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March 14, 2021
Public perception is big in this space: People are weary/scared of ‘nuclear’
Uranium is an important part of baseload energy
Uranium is cheap on a cash basis and produces no carbon
Uranium markets Very price dependent and very small
There is Lots of Uranium on earth
More demand at good prices = Return $ to shareholders
Global costs Takes $50-$60 a pound in order to be viable
Market needs to 2x price of uranium
New reactors are under construction
50 in progress
Some old reactors retire
Interesting to see the MW/GW of reactors taken offline
To track the number of nuclear power being added/removed
Calculate the Net # of MW/GW
When they come online
When the come offline
Takes years for Uranium to be mined
Can’t just massively increase supply if demand is hitting
Uranium mining is Capital intensive
New plants take time to pass regulation, development
Uranium Fuel Cycle takes 18-24 Months from Start-Finish (see below)
VERY DIFFERENT THE GAS/SHALE industry for mining (attaining greater supply)
18-24 months
Mine uranium ore
Crush rock ore into powder and stacked into drums to ship to processing plant U3O8
Uranium goes from black to yellow (UO3 - Uranium trioxide) at processing plant ‘Yellowcake’
Enriched at a plant by adding chemicals and processing UO3 -> UO2 (Uranium dioxide) which is the UO2 that is used for nuclear fuel
Fabricated into Pellets
Pellets are put into rods
These numbers are captured from the World Nuclear Association using 2021 Uranium production
Kazakhstan ~ 45%
Namibia ~ 12%
Canada ~ 9%
Australia ~ 9%
Uzbekistan ~ 7%
Russia ~ 5%
Niger ~ 5%
China ~ 4%
India ~ 1%
Ukraine ~ 1%
South Africa ~ 1%
Others ~ 1%
Producers shutdowns have occurred (mainly due to Covid) causing a supply shortage
Market prices initially took off a bunch naturally… (supply/demand economics)
$50 spot price necessary for some of these mines to be profitable basic math
Can't be pulling uranium out of the ground for $50 and sell for $15-16
Efficient producers getting shutdown were interesting
Kazakhstan cheapest production in the world got shut down
Canadians (two of the highest grade mines in the world)
McArthur lake
Cigar lake
China has what’s called the 3-legged stool
1. ) Domestic production
So far not so good at finding Uranium
They are willing to go to length (been digging deep for tests)
2.) Ownership of Uranium assets overseas
They can do this through acquisition of projects or joint ventures
China only has access to 2 / 5 of the top Uranium producers
Kazakhstan & Namibia
Australia currently does not allow china to even discuss having control of Uranium assets so that’s a non-starter due to current politics
Canada has laws to prevent > 49% ownership
Niger is currently sovereign under France so China would have to operate in partnership with France unless China is willing to undertake responsibility
Namibia
Friendly with Uranium production/mining
CGN owns 90% of the whosub mine
CNNC has controlling interest in the rossing mine
CNNC has 25% of Lenn-Heinrick mine
3.) Accumulating pounds of Uranium in the Spot Market/Inventory
Big buyer in kaKazakhstan
October 9, 2021
People need to understand that $21/lb -> $50/lb
Makes uranium market ½ as attractive
Last ½ of market still very ‘fun’ (2-3x in 2years)
IEA estimates the total cost to produce 1 pound of Uranium is $55-65 per pound
Total cost (not just mining)
Production
Refinement
Shipping
In the United States
14% of total electrical consumption is Nuclear Energy
20% of baseload consumption is Nuclear Energy
Due to Inflation, the price doesn’t go up relative to cost of production
Current Supply + Demand Economics
200M/lbs of Demand in Uranium globally
130M/lbs supply in Uranium globally
70M/lbs supply deficit globally!!
Immediate moves in Uranium price have already occurred
Note: Sprott ATM offering in Aug 17-19 kicked prices into action
Shutting down mines takes 2 years to get back to full production
Process
Mine - Refinement - Yellowcake - (Taking 1 year of time)
Supply can be relatively unaffected by price for up to 3 years
Clean Carbon-free Energy
Baseload energy
Demand outpaces Supply
Supply demand fundamentals
China on Track to consume current globally supply today by 2040
Energy crisis globally
Puts pressure on Nations to go Nuclear as
Pushed politically to go “clean” (greenwashing)
Its scientifically the most least carbon emitting Energy Source according to the United Nations
Renewed realizations that Solar + Wind + battery storage will not cut it.
Japan restarting Nukes
EU Taxonomy Green Label + incentives
Plans For New Reactors Worldwide - Constantly being updated
Greenflation/Inflation
oil/gas increasing is burden to consumers
Considering “dirty” fossil fuels
Shift for economic/ecological solution
Biden $6B program
Feb 7, 2022
URA rebalancing has completed (word from Justin Huhn - Uranium Insider)
Fed 9, 2022 (AFTER MARKET CLOSE COMMENTS ON CAMECO)
RBC - Cameco: "Well-positioned to benefit from positive trends in uranium. We are encouraged by increased long-term contracting activity signaling that the contract cycle is gaining momentum, which is a long term positive for Cameco"
TD - Cameco: - "Contracting Cycle Gaining Momentum. The resumption of a term contract cycle is the final indicator we have been looking for to suggest that uranium pricing is setting the stage for another leg higher.”
Cameco's Disciplined Approach to McArthur Restart well Received by market
2021
New Jersey nuclear plant proposed at site of old reactor Jan 5, 2021
Mini Nuclear Reactors Offer Promise of Cheaper, Clean Power Feb 11, 2021
Safe Nuclear Reactors? It's Time to Separate Fact From Fiction Feb 19, 2021
France extends lifetime of its oldest nuclear reactors Feb 25, 2021
Canada Embraces Nuclear Energy Expansion to Lower Carbon Emissions Mar 3, 2021
Nuclear Power Looks to Regain Its Footing 10 Years after Fukushima Mar 9, 2021
Russia, Turkey collaborate on nuclear reactor construction project
2022
Conflict in Kazakhstan, World’s largest producer of Uranium Jan 5, 2022
Energy price hike prompts Italian nuclear rethink Jan 5, 2022
WSJ - Is Nuclear Power Part of the Climate Solution? Jan 7, 2022
Majority of U.S. states to favor nuclear power for emission cuts Jan 18, 2022
Kazatomprom to Produce 21,000-22,000 Tons of Uranium in 2022 Jan 27, 2022
Sweden Approves Nuclear Waste Site to Keep Its Reactors Running Jan 28, 2022
2023
Italy / National Society Calls For Government To Restart Nuclear Programme As Part Of ‘Energy Mix Of Future’ Jan 4, 2023
Study shows advantages of charging electric heavy-duty vehicles with small modular nuclear reactors Jan 17, 2023
US regulator completes first SMR design certification rulemaking Jan 23, 2023
GE Hitachi Signs Contract for the First North American Small Modular Reactor Jan 27, 2023
Japan Adopts Plan to Make Maximum Use of Nuclear Power Feb 10, 2023
2024
March 14, 2021
Public perception is big in this space: People are weary/scared of ‘nuclear’
Uranium is an important part of baseload energy
Uranium is cheap on a cash basis and produces no carbon
Uranium markets Very price dependent and very small
There is Lots of Uranium on earth
More demand at good prices = Return $ to shareholders
Global costs Takes $50-$60 a pound in order to be viable
Market needs to 2x price of uranium
New reactors are under construction
50 in progress
Some old reactors retire
Interesting to see the MW/GW of reactors taken offline
To track the number of nuclear power being added/removed
Calculate the Net # of MW/GW
When they come online
When the come offline
Takes years for Uranium to be mined
Can’t just massively increase supply if demand is hitting
Uranium mining is Capital intensive
New plants take time to pass regulation, development
Uranium Fuel Cycle takes 18-24 Months from Start-Finish (see below)
VERY DIFFERENT THE GAS/SHALE industry for mining (attaining greater supply)
18-24 months
Mine uranium ore
Crush rock ore into powder and stacked into drums to ship to processing plant U3O8
Uranium goes from black to yellow (UO3 - Uranium trioxide) at processing plant ‘Yellowcake’
Enriched at a plant by adding chemicals and processing UO3 -> UO2 (Uranium dioxide) which is the UO2 that is used for nuclear fuel
Fabricated into Pellets
Pellets are put into rods
These numbers are captured from the World Nuclear Association using 2021 Uranium production
Kazakhstan ~ 45%
Namibia ~ 12%
Canada ~ 9%
Australia ~ 9%
Uzbekistan ~ 7%
Russia ~ 5%
Niger ~ 5%
China ~ 4%
India ~ 1%
Ukraine ~ 1%
South Africa ~ 1%
Others ~ 1%
Producers shutdowns have occurred (mainly due to Covid) causing a supply shortage
Market prices initially took off a bunch naturally… (supply/demand economics)
$50 spot price necessary for some of these mines to be profitable basic math
Can't be pulling uranium out of the ground for $50 and sell for $15-16
Efficient producers getting shutdown were interesting
Kazakhstan cheapest production in the world got shut down
Canadians (two of the highest grade mines in the world)
McArthur lake
Cigar lake
China has what’s called the 3-legged stool
1. ) Domestic production
So far not so good at finding Uranium
They are willing to go to length (been digging deep for tests)
2.) Ownership of Uranium assets overseas
They can do this through acquisition of projects or joint ventures
China only has access to 2 / 5 of the top Uranium producers
Kazakhstan & Namibia
Australia currently does not allow china to even discuss having control of Uranium assets so that’s a non-starter due to current politics
Canada has laws to prevent > 49% ownership
Niger is currently sovereign under France so China would have to operate in partnership with France unless China is willing to undertake responsibility
Namibia
Friendly with Uranium production/mining
CGN owns 90% of the whosub mine
CNNC has controlling interest in the rossing mine
CNNC has 25% of Lenn-Heinrick mine
3.) Accumulating pounds of Uranium in the Spot Market/Inventory
Big buyer in kaKazakhstan
October 9, 2021
People need to understand that $21/lb -> $50/lb
Makes uranium market ½ as attractive
Last ½ of market still very ‘fun’ (2-3x in 2years)
IEA estimates the total cost to produce 1 pound of Uranium is $55-65 per pound
Total cost (not just mining)
Production
Refinement
Shipping
In the United States
14% of total electrical consumption is Nuclear Energy
20% of baseload consumption is Nuclear Energy
Due to Inflation, the price doesn’t go up relative to cost of production
Current Supply + Demand Economics
200M/lbs of Demand in Uranium globally
130M/lbs supply in Uranium globally
70M/lbs supply deficit globally!!
Immediate moves in Uranium price have already occurred
Note: Sprott ATM offering in Aug 17-19 kicked prices into action
Shutting down mines takes 2 years to get back to full production
Process
Mine - Refinement - Yellowcake - (Taking 1 year of time)
Supply can be relatively unaffected by price for up to 3 years
Clean Carbon-free Energy
Baseload energy
Demand outpaces Supply
Supply demand fundamentals
China on Track to consume current globally supply today by 2040
Energy crisis globally
Puts pressure on Nations to go Nuclear as
Pushed politically to go “clean” (greenwashing)
Its scientifically the most least carbon emitting Energy Source according to the United Nations
Renewed realizations that Solar + Wind + battery storage will not cut it.
Japan restarting Nukes
EU Taxonomy Green Label + incentives
Plans For New Reactors Worldwide - Constantly being updated
Greenflation/Inflation
oil/gas increasing is burden to consumers
Considering “dirty” fossil fuels
Shift for economic/ecological solution
Biden $6B program
Feb 7, 2022
URA rebalancing has completed (word from Justin Huhn - Uranium Insider)
Fed 9, 2022 (AFTER MARKET CLOSE COMMENTS ON CAMECO)
RBC - Cameco: "Well-positioned to benefit from positive trends in uranium. We are encouraged by increased long-term contracting activity signaling that the contract cycle is gaining momentum, which is a long term positive for Cameco"
TD - Cameco: - "Contracting Cycle Gaining Momentum. The resumption of a term contract cycle is the final indicator we have been looking for to suggest that uranium pricing is setting the stage for another leg higher.”
Cameco's Disciplined Approach to McArthur Restart well Received by market
2021
New Jersey nuclear plant proposed at site of old reactor Jan 5, 2021
Mini Nuclear Reactors Offer Promise of Cheaper, Clean Power Feb 11, 2021
Safe Nuclear Reactors? It's Time to Separate Fact From Fiction Feb 19, 2021
France extends lifetime of its oldest nuclear reactors Feb 25, 2021
Canada Embraces Nuclear Energy Expansion to Lower Carbon Emissions Mar 3, 2021
Nuclear Power Looks to Regain Its Footing 10 Years after Fukushima Mar 9, 2021
Russia, Turkey collaborate on nuclear reactor construction project
2022
Conflict in Kazakhstan, World’s largest producer of Uranium Jan 5, 2022
Energy price hike prompts Italian nuclear rethink Jan 5, 2022
WSJ - Is Nuclear Power Part of the Climate Solution? Jan 7, 2022
Majority of U.S. states to favor nuclear power for emission cuts Jan 18, 2022
Kazatomprom to Produce 21,000-22,000 Tons of Uranium in 2022 Jan 27, 2022
Sweden Approves Nuclear Waste Site to Keep Its Reactors Running Jan 28, 2022
2023
Italy / National Society Calls For Government To Restart Nuclear Programme As Part Of ‘Energy Mix Of Future’ Jan 4, 2023
Study shows advantages of charging electric heavy-duty vehicles with small modular nuclear reactors Jan 17, 2023
US regulator completes first SMR design certification rulemaking Jan 23, 2023
GE Hitachi Signs Contract for the First North American Small Modular Reactor Jan 27, 2023
Japan Adopts Plan to Make Maximum Use of Nuclear Power Feb 10, 2023
2024
Been in accumulation mode during the bear market
China has the long-game outlook
China’s Inventory:
People confuse the Large inventory right now, some say China is done buying, but Brandon Munro states everyone’s wrong and that China has lots more buying to do as the current stockpile is for security for further project rollouts
China is going to by more as the current high-end estimates are that by 2040 China will consume the same amount of Uranium that is currently mined each year today
China has to buy more as inference from the two points from above, nations like Russia and the United States will not like the squeeze in price that will inevitably occur when China needs to buy more. So China purchasing more will have impacts globally on the Uranium market in time where supply shortages are very evident
Demand for uranium relative to price is extremely inelastic
Sprott getting involved sped up the timeframe of investment thesis
Some above ground inventories may sell to Sprott
Increase in liquidity when $SPUT is listed on NYSE
Although may not be the case anymore according to Rick Rule as he did not anticipate such a vast amount of $ to flow into the Toronto Stock Exchange
Restarting 40 Nuclear Power Plants in Japan
Increase demand by 20M lbs/year
Reduce supply available for sale in their inventories
Utility companies have been playing chicken with signing long-term price contracts
Been buying directly off spot markets for past few years as its been cheap
With entrance of Sprott buying consistently in spot market, they have soaked up most of the bid
Due to this you will start to see increase in utility signing long term contracts
Good for market in general as a previously stagnant market is coming alive again
$SPUT being ‘green lit’ before Q1 2022 is very optimistic
The end of the world's capital of brown coal Apr 19, 2021
Iraq considers nuclear energy Apr 26, 2021
Japan utility gets OK to restart 3 old nuclear reactors April 28, 2021
UAE's Second Nuclear Reactor Begins Operations Sep 11, 2021
Clean fusion power in Canada Feb 2, 2022
Justin Huhn - “Cameco contracted more in 1 month of Jan 2022 (40mlbs) than all of 2021 (30mlbs)” Feb 9, 2022
UEC to double resources through UEX acquisition Jun 14, 2022
Amid Global Crises, Nuclear Power Provides Energy Security with Increased Electricity Generation in 2021 Jul 14, 2022
Chinese molten-salt reactor cleared for start up Aug 9, 2022
California lawmakers vote to extend Diablo Canyon nuclear plant operations as state battles energy emergency Sep 1, 2022
Denison Announces History-Making Recovery of Uranium Bearing Solution from Phoenix ISR Feasibility Field Test Oct 17, 2022
GoviEx Announces Positive Results from Completed Falea Copper-Silver-Uranium Exploration Program Oct 31, 2022
Canada proposes tax credits for SMRs Nov 11, 2022
Two Finnish nuclear reactors to receive fuel from US Nov 23, 2022
China and the US Are Racing to Go Nuclear in Space Nov 23, 2022
Canada / Port Authority Announces Plans For ARC-100 SMR At New Brunswick Green Energy Hub Dec 1, 2022
Officials: No injuries, release of radioactivity after uranium fire at Y-12 in Oak Ridge Feb 22, 2023
Word on the Nuclear Street: Demand, Demand, Demand May 23, 2023
Windhoek ‘has no plans’ to take stakes in existing gas or mineral licences, government tells African Energy May 31, 2023
New nuclear reactors coming to Bruce County Jul 5, 2023
Powering Ontario’s Growth Jul 10, 2023
Will Niger Troubles Squeeze Uranium Supply? Aug 29, 2023
Been in accumulation mode during the bear market
China has the long-game outlook
China’s Inventory:
People confuse the Large inventory right now, some say China is done buying, but Brandon Munro states everyone’s wrong and that China has lots more buying to do as the current stockpile is for security for further project rollouts
China is going to by more as the current high-end estimates are that by 2040 China will consume the same amount of Uranium that is currently mined each year today
China has to buy more as inference from the two points from above, nations like Russia and the United States will not like the squeeze in price that will inevitably occur when China needs to buy more. So China purchasing more will have impacts globally on the Uranium market in time where supply shortages are very evident
Demand for uranium relative to price is extremely inelastic
Sprott getting involved sped up the timeframe of investment thesis
Some above ground inventories may sell to Sprott
Increase in liquidity when $SPUT is listed on NYSE
Although may not be the case anymore according to Rick Rule as he did not anticipate such a vast amount of $ to flow into the Toronto Stock Exchange
Restarting 40 Nuclear Power Plants in Japan
Increase demand by 20M lbs/year
Reduce supply available for sale in their inventories
Utility companies have been playing chicken with signing long-term price contracts
Been buying directly off spot markets for past few years as its been cheap
With entrance of Sprott buying consistently in spot market, they have soaked up most of the bid
Due to this you will start to see increase in utility signing long term contracts
Good for market in general as a previously stagnant market is coming alive again
$SPUT being ‘green lit’ before Q1 2022 is very optimistic
The end of the world's capital of brown coal Apr 19, 2021
Iraq considers nuclear energy Apr 26, 2021
Japan utility gets OK to restart 3 old nuclear reactors April 28, 2021
UAE's Second Nuclear Reactor Begins Operations Sep 11, 2021
Clean fusion power in Canada Feb 2, 2022
Justin Huhn - “Cameco contracted more in 1 month of Jan 2022 (40mlbs) than all of 2021 (30mlbs)” Feb 9, 2022
UEC to double resources through UEX acquisition Jun 14, 2022
Amid Global Crises, Nuclear Power Provides Energy Security with Increased Electricity Generation in 2021 Jul 14, 2022
Chinese molten-salt reactor cleared for start up Aug 9, 2022
California lawmakers vote to extend Diablo Canyon nuclear plant operations as state battles energy emergency Sep 1, 2022
Denison Announces History-Making Recovery of Uranium Bearing Solution from Phoenix ISR Feasibility Field Test Oct 17, 2022
GoviEx Announces Positive Results from Completed Falea Copper-Silver-Uranium Exploration Program Oct 31, 2022
Canada proposes tax credits for SMRs Nov 11, 2022
Two Finnish nuclear reactors to receive fuel from US Nov 23, 2022
China and the US Are Racing to Go Nuclear in Space Nov 23, 2022
Canada / Port Authority Announces Plans For ARC-100 SMR At New Brunswick Green Energy Hub Dec 1, 2022
Officials: No injuries, release of radioactivity after uranium fire at Y-12 in Oak Ridge Feb 22, 2023
Word on the Nuclear Street: Demand, Demand, Demand May 23, 2023
Windhoek ‘has no plans’ to take stakes in existing gas or mineral licences, government tells African Energy May 31, 2023
New nuclear reactors coming to Bruce County Jul 5, 2023
Powering Ontario’s Growth Jul 10, 2023
Will Niger Troubles Squeeze Uranium Supply? Aug 29, 2023
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