent, and on the same line as Dan’s talking about particular stocks, and the industry in general.

[mitchl]

Considering all the yellow tape with permitting and regulations for both mines and nuclear power plants these things can take 10 years to construct. A rush to nuclear could very easily pave the way to a 10-15 year bull market in uranium prices. Patience and disciplined are essential. If you want to play "woke" nuclear + natural gas are the answers to the world's power demand that actually work. I'd like to see the math on how many multiples uranium prices could increase and it still be more economical than wind in such large power generation volumes. The math is not as a trivial considering the nuance of the "enrichment" process I believe which I would have to defer to Justin or other experts.

As far as safety I believe nuclear accidents are few and far between. Compared to other energy sources, deaths associated to accidents are some of the fewest for nuclear energy by far.

Nuclear is great and consistent for base load power. It doesn't always trade this way in the short term - but I believe for this reason it should be the most economic recession proof energy source.

[mitchl]

Chuck and lbarken, thanks for the insight from being a subscriber. I haven't been and do don't know anyone who has so I'm in the unknown on what those daily updates are actually like. I'll consider it especially if there is a discount tomorrow! ha

I'm guessing most of the bashing of him I have seen are just more suckers who FOMO'd too quickly and too early who have no one to blame but themselves. Or they have an investment time frameof a long weekend.

[Lbark]

You are welcome. Just today one of the Stocks is down quite a bit in Smr space talk about how we have to take a wait-and-see attitude. He is a big believer in the technology, but this may not be the right way to play this particular sector.
On another note, if no one has seen the Michael Moore, or Oliver Stone movies they should. I am shocked that I am recommending these movies because there’s nothing about these two gentlemen I like other than their feelings are nuclear. They also take pot shots at solar and wind and other green technologies, and admit that they are, not what people believe they are. They believe nuclear is one of the best ways to go.

[mitchl]

The climate cult believes we need to act incredibly quickly to stop the "harm" of fossil fuels. Part of the irony is the continued push for wind and solar for everything is simply a waste of time and a distraction. If they are actually serious about their mission they will have to all come around (like some are) to nuclear. And they need to begin immediately getting nuclear plants back online and new mines built and permitted if they truly think we need to "act now".

I believe it was the former CEO of Kazatamprom said the world needs something of the tune of 4 more Kazatamprom to keep with future uranium demand.

[ChuckGeb]

Plenty of time in bull market to learn and wade in at a comfortable pace taking away the urge to jump in on a red hot market day like has happened over last 6 weeks. Learn why getting exposure to junior miners thru an etf is not best way to go. While on the other hand buying the physical uranium etf when it is trading at 5+ points or more discount to NAV is a pretty solid plan in this bull market.lots of info and regular updates. Be prepared to spend a couple of hours a week to review and digest it.

[Lbark]

John Quakes
@quakes99

John Quakes is a great resource for uranium. He is on twitter. Posts all kinds of links to videos and other information. Justin Huhn is great but most of his stuff is for subscribers ---but he really respects John Quakes.

[Fraser921]

Good thing Germany is shutting down it's operating nuclear plants

[Lbark]

Germany is clueless. I know they have spent close to 1T on renewables (some large amount) and have gotten nowhere. I think it was Rick Rule who said that with all the climate crap going on and 5T or so in renewables that the reduction in carbon emissions went from 83% to 82% or something. It was a 1% reduction with trillions of dollars invested. I saw today that GM has put off by a year one of their new EV trucks for mfg. You think the lack of mining for copper, lithium etc won't at some time hurt EV production. We need nuclear and OG. rant done.

[Fraser921]

I agree 100 % with your sentiments. Common sense is lacking. Nuclear has zero co2 emissions.
I think the whole green initiative is a scam.

BTW, Sprout has other funds. I used to own CEF a gold and silver etf and it is also at a discount

[ChuckGeb]

SPUT (SRUUF) closed yesterday at 7.16% discount to NAV. Got in under yesterday’s close this am and it rose 3.4% today and in my view will double in next twelve months. Just my thinking right now with limited experience in this market. Don’t see much downside risk at current pricing.