Some thoughts on #uranium stock performance in the bull market of "2021 to ?".

At the end of 2020 the spot price of uranium was $30/lb. Fast forward to today and it is $78. A rise of 2.6x. As beneficiaries of ⬆️ prices, you would expect the miners to exceed this result.

A 🧵/1 In 2020, with the onset of covid restrictions, the stock market, and your favorite u stocks all took a massive dive. It was only until later that fall that prices started to significantly rise, leading to the start of this thread. That year the spot price closed at $30/lb. /2

A summary 🧵on #uranium stocks to start your day.

It has been a great run since the lows of 2020. But we are still very early.

The market value of publicly listed miners is in the area of $50 Billion US. In 2007, at the peak, this was $130 Billion.
/1 To date the only miners able to generate cash flows are the large miners, and soon to be followed by those on Care & Maintenance. But the world is so short on the amount of #uranium that is required!

I don't think there is a sufficient appreciation of what that means./2

A few points about #Niger and what it means to #uranium that I do not see being mentioned. This is just an observation of some simple facts. In terms of what ultimately happens with the coup, I have no idea./1 Let's have a look at Niger's finances. According to their 2023 budget receipts, taxation comprised 45.6% while external resources, mainly foreign aid and debt borrowing, 54.4%. That is a problem, as foreign aid has mostly stopped and debt issues have been canceled./2

Why the world's largest #uranium miner needs much higher uranium spot prices?

A long thread...bear with me🙏/1 Kazatomprom $KAP went public in November 2018. It is the largest #uranium miner with about 45% (2021) of world production. The company is very profitable and earns significant cash flow.
It is also a beneficiary of a rising uranium price and a falling local currency. /2

Mostly going unnoticed, Urenco released their 2022 annual report. As one of the largest enrichers, there are some very significant implications to #uranium in this report as we go through 2023. A🧵

/1

https://twitter.com/urencoglobal/status/1633825209928261632?s=20

Urenco saw a largest increase in their order book of 24%. Capital spending only slightly increased. That said, they are not standing still with plans for increasing capacity (explained later). /2

2022 was a good year for new #nuclear reactors as the grid saw a net increase of 4089 MWe to the worldwide fleet (source PRIS).

By comparison, the last time there was a large increase was in 2018, when China connected 7 reactors.

Let's see what this means for #uranium./1 Three significant factors I believe have changed for the good, which will maintain this trend for #nuclear reactors in 2023 and onwards.
1-Embracement of nuclear as a solution to climate issues and energy security
2-Covid's impact coming to an end
3-Supply chain/Disruptions
/2

I am a fan of history. There is a lot to learn from it.

If the price pattern followed by spot prices is consistent, we may finally see a significant move up in the spot price of #uranium in 2023. 🧵/1 There are 3 spot prices that play a key role; conversion, enrichment and, of course, uranium. The price of all three typically move in the same direction, but not simultaneously. The sequence in prices between the last bull market and this one appears so far to be consistent./2

PetroTal #PTAL $TAL.V
While the company continues to grow its cash and profits, shareholders have seen their shares remain flat.

Within the next few months that could change and we may see the shares re-rated much higher. Let me explain./1 At the end of September PetroTal had $93 million cash on hand. With the news this week that Petroperu is to receive $1 billion++ US in funds, their ability to shortly pay the $64 million noted by PetroTal increases significantly./2

https://twitter.com/hchris999/status/1582029669410361346?s=20&t=7GZyHyd_0Yc204GxGpUllQ

“History never repeats itself, but it does often rhyme.” - Mark Twain

A long thread on interest rates and the stock market, compared to #uranium prices and a stock.

The bull market of 2004-07 as compared to that of the current 2021-202? /1 The #uranium bull market of the mid 2000s was marked by a period of rising interest rates. Between 2004 and 2006, the Federal Reserve raised interest rates 17 times from 1.0% to 5.25% to curb inflation and cool off an overheated economy./2

Seeing #uranium stocks drop from their highs has led to a lot of angst among investors/traders/speculators/etc.

If you are more a long term investor, perhaps this brief thread may help (or not🤷). /1 In the last uranium bull market, the market value of all the miners peaked out in the spring of 2007 at around $128 billion US. The spot price also hit a high of $137/lb.

In my opinion, spot is very important to investor sentiment and the related market value of the equities./2

In April I tweeted this thread about SPUT & #uranium equities. In particular, I believe that when observing SPUT flows it can be a good indicator of whether funds will also flow into/out of the stocks, and of course, either drive prices up or down./1

https://twitter.com/hchris999/status/1519704266851729411?s=20&t=QTvOX7Nj-4bN0WIVvoMMIA

From April 8th to May 24th (31 trading days) SPUT traded at a discount every day except for 3 (a record since public). As a result, they only managed to issue 332,500 units and not coincidentally, the spot price of #uranium also dropped from $63 in mid-April to $46 in May./2

I appreciate that today was a nasty day for everyone holding shares in #uranium companies.

I am by no means a stock market prognosticator, but I thought some perspective might help.

Take the information as you wish./1 The S&P 500 is now down 16% on a YTD basis as of today. Starting in 1928 the market has been down 30 times including this year. The avg decline was 15%, and the median 12%. There were of course years with 20%+ drops (1930, 31, 37, 74, 2002 & 08)/2

The sentiment of fund flows to/from SPUT and the #uranium equities appear very much linked so far. As SPUT has turned down, so have the equities.

Recap of what happened and what is happening.

After a strong run to mid-Nov last year, equities started turning down/1 SPUT led the downturn on Nov 18th as it started to trade below NAV and continued to do so for another 12 consecutive days. There were very brief spurts of interest but for the most part the trust traded under NAV for 23 of the 30 trading days to year-end./2

I echo @quakes99 comments on this interview. It covers a lot of current geopolitical information and its impact on the #uranium market.

The interview is an hour long but here are a few snippets on really interesting stuff from Grant.🧵

https://twitter.com/quakes99/status/1509283164446871554

An unprecedented geopolitical realignment is taking place.

For utilities from North America, Western & Eastern Europe, & parts of Asia, not a question of if excluding Russian product, but when and how fast./2

1-A few observations on #uranium enrichment and the impact of any sanctions.

As noted by the WNA, there are principally 4 enrichers.

If Rosatom is taken out, the west is left with Urenco and Orano, while CNNC is not open to them. 2-The problem with enrichment from western suppliers, is the same faced by #uranium miners. As contracts have rolled off from the heady days prior to Fukushima, utilities have opted for low cost Rosatom/Russia.

Example, Urenco's US operations.👇

1-3 years ago the Trump administration concluded their findings on the section 232 petition put forward by $UUUU $EFR and $URE $URG.

I believe that much of what was written has a huge impact on the #uranium market today.

bis.doc.gov/index.php/docu… 2-We are in 2022, and Russia is at war. Sanctions are on the list but US NPPs are "vulnerable to sudden and extended disruptions in the nuclear fuel supply chain, especially product supplied through Russia and Kazakhstan."

1-I've been away but looking to catch up.

In May the EIA puts out their annual #uranium marketing report. While we wait, the US utilities have completed their annual 10K filings giving us a view of their nuclear fuel purchases. In summary, it ain't great. 2-Most US utilities publish their annual 10K in the last 10 days of February so the data is fairly recent and would include any purchase commitments signed before publishing. The data varies significantly by each utility.

1-With the markets closed today, I thought it would be a good time to write about Kazatomprom and their future impact on the #uranium market. There is a lot to unpack. So grab a coffee if you like and feel free to add to anything I may have missed. 2-In a month's time they will publish their annual results. Like any investment, with each piece of new information it either continues to affirm the #uranium thesis, or gives pause to rethink that which is believed.

As a starting point let's have a look at their gross margins

1-Back in 2004 #uranium equities saw a pretty strong rise early in the year, only to see a major drop in prices that spring that, with some of the speculative names really getting thrashed, beyond anything we've seen since November 2021 to now. 2-Here are a few examples;

Strathmore Minerals $1.09 down to $0.35
SXR Uranium One $9.70 down to $3.50, then lower.
Cameco $10.00 down to $7.30
Denison Mines $3.30 down to $1.51

1-A short thread on $CCJ $CCO Cameco's #uranium contracting news from last week. The impact of this event, and what it signals, is still understimated in my opinion. To understand what it means, we have to go way back starting with Fukushima. 2-In March 2011, the Fukushima nuclear accident led to the subsequent stoppage of many reactors in Japan, Germany, and elsewhere. At the end of 2011 Cameco was sheltered from this event as it had 290 mm lbs. in long term #uranium contracts.

1-A few thoughts on $KAP and the contribution of #uranium to the Kazakhstan government's treasury.

While $KAP has often been equated to Saudi Arabia (by default Aramco), the extent of their contribution is surprisingly not that large. 2-2020 was the last year that we have annual figures. For reporting purposes they report in Kazakhstani Tenge. As such tax expenditures in 2020 were recorded at an average rate of 413.36