Today’s #uranium thoughts.

Upc upsides their deal to $70mm and it resulted in a plus $1/lb #uranium price jump as predicted. Will end up being close to $2 from the day before to the day after when it’s done.
I’ve read some commentary from brokerages and investors now reluctantly entering the #uranium space now for the first time this cycle.

I say reluctantly because the commentary is not overly bullish yet, which is great for us long term investors.

So many have missed the boat
For many years #uranium followers have heard the bear case that resulted from the Japanese and others curtailing nuclear plants and reducing demand. But that’s now being more than offset with modern new builds that consume greater amounts per facility
During the bear years people comment on NXE fantastic mine and how it’s gonna over supply the market. True and false. Yes it’s a fantastic mine that is still several years away from start up. But, just consider...
Due to the bear market, lack of long term contracting utilities on the whole have reduced there normal inventories levels by more than 1 year. When you look ahead to when NXE might be starting up production 2025-26 if financed and everything goes well.
And assuming the words nuclear fleet wants to replenish there inventories to appropriately prudent levels the additional consumption required to do so for the industry would now take all of NXE’s production for the next 10 years.
That’s what happens when you have a 10 year bear market. People stop looking at the real facts. Arrogance and complacency flourish in the fuel buyer / utility community. Just like last cycle when CCO told us that it was impossible for the price to rise to $50/lb but 3x’ed instead
The drop in inventory that’s occurred in the last year due to covid shut ins and major mine explorations is huge. It’s the perfect squeeze set up to launch this bull market
Yes there’s some mines that can restart like $pdn who can do 6-7mln lbs a year. But it’s gonna be swallowed up by all the new facilities being built today and commissioned.

Last cycle there was a narrative in the early days that many nuclear facilities were going to be shut down
End of life. I don’t have the exact number but I think 80 percent or more of those ended up refurbishing and or extending operating licenses for another 10-20 years. Same thing is happening now as we see one after another the decision being made to extend life. And guess what?
Every single one of those facilities that extends life currently doesn’t have a long term uranium contract. Look at the amount of contracting that took place in 2005-2007. Those volumes will be eclipsed this cycle because we have major new builds and life extensions
Someone else can take these thoughts and write it up with some charts to better make my point. Sorry but all you get for free from me is a rant.

Upc ATM and NYSE is coming! Gobble gobble squeeze.

Large volumes of contracts won’t be written until the price is nearing $100/lb
It might be 6-8 months. It might be 2 years but we will see a spike to that level and then there will be a meeting of the minds between miners and fuel buyers that allow for the contracting process to commence. Fact is it can’t happen with out the price spike to that level
The mines won’t be financed without it
Final point I think every mine plan will provide to be optimistic in timing to start up. Uranium miners for the most part are going to be back of the bus to all the orders taking place in the iron ore, copper, nickel, etc today. Who knows when capacity will open up
It takes metals to make capacity to mine metals. Once the sector starts a build cycle like this everything proves to be in short supply and delayed. And much more expensive
I’ve said it before but that’s one of the reasons I love $pdn $Palaf with isn’t nearly $1bln in present values infrastructure. Just wait until cost inflation is recognized and then admissions are made by those forecasting capital costs today
They will prove to be 3x from the start as the commodity bull cycle gets to full cycle. $1bln of past sunk costs becomes $3bln of present value and for those not build and financed. $500mm of capex becomes a $1.5bln financing struggle.
Not just uranium but I’m investing in other commodities like copper with the same strategy. $srhi had probably 5-6x its market cap in sunk costs in its producing #copper mine. When the with inflation coming to the mining sector it will prove to be 10-15x its cap
For those that own juniors that have large capex forecasts already I would suggest you try plugging 2x the current capex forecast in your model. Then think about all in cost and financing dilution. Then buy $Palaf and enjoy the 52 week high that’s coming.
$pdn $PALAF has lagged simply because they completed a transformational restructuring. I’m sitting tight with it as my largest position because of that. So many of these other juniors are gonna slap us in the face time and time again due to there need to issue shares and finance
When I have trading profits I prefer to add to $ura and $urnm and basket buy the sector. Gets frustrating when you get wackamoled by premarket finances. Wish we saw more rights offerings with tradable rights. Protect the little guy.

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More from @BambroughKevin

30 Apr
Another thing to consider about the #uranium gobbling that’s about to happen when Uranium Participation Corp dual lists (TSX and adding NYSE) is that not only is the US market 13 times bigger than the Canadian market but the US Market is double what it was last cycle ($30t now)
So last cycle upc grew with its launch and its post ipo stock issuance to consume over ~25mm lbs equivalent of #uranium

Fuel buyers, miners, those in the market buying today like CCO need to ask themselves how much will it consume now?
Once listed on the NYSE it will be accessible to a market more than 25 times larger than last cycle and now with Robinhood traders that irrationally enjoy squeezing single stocks like $gme to $20b plus.
Read 22 tweets
29 Apr
Seeing as I believe the #uranium price is gonna rip shortly. I want some torque. Along with having some micro cap like $vui.v I decided to buy some $ I hadn’t looked at it much at all this cycle but was put onto it by my old buddy Matt!
$mga is an interesting little #uranium play / company as they own close to ~$90mln with of $NXE but thier market cap is only ~$70mln they have some other small investments but several interesting deposits that in all honesty I haven’t done much work on yet.
But both its cap and share price are small and it’s just nuts to see a uranium junior trading below the value of their investment in another quality senior uranium company that I also own and like.
Read 4 tweets
28 Apr
So, here is my thoughts on why today’s news of Sprott taking over management of Uranium Participation Corp will light this market on fire and ultimately help drive the price of #uranium much higher and faster than most realize.
As a bit of history, I’m the guy who actually conceived of uranium participation corp back in the mid 2000’s (over a sushi lunch) in the year leading up to that lunch I had aggressively pitched Eric Sprott on going big in uranium stocks and predicted a move from $11/lb to $140/lb
I had got the $140/lb simply as the inflation adjusted price from the 70’s uranium bull market and over that year we had bought 20% of most uranium juniors and a decent chunk of Cameco. We also invested in a few privates and helped some shell companies acquire uranium assets
Read 44 tweets
27 Apr
Today $SRHI completed its move to the TSX.V and I thought I’d share some exploration and production thoughts I’ve had as I’ve gone through the technical reports and discussed the asset with my mining contacts and why I think it’s the cheapest #copper producer and explorer around
From the technical report there is in excess of 100 occurances appear similar on their land holdings #copper #exploration #10bagger
Vale was responsible for nearly all the historical drilling and it as totally concentrated on the two deposits that were quickly discovered in the very early days of Vale’s exploration of Tres Valles. #copper #buymore
Read 38 tweets
26 Apr
Gonna be some serious FOMO in #copper as it seems certain to take out it’s all time high. These stories I’m reading about no smelter margins and tightness in concentrate leads me to think the ATH in copper will be taken out in short order. Days or weeks at most
I’m in pretty deep but fomo added to some more this morning myself.

I just keep thinking there is obviously a fundamental change occurring in the #copper market here. The EV transformational demand coming through and this is pre the infrastructure bill.
I think copper will be $8-10/lb in couple years. Will take a serious spike as well as the belief that it’s gonna stay high to curtail enough demand. I’m with @METhompson72 that demand will have to killed to with high prices to balance the copper market
Read 7 tweets
25 Apr
Wonder when we will break the all time #copper high? Getting close Image
We could easily have a break out to the all time high for #copper would love to see some follow through and this chart shows great potential for a quick squeeze to $5/lb Image
Here’s my favourite little unknown #copper play. Tiny cap, already producing, assuming its new low cost block caving underground mine comes on as planned and the copper price holds at $4/lb or the cheapest copper stock around. Cup and handle target -> $1.20-$1.30/sh Image
Read 6 tweets

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