# Investing In Uranium

**Published by:** [Pingu0x](https://paragraph.com/@pingu0x/)
**Published on:** 2022-11-21
**URL:** https://paragraph.com/@pingu0x/investing-in-uranium

## Content

Uranium Initial notes 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) Uranium Fuel Cycle 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 Top Uranium Producers Worldwide (2021) 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 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 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 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 Uranium Revisited 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 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 Uranium Thesis 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 Uranium Revisited 2022 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 Timeline of Events Since I’ve Been Tracking Uranium Space 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 Mar 10, 2021 Discovery of new high-grade unconformity-hosted uranium mineralization Apr 14, 2021 Small Nuclear Reactor Study Released, Alberta Signs SMR MOU Apr 14, 2021 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 WhiteHouse Eyes Subsidies for Nuclear Plants to Meet Climate Targets May 5, 2021 Three Northern Indigenous companies sign on to small nuclear reactors May 11, 2021 Bill Gates' next generation nuclear reactor to be built in Wyoming Jun 2, 2021 Japan Restarts First Nuclear Reactor Since 2018 Amid Hurdles Jun 22, 2021 China launches first commercial onshore small reactor project Jul 12, 2021 Canada’s nuclear industry wants to build reactors in the Arctic Jul 15, 2021 U.K. Moves Ahead With Small Nuclear Reactor Pilot Program Jul 28, 2021 Sprott Physical Uranium Trust Launches "At-The-Market" Equity Program Aug 17, 2021 Illinois legislature edges closer to saving two nuclear power plants Sep 9, 2021 UAE's Second Nuclear Reactor Begins Operations Sep 11, 2021 Kazatomprom Announces Investment in Physical Uranium Fund $50M Oct 18, 2021 France Vows to build new nuclear reactors to meet climate goals Nov 9, 2021 President signs Infrastructure Bill w/ Nuclear Energy Provisions included Nov 9, 2021 Sprott Uranium Trust seeks to raise up to $3.5B to buy more uranium Nov 23, 2021 U.S. energy chief hints California may grant reprieve last nuclear plant Nov 30, 2021 Cambridge BWXT Canada lands nuclear contracts worth up to $1B Dec 15, 2021 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 EU Taxonomy Feb 2, 2022 Clean fusion power in Canada Feb 2, 2022 Questions and Answers on the EU Taxonomy Complementary Climate Delegated Act covering certain nuclear and gas activities Feb 2, 2022 Justin Huhn - “Cameco contracted more in 1 month of Jan 2022 (40mlbs) than all of 2021 (30mlbs)” Feb 9, 2022 Cameco Q4/Annual Results - Tim Gitzel Cameco CEO: "IT IS TIME." Feb 9, 2022 China’s Hualong One Nuclear Reactor Design Purchased By Argentina Feb 9, 2022 U.S. utilities push White House not to sanction Russian uranium Mar 2, 2022 Philippines to revive nuclear energy program to help replace coal plants Mar 3, 2022 Pro-nuclear candidate Yoon elected in South Korea Mar 9, 2022 US Senators introduce bill to ban US imports of Russian uranium Mar 17 2022 US Seeks $4.3 Billion for Uranium to Wean Off Russia Supply Jun 7, 2022 UEC to double resources through UEX acquisition Jun 14, 2022 MEPs on two committees vote against EU taxonomy delegated act Jun 14, 2022 Cross-party alliance seeks to block nuclear and gas from EU’s green taxonomy Jun 14, 2022 IEA warns Europe to prepare for total shutdown of Russian gas exports Jun 22, 2022 Canada / Regulator Grants Additional 10 Years For Point Lepreau Nuclear Plant Jun 23, 2022 Perspective: Why Nuclear Power is Good for Public Health Jun 23, 2022 Japan heat wave: PM calls for 'maximum' nuclear power use Jun 29, 2022 BMO Lifts Long Term Uranium Price Outlook To $58 Per Pound Jun 28, 2022 EU parliament backs labelling gas and nuclear investments as green Jul 6, 2022 Amid Global Crises, Nuclear Power Provides Energy Security with Increased Electricity Generation in 2021 Jul 14, 2022 NRC To Issue Rule Certifying NuScale Small Modular Reactor Jul 29, 2022 Ukraine war: IAEA says Zaporizhzhia nuclear plant out of control Aug 3, 2022 Chinese molten-salt reactor cleared for start up Aug 9, 2022 Threats of Blackouts Drive Japan to Embrace Nuclear Again Aug 23, 2022 California lawmakers vote to extend Diablo Canyon nuclear plant operations as state battles energy emergency Sep 1, 2022 Cameco, Brookfield Renewable Partners to Buy Westinghouse Electric for $7.88 Billion Oct 11, 2022 Denison Announces History-Making Recovery of Uranium Bearing Solution from Phoenix ISR Feasibility Field Test Oct 17, 2022 Wind farm in Germany is being dismantled to expand coal mine Oct 25, 2022 GoviEx Announces Positive Results from Completed Falea Copper-Silver-Uranium Exploration Program Oct 31, 2022 Cameco Signs Uranium Supply Agreement with China Nuclear International Corporation Nov 7, 2022 Canada proposes tax credits for SMRs Nov 11, 2022 Biden gives PG&E $1 billion to keep the Diablo Canyon nuclear plant open Nov 21, 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 France to pay up to €500m for falling short of renewable energy targets Nov 25, 2022 Small nuclear power plants to replace gas in quest for net zero Nov 26, 2022 Uniper's Irsching 3 power plant temporarily returns to the market next year Nov 29, 2022 Canada / Port Authority Announces Plans For ARC-100 SMR At New Brunswick Green Energy Hub Dec 1, 2022 Ford marks start of construction on Canada's first grid-scale nuclear reactor Dec 2, 2022 Energy Fuels (UUUU) Gets $18.5M Government Uranium Contract Dec 19, 2022 Uranium Energy Corp Wins Award from the U.S. Department of Energy to Supply 300,000 lbs. U3O8 at $59.50/lb. to the Strategic Uranium Reserve Dec 20, 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 “The nuclear Industry bought/contracted 110 milion lbs U308 in 2022. Cameco sold 77M lbs of thoose. Our pipeline of negotiations have not shrunk. 2023 are gonna be a good year.” Jan 20, 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 EU Commission scratches Russia nuclear sanctions plans Feb 16, 2023 Officials: No injuries, release of radioactivity after uranium fire at Y-12 in Oak Ridge Feb 22, 2023 Dow and X-energy to build U.S. Gulf Coast nuclear demonstration plant Mar 1, 2023 EU rewrites climate diplomacy deal to resolve nuclear sticking point Mar 6, 2023 JOINT STATEMENT BETWEEN THE DEPARTMENT OF ENERGY OF THE UNITED STATES OF AMERICA AND THE DEPARTMENT OF NATURAL RESOURCES OF CANADA ON NUCLEAR ENERGY COOPERATION Mar 27, 2023 Michigan could provide $300m to reopen nuclear power plant Apr 17, 2023 Word on the Nuclear Street: Demand, Demand, Demand May 23, 2023 Namibia Considers Taking Stakes in Mining and Petroleum Companies May 29, 2023 Windhoek ‘has no plans’ to take stakes in existing gas or mineral licences, government tells African Energy May 31, 2023 U.S. Department of Energy to Acquire High-Assay Low-Enriched Uranium Material Jun 5, 2023 New nuclear reactors coming to Bruce County Jul 5, 2023 Opinion: It would be foolish not to refurbish Pickering nuclear plant Jul 10, 2023 Powering Ontario’s Growth Jul 10, 2023 The Ford government made a good call on nuclear power Jul 13, 2023 Sweden to clear obstacles for new nuclear reactors Aug 9, 2023 Hydro-Québec mulls reviving province's nuclear reactor, 10 years after shutdown Aug 10, 2023 Will Niger Troubles Squeeze Uranium Supply? Aug 29, 2023 A Huge Paradigm Shift for Uranium After the World Nuclear Symposium Sep 14, 2023 2024 New Nuclear ETF Range Nuclear Renaissance Index ETF (NYSE:$NUKZ) launches January 24, 2024

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