Uranium Bull Market

HillCloudHop · 06-05-2021 9:06am #1

Lots of institutional money flowing into the uranium sector at the moment. Uranium equities have had a great run since end of last year, but prices are still far off the 2007 bull market peak.

Spot price of physical uranium has been suppressed for many years. Price will have to increase to make production profitable again. Growing support for nuclear energy to combat climate change. All the DD I've read is pointing to another bull market.

Anyone here invested?

RainInSummer · 06-05-2021 9:40am

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.

HillCloudHop · 06-05-2021 10:28am

RainInSummer wrote: »

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.

The uranium market is small and illiquid, but I really doubt a few boards members are capable of pumping it, unless we've got some billionaires lurking here.

Will be interesting to see when does this market peak. I'm also invested, but only since last month. I plan to take some profit once the spot price hits $50-60/lb. Hard to predict when it will peak.

RainInSummer · 06-05-2021 12:20pm

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).

Green Penguin · 06-05-2021 11:04pm

What vehicle have ye invested through, YCA In UK or one of the actual miners?

HillCloudHop · 06-05-2021 11:20pm

Green Penguin wrote: »

What vehicle have ye invested through, YCA In UK or one of the actual miners?

I'm investing into various miners/developers/explorers. You've got the big establishedproducers (Kazatomprom and Cameco) along with more speculative companies like Dennison and NexGen Energy.
YCA is a good way to get direct exposure to the uranium price whilst being less volatile.

Rick Rule, a veteran commodities investor who made a fortune in the last bull market, has frequent interviews on YT. I found this one, albeit a few months old now, gives a good overview of the main players.

RainInSummer · 07-05-2021 12:19am

Green Penguin wrote: »

What vehicle have ye invested through, YCA In UK or one of the actual miners?

Yup, miners are where it's at in terms of this one. By far the biggest leverage to any move in the price of uranium.
Front load the fuel cycle and have done with it.

A safer way than the miners would be to pick an ETF if they are available to you. URNM is the best of them as a pure play uranium pick, failing that HURA or URA.

You also have Sprott, who have recently acquired Uranium Participation Corp (UPC) and will rebadge them to the Sprott Physical Uranium Trust come the end of Q2 this year. They'll be on both the Toronto and NY exchanges and should provide good upside as well.

I don't have any the ETFs available to me so I'm in individual companies.
There's only about 50 U mining companies still knocking about after the ten year mauling they got post Fukushima so it's not overly hard to get a feeling for who's spoofing and who's actually trying to get into production.

Green Penguin · 07-05-2021 8:45pm

Thanks for that info, good starting point.
In terms of researching a bit on the miners side of things any recommendations on good websites/analysts etc who are worth reading of any other resources to try and get a feel for whose who in the space?

RainInSummer · 07-05-2021 10:25pm

Green Penguin wrote: »

Thanks for that info, good starting point.
In terms of researching a bit on the miners side of things any recommendations on good websites/analysts etc who are worth reading of any other resources to try and get a feel for whose who in the space?

Look up Mike Alkin being interviewed on YouTube. He heads up Sachem Cove Partners and is well worth listening to. I think there's a video from a year ago where he outlines the bull case very well. I know you might be thinking that's too old but absorb that and then chase the rest of these guys, you'll see that there has been nothing but positive catalysts since then.

Rick Rule, (posted above) is a bit of a legend in the uranium space and in mining in general. His tales of his Paladin investment are envy inducing.

Justin Huhn of uraniuminsider is also good. He does a paid newsletter. Too rich for my blood though.

Any of those guys are worth checking.
If Twitter is more your bag then John Quakes or Yellowbull11 are where it's at.

Quick edit: to answer your question more directly Rick Rule provides ratings on miners. He is tremendously knowledgeable, but you have to filter what he says too. After all he's just stepped down as the CEO of Sprott and is in it up to his eyes.
Justin Huhn also provides recommendations but they are kept to his paying customers, his favourite that he hints at is either Baselode or Encore Energy.

RainInSummer · 11-06-2021 1:35pm

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.

RainInSummer · 14-06-2021 5:50pm

Oh and just to balance things out there's been reports of an incident in China.

https://www.bbc.com/news/world-asia-china-57474384

Share prices have dropped in the sector as a result.

HillCloudHop · 01-07-2021 9:37pm

One of the world's largest operational uranium mining sites, Cigar Lake in Canada, is in danger due to a wildfire. The mine may flood if the equipment on the surface is damaged. Could be a catalyst for the spot price to take off.

HillCloudHop · 01-07-2021 10:29pm

https://firms.modaps.eosdis.nasa.gov/map/#t:adv;d:2021-06-30..2021-07-01;l:noaa20-viirs,viirs,modis_t,country-outline;@-104.5,58.1,14z

RainInSummer · 18-07-2021 7:35pm

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!

RainInSummer · 17-08-2021 8:36pm

Quick update. Sprott's ATM is now active as of today.

Not that's it's helped prices much. The sector saw some brief respite before continuing it's slide.

My two largest holdings are down to +60% each. Not a bad complaint but I miss the heady days of having three two baggers out of five.

In terms of the near future, the summer is a traditional holiday time for fuel buyers and utilities so no real action recently, but the WNA symposium in September is often the herald of new contacting cycles by the utilities.

If anyone is considering getting in on this now is a good time to open a position.

Best of luck!

RainInSummer · 23-08-2021 9:20am

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.

kellyj77 · 28-08-2021 9:27am

This is a market I've been reading, watching and dca'ing into for about a year. Very excited about it. Fantastic and very detailed threads on reddit about it. Was always surprised there wasn't as much/any coverage on it in here

RainInSummer · 28-08-2021 11:43am

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!

kellyj77 · 28-08-2021 10:41pm

I assume you're following all uranium folk on twitter? @yellowbull11 is very insightful. @quakes99 is another.

RainInSummer · 30-08-2021 1:54pm

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.

RainInSummer · 01-09-2021 10:52am

Above graph is spot price of U3O8 (yellow cake), with the red arrow indicating when Sprotts's ATM became active. They've clearly had a huge effect and have driven the price to a five year high.

Just a note on the spot price, it tends to be fixated on as it's the only publicly available figure in an opaque market. The spot market accounts for only 20-25% of yellow cake traded, the vast majority is in long term (LT or just 'term') contracts. These are never revealed and are struck between the utility companies and miners. Mines are opened or put in to care and maintenance on the term price. Where spot price proves useful is as a yard stick in measuring how many Lbs of yellow cake there are available for utilities to buy up without having to enter in to term contracts with miners. It's also useful in perhaps providing confidence to retail traders.

And finally, the equities have started to run, we've seen several healthy days on the trot with most companies grabbing back some, if not all of the losses they experienced over the past two or so months.

Onwards and upwards, ad astra per aspera!

kellyj77 · 02-09-2021 11:11pm

Another extremely strong day. Is it finally taking off? Ill keep dca'ing unless it goes parabolic. Whispers that it's starting to attract the attention of the reddit groups. Not sure if that's good or bad.

RainInSummer · 03-09-2021 1:01pm

Yeah it's been a crazy week. I have four positions on the ASX, all posted double digit per cent gains three days running. Up 50% in a few days on some positions!

Pre market in the US looks good (even though we can't rule out traditional long weekend profit taking) and of course Canada doesn't do pre-market.

The Sprott effect in full swing? The $300m they raised for their initial ATM will be burned up soon at the rate they are buying all round them, but get this they're going for $500m next time and expect to take 3 days to get that before they are back buying with renewed vigour.

In terms of it taking off my own personal feeling is that it will never go genuinely parabolic, rather go up in steps, then pullback, then run up higher again. Long winded way of saying I'm not sure :)

kellyj77 · 03-09-2021 9:38pm

Spot closes at $39. Up 6.5% today alone and highest since March 2015. Crazy week.

kellyj77 · 03-09-2021 9:40pm

Not sure if allowed so mods feel free to delete if not, but came across this post early which is a good summary. Very high level but touches on most points of the hypothesis. Way more detail out there. https://www.reddit.com/r/wallstreetbets/comments/pg2pdy/uranium_start_of_a_commodity_supercycle/?utm_medium=android_app&utm_source=share

RainInSummer · 04-09-2021 7:35am

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!

kellyj77 · 04-09-2021 12:52pm

Can we invest in urnm in Ireland? Tried looking before on degiro and never found. I've been in a wide spread for a while. Dnn, dml, uuuu, nxe, fcu, ccj, Dyl. I think that's it

RainInSummer · 04-09-2021 3:14pm

Just tried a buy order on IBKR.

No dice.

I'm in:

Bannerman

Denison

Energy Fuels

Baselode

Peninsula

Vimy

UEX

kellyj77 · 05-09-2021 8:41am

I'm conflicted as to whether I should keep investing each pay day, drop a large amount in this week or just sit back and let what I have in there ride.

Previously I expected the prices to rise over say 2+ years and there would be plenty of time to get cash in. However the rate at which sprott is gobbling up uranium coupled with WSB getting interested I think the time frame may be alot shorter.

RainInSummer · 05-09-2021 9:58am

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.

RainInSummer · 07-09-2021 10:09am

Just to re-iterate the point about there being no one single parabolic move, here's a screen cap of Energy Fuels, (UUUU) from the last bull run. It's a great example of the stomach churning volatility of the sector as well as the bananas gains you can make.

They are my current favourites and largest holding in terms of €€€. They now also have a REE element to their business which in my eyes makes them even more attractive again.

Uranium Bull Market

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