Uranium Bull Market

I'm since last Oct. Very happy thus far.

Adding monthly and eyeing a 3 to 5 year time frame for exit.

I've stuck in a few hundred hours reading on the sector in general at this stage.

Quick edit: Just in case you think I am shilling/pumping, I am in no way connected to the above user. I am happy to answer any questions on the uranium sector in general. Also happy to show mods any proof they need.

Thats the thing though, it's exactly because small and illiquid that a concerted effort could easily swing a stock. I concede it would take more of a Reddit style push though than a relatively quiet forum.

The entire sector only has a market cap of about 20-25bn, when you think Dogecoin hit $85bn yesterday it makes me put my head in my hands. One is a metal that provides 10% of the world's power and the other was a joke that got out of hand (all credit to those making money off it).

Just an update on this.

Several things of note have happened lately.

Yellowcake (YCA) voted yesterday to issue more shares to allow the purchase of approximately $100m in physical Uranium.

In the same vein Anchorage, the hedge fund behind the MGM/Amazon deal have also announced that they have purchased approx 3m lbs of U3O8.

I think both of these are an attempt to front run Sprott who will be entering the market in July on the TSX and probably September on the NYSE.
Sprott will bring at the market, fast delivery purchasing of uranium for the first time in history.

Positive news indeed, particularly the Sprott one, that could be a real game changer. Utilities were purchasing from the spot market to keep inventories at mandated levels as it was cheap. Sprott can soak up a market with already thin supply overnight.

Other junior miners have also gotten in on the act and have purchased various amounts over the past couple of months, either to fulfill contracts or in the hope of selling on later at a higher price to fund development of their assets.

Notably Denison's order of 2.5m lbs of U3O8 took 17 separate transactions to fill. A sign that supply is not as plentiful as it could be.

Hope it helps.

So the sector has taken an absolute mauling the past month. An overblown news story about a xenon leak in a Chinese reactor seems to have kicked off an initial sell off that the sector never really recovered from (yet).

In terms of positive developments going into the future, Sprott's physical uranium trust should be dual listing tomorrow on the TSX in both Canadian and US dollars. U.U and U.UN.

This should bring an at the market, quick delivery uranium purchaser into an already supply constrained sector for the first time ever.

However, just to complicate things both the URA and HURA ETFs will be selling off their U.U holdings as the index they track won't have U.U on their books just yet. This is a timing thing more than anything else and will see any sales of Sprott units be balanced by purchases of the other uranium companies the ETFs hold as proceeds are transferred from one to the others.

The pick of the ETFs, URNM, is not selling and redistributing. They are holding their U.U

I'm still strongly convinced that the sector will be the star performer of this decade and I have to take this month's pain in the context that the stand out company in the last Uranium bull run saw seven pull backs averaging 40% before eventually posting gains of 104,000%.

I don't think that will happen again, but I do hope that among the speculative pickes I have I'll see a few multi baggers.

Enjoy the weather!

Apologies if this photo is for ants but posting on mobile. Sprott's ATM has had an immediate effect on the spot market, bringing the price up over 8% to a yearly high within 3 days of operating.

Good stuff. Looking forward to the next few years I can tell you.

Win, lose or draw it'll be fun. Predicting and hoping for big win mind you!

No. I don't do Twitter or any social media for that matter.

I'm aware of John Quakes though. I wholly think that 'he' is the product of a media team. Either that or he's on amphetamines. The account posts near 24/7. It's a phenomenal resource but it has to be a result of a team effort.

That said I check in on it every few days but as I don't have an account I have a fairly limited view of Twitter conversations.

He's edited that post to include URNM, which he didn't have previously. He hadn't heard of it. Seeing as it's the best pure play U ETF out there that was a bit weird. Have to give him the benefit of the doubt though, it might not be available in his country.

There's also a few inaccuracies in the post, but the sentiment is overall correct.

Invest in miners. Front load the fuel cycle!

Just tried a buy order on IBKR.

No dice.

I'm in:

Bannerman

Denison

Energy Fuels

Baselode

Peninsula

Vimy

UEX

It's what I was doing. DCA'ing up or down depending on the month at or near each pay day.

I'm holding a small bit in cash and want to try build that up a bit each month instead of doing any more buying. I'm one of the people who subscribe to the idea that there will be a correction in either Q4 this year or Q1 next year. So, yep, I'm dumb enough to try time the market.

Here's the rub, buy in now and maybe see the equities run hard for a period. Or do what I'm planning, hold and build a cash position for some event that may or may not come, and even if it does come, will it correct to the extent that you'd be buying at a discount to today's prices? Super hard one to call.

Had to cool off eventually. The thesis is still as solid as ever though. Actually more so if I think about it!

I bought Aura Energy today. Upcoming inclusion in ETFs and (hopefully) relisting on the ASX should cause a nice little run on them.

Nuclear power companies are facing competition for supplies of uranium from financial investors, who are betting on sharply higher prices and demand for the radioactive material used to fuel reactors.

The price of raw uranium, known as yellowcake, has risen to its highest level since 2014, driven by a newly launched investment trust run by Canadian asset manager Sprott.

Investors are betting that nuclear power will be a key part of the move away from fossil fuels and that a lack of new uranium mines will mean the price has to move higher.

The Sprott Physical Uranium Trust has snapped up around 6m pounds of physical uranium, worth around $240m, since launching on July 19, helping to push uranium prices to over $40 per pound, up from $30 at the start of the year. Global mine supply is expected to be around 125m pounds in 2021.

Its aggressive buying will put pressure on utilities who need to secure supplies of the commodity for electricity generation. It also comes as China is planning a big increase to its nuclear power capacity over the next decade. Added to the holdings of a fund it acquired, Sprott currently holds 24m pounds of uranium, worth around $1bn, in the form of yellowcake.

Other financial players have also been buying the commodity in a bet that its price will rise. Yellow Cake Plc, a vehicle listed in London in 2018, holds around 16m pounds of uranium.

“This has been a key driver of the 30 per cent increase in the price of the metal in 2021,” Nick Lawson, chief executive at brokerage Ocean Wall, said.

Demand for uranium is expected to climb from around 162m pounds this year to 206m pounds in 2030 — and even further to 292m pounds in 2040 — according to the World Nuclear Association, largely driven by increased power generation in China as Beijing seeks to cut emissions.

At the same time, the supply of uranium is set to fall 15 per cent by 2025 and by 50 per cent by 2030 due to a lack of investment in new mines.

“Financial players are clearly accelerating price discovery, but this would not be occurring if there was not a fundamental and substantial deficit,” analysts at Canaccord Genuity said.

The pandemic has also disrupted supply from some of the largest mining operations in Canada and Kazakhstan. In December, Canada’s Cameco temporarily suspended production at its Cigar Lake mine due to a shortage of workers, before restarting it in April.

“This is against a backdrop of growing energy demand as the economy recovery and a focus on carbon free generation with nuclear being a key element of non-fossil fuel baseload generation,” said Jonathan Guy, analyst at Berenberg.

Shares in Cameco have risen by 70 per cent year-to-date on the Toronto Stock Exchange. Overnight, shares in Japanese utility companies rose sharply after Fumio Kishida, a leading contender to become the country’s next prime minister, said restarting nuclear power plants was necessary to achieve the country’s net zero goals. Nuclear power was shut down in Japan after the Fukushima Daiichi disaster in 2011 and has only slowly been restored.

Last month, the Sprott fund announced it would issue $300m worth of new shares, which would be backed by new purchases of physical uranium.

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Currently listed on the Toronto Stock Exchange, the Sprott uranium trust is also looking to list on the New York Stock Exchange next year, which could spur further purchases, according to Canaccord.

The Sprott trust buys uranium through WMC Energy, which stores it in Canada, the US, and France. Sprott receives a management fee of 0.35 per cent, as well as a commission of 1 per cent on the gross value or any purchases or sales of uranium.

If investors keep buying uranium, analysts expect utility companies will come under pressure to replace long-term supply agreements before they expire.

At the moment, long-term contracts cover 98 per cent of the uranium needed by US utility companies. But that figure drops to 84 per cent next year, and 55 per cent by 2025, according to Yellow Cake.

“There are now no meaningful volumes available,” said Nick Clarke, founder at Curzon Uranium. “Utilities will be forced to re-evaluate their procurement strategies.”