Hi All
Disclosure SM-BMN PEN;;IRL -PEN BOE BMN
my 2c is split between the short / medium term and LT.
firstly the ST. IMO the commodity complex has moved significnatly higher with a few notbale exceptions one being Uranium. i wont go into the arguments for base load energy usage (+) and issues with saftety etc (-), except to say both arguments have merit and deciosns will be made by various countries given their options. Uranium has been dormant for quite a while with cutbacks etc commonplace. i had never heard of Sprott before but did a bit of DD and decided they were legitimate, and what they were doing would potentially tighten the U mkt. the U market was open to a squeeze, with spot way belwo cost of replacement, marginal cost of prodn etc. long term ct to spot mix favourable.
where this settles is anyones guess. ithink it moves higher then settles. this is not an overly dynamic mkt IMO. it is slow moving. there is a possibilty of a short squeeze, and that would be a great outcome for holders as per 2007(? i think). possible- depends how much ammunition Sprott gets and how aggressive they are.
longre term i recall a conversation i had with the ceo of RIO about 10 years ago. i asked why they did not go hard into U given their involvement with ERA and in Africa. he replied that the time to get a U mine up was much shorter than a reactor. that is a negative, and the opposite of many other commodiites. so LT investing in U is proabbaly not a good idea and now is the intersting period.
i have no idea where the shares will go and view them as trading stocks, not investing
sorry cant be of much more help
Attempting to collect together a bunch of information on Uranium in one place, and add my own thoughts on top. Hopefully will be useful to people. I'm not an expert in this area and most of this information has come from secondary sources.
So the U3O8 (Uranium Oxide) spot price has been heading to the moon since early August, trading above 40 USD / lb for the first time since mid 2013. The long term (25 year) price charts (code UXA) are pretty interesting.
Key historical movements / events:
Uranium has been on the nose for the best part of a decade due to (I think) a combination of the Fukushima disaster, a fairly narrow focus on solar and wind power, and that nuclear power isn't considered entirely "green".
There are a significant number of currently operating nuclear power stations which require ongoing supply of U3O8. Their supply contracts are typically quite long term and lock prices in for the duration, so supply and demand takes a while to filter through to the spot price. In fact there has been a supply / demand imbalance for an extended period (years) now, with more U3O8 being consumed than being dug up.
At prices under 40 USD / lb it is basically not economical to mine it anywhere, so miners need to lock in offtakes at much higher prices in order to start digging anything up. Uranium miners seem to be a bit different to other resource companies, in that their "play" is to identify a body of ore and basically sit on it long term until the spot price gets to a point where it becomes economical to mine. As it looks like this might happen in the next year or so, the share prices on a bunch of uranium stocks have seen significant runs in the last week or two.
So the question is, what happens now?
My view for a while has been that the "pure" renewables plus battery storage aren't an effective way of providing baseload power in the transition away from fossil fuels, and that nuclear is one of the only other options. However I haven't acted on this as I haven't seen much evidence that nuclear is a palatable option politically. Also, we're only ever one Fukushima style disaster away from a decade-long pivot away from nuclear, so there is significant macro risk investing in this sector.
Interested to hear others' thoughts on the matter. Now that it's started to run I feel like I've missed the boat and don't want to succumb to FOMO, but at the same time the investment cycles are much longer for uranium than other commodities and the bulls seem to think there is plenty more room for it to run - particularly as we're only just at the threshold price for production to become economical again.
NYSE: UUUU
Energy Fuels Inc is based in Lakewood, Colorado, is the USA largest producer of uranium and the leading conventional producer of vanadium, both designated by the U.S. government as critical minerals. Energy Fuels is also making progress entering the rare earth element production business.
I'm just flagging a non-ASX Uranium play which sounds promising - diversified for uranium and rare earths play, plus looking at medical opportunities!
Uranium Investments
I read a Straw by PaullyD under Paladin which actually is on the broader topic of Uranium Investments. His analysis is first class, and I too believe it should be within its own Forum Straw, so that he and others can open up the discussion (PaullyD, you're not alone in not knowing how to post an attachment to a Forum topic).
It would be great if someone can post PaullyD's attachment to this forum topic please. (And by the way I'm neutral on the topic Uranium and certainly don't want to steal PaullyD's thunder on Uranium as a topic, but I could be interested - I don't want PaullyD's analysis get lost within the more specific Paladin commentary).