1/ Some quick takeaways from this morning's @NAC_Kazatomprom management call with new CEO Mr. Mazhit Sharipov. Note that due to the Russian to English translation, some of the transcript is choppy.
2/ First, the Sharipov opens by clearly stating that their strategy of value over volume will not change and cuts will continue as planned. They are also seeing supply chain impacts to their production and cost base. Also seeing tightening supply and increased customer interest.
3/ While not many details were disclosed on today's China term contract news, they remain comfortable with market related pricing today (i.e., remain bullish price). Will consider hybrid fixed / market contracts in future but need higher prices to make them comfortable
4/ Re: Anu physical fund - opportunity driven by investor interest outside the U.S. and Europe. Listing and buying strategy will be driven by manager - they are a passive investor. Storage will begin at existing converters (so doesn't seem connected to Alashankou at this stage)
5/ In response to repeated questions on bringing production back faster, management is clear that the ship has already sailed from a budgeting and operations standpoint. Currently focused on opportunities 2024+ and no decision made on that production yet.
6/ No plans to increase free float above 25%. Government views their investment as a strategic asset of the state. Does seem like they have worked on a western listing but are balancing cost and operational complexity of quarterly reporting. Seems like this is a work in progress.
7/ Overall a solid call from the new management team - continue to stay disciplined, focus on customers and execution. They understand supply and demand and remain leveraged to a improving market. They have a good handle on the macro and are focused on investor value creation.
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Jason Murphy from @ConstellationEG giving a great talk on the company’s #nuclear fleet - very impressive stats all around. Emphasized that the company intends to pursue life extensions to 80 years for the whole fleet. Also- contracting strategy starts 6 years before any reload!
Favorite quote of the day so far: “we don’t live in the spot market like some others do. I’m not sure how those guys sleep at night”… long term contracts with reliable partners is the name of the game. Also strategic inventories are clearly important for a fleet of their size.
1/ Lots of folks asking about @NAC_Kazatomprom $KAP today given it's relative underperformance vs. the broader #uranium sector - a few short thoughts.
2/ First, today's sharp drop and brief halt was triggered by a shift in GDR treatment by a number of major western banks. Goldman Sachs told us they could no longer accept London GDR orders due to uncertainty with respect to ongoing settlement of Clearstream and Euroclear.
3/ Several other banks told us the same. It was triggered b/c many Russian GDR orders were at risk of not clearing due to market closure in Russia. Despite $KAP not trading in Russia, it (& many other London GDRs) were suddenly prohibited from trading in cash (swaps unwind only)
Just touched down in Savannah, GA for the @NEI International #Uranium Fuel Seminar, the #nuclear industry’s first in person conference in almost two years. Should be an interesting few days… stay tuned for updates!
Pretty direct messaging from Kazatomprom $KAP to kick things off. Major focus on security of supply and the need for committed long term contracts to drive #uranium production decisions.
$CCJ follows with a similar theme - where are the pounds going to come from? Talking about long term market health, incentive structures, risk adjusting future supply assumptions and issues with prod cost comparisons. Know @FootnotesFirst is going to like the title…
1/ Some brief thoughts on $SPUT / $U-U and why it trading lower on today's open is a good thing for #uranium -- Yesterday's daily update showed that #Sprott did not purchase material or issue units.
2/ This confounded some investors, given the close to 30% premium of the vehicle...
There is a simple explanation: While updating an ATM, it is common to have limitations on market activities.
3/ While the new base shelf prospectus hit Friday, the company did not file an updated sales agreement and confirm the ATM until post close yesterday (see attached).
2/ Given the scale and cost structure of Arrow, it makes sense that investors are intensely focused on its delivery timeline. This thread will discuss possible timelines, current market expectations (i.e., what’s “priced in”) & how different Arrow scenarios will impact the mkt.
3/ As you can see from the litany of responses to Michael’s tweet, there is great skepticism in the market regarding Arrow’s timeline. This is largely due to a bearish narrative conveyed by competing CEO’s whose assets only hold value if Arrow is substantially delayed.
My tweet regarding the $EU last night clearly rubbed some people the wrong way. While not entirely unexpected, I thought I would explain our motivations for tweeting on the topic and clarify a few points. A long thread:
As I noted in several responses to my initial Encore tweet, the goal was not to attack management. While we do not have much of a relationship with Bill, we like and respect Paul and have known him for years.
The purpose of the tweet was to call out some of the overly promotional twitter accounts which were clearly pumping an illiquid, low float stock into retail hands at valuations that (to us) were absurd relative to other names in the sector.