Sprott Asset Management Enters Into Agreement With Uranium Participation Corporation to Form the Sprott Physical Uranium Trust - This is a MASSIVE deal for the industry and had already lit a fire under most Uranium stocks. Is this the straw that broke the camel's back!? I think so... What this space, we are just getting started and near-term producers will get one of the biggest re-rates as utilities start to recontact all at once. 2021 is shaping up to be very interesting.

So reading below from their announcement. 

TORONTO, April 28, 2021 (GLOBE NEWSWIRE) -- Sprott Inc. (“Sprott”) (NYSE/TSX: SII) announced today that Sprott Asset Management LP (“Sprott Asset Management”), a wholly-owned subsidiary of Sprott has entered into a definitive agreement with Uranium Participation Corporation (“UPC”) (TSX: U) pursuant to which UPC shareholders will become unitholders of the Sprott Physical Uranium Trust (the “Trust”), a newly-formed entity managed by Sprott Asset Management.

UPC is the world’s largest publicly traded investment vehicle providing investors an opportunity to gain exposure to the price of uranium, outside of a traditional mining company, through holdings of physical uranium in the form of uranium oxide in concentrates ("U3O8") and uranium hexafluoride ("UF6"). At the end of March 2021, UPC reported holding 16,269,658 pounds U3O8 and 300,000 KgU as UF6, with a then market value of approximately C$665 million.

“Sprott Asset Management currently manages four physical commodity funds with approximately US$12 billion in assets under management,” said John Ciampaglia, CEO of Sprott Asset Management. “We believe our global brand, fund marketing experience, and client base of more than 200,000 investors will improve trading liquidity and grow UPC’s asset base during what we believe is the start of a bull market for physical uranium.”

“All current Sprott Physical Trusts are listed on both the Toronto Stock Exchange and the NYSE Arca and, upon completion of this transaction, one of our primary objectives is to seek a dual listing for the Trust, in order to increase its profile with U.S. and international investors. We are also pleased to announce that WMC Energy will act as Technical Advisor to assist us in the management of the Trust,” added Mr. Ciampaglia.

“This transaction is important to Sprott as it demonstrates the significant value that we can bring to our shareholders and clients in managing mineral commodities in areas adjacent to our traditional precious metal expertise,” added Peter Grosskopf, CEO of Sprott. 

Disclosure: I own shares in BOE and many other Uranium mining stocks globally 

Uranium Mining Companies BUY on the Spot Market

• This week in #uranium saw some pretty big new with $YCA (Yellow Cake) buying 3M lbs, $DNN (Dennison Mines) buying 2.5M lbs $UEC (Uranium Energy Corp) buying 800k lbs. 
• $DNN - This is the first time a non producing (exploration/developing) company raises money and buys on the spot market. 
• $CCJ (Cameco) and $KAP (Kazataptom) - that supply 60% of the worlds mined uranium have both stated they will more than likely need to buy on the spot. 

Uranium Supply Deficit 

• CAPEX is down 75% since 2013. Cameco down 90% and Kzataptom down 60%. 2 largest companies in the world are not exploring or bringing on new mines. 
• Utilities are complacent that there is plenty of uranium to go around
• It can take 10+ years to drill, permit and build a mine with most never getting off the ground due to the public image of uranium and environmentalist
• See photo attached

COVID-19 Effects 

• $CCJ still is not producing any pounds at the moment due to their mines being offline. They won't be turning them back online until they know Covid is totally under control in Northern Saskatchewan, Canada. 
• $KAP is still yet to really know how bad their production numbers will be after temporary stopping/reducing their ISR (in-situ recovery) mines due to Covid last year. ISR mines take time to see the effect and we will see how much damage has been done as the year goes on. 

http://articles.cruxinvestor.com/elon-musk-evs-will-double-electrical-demand-impact-on-uranium 

Nuclear vital to feed the electricity demands of the future clean EV revolution 

Whilst viewed as a scary source of energy, it is widley misunderstood due to a few freak accidents that have occured over the last 60 years. 

That said, it becoming safer and safer as further regulations and build quality improve.

"Global nuclear energy is on the rise. Uranium must fuel these nuclear reactors, but the resource is below the cost of production and supply is now severed. As a result, supply is shuttering quickly and nuclear fuel demand is rising" (Smith street weekly).

“The consequence of that, if you have 6 billion dollars invested in a reactor and you’re burning a million pounds of fuel a year, the difference to you between spending 30 million dollars on yellowcake and 60 million dollars on yellowcake is entirely irrelevant. It’s the 6 billion dollars that you have invested in the plant that matters. What that means in the case of uranium given that it sells for $24 and it costs $60 is that the price of uranium must go up and because there is so little demand elasticity, the price of uranium can go up. The price is something that must go up and can go up almost certainly will go up. I just can’t tell you when.” - Rick Rule, Sprott U.S. Holdings, 15 MAR 2017 

Uranium and Covid 19

Spot price has moved from $24 to $34 usd per pound u308 in the last 2 months.

Massive supply destruction has occurred due to Covid-19. Cameco and Kazatomprom, the 2 worlds largest Uranium miners have reduced or completely stopped their mining operations. They are buying in the spot market fill their contracts. The market is already running at a supply deficit and this has just exaggerated it. I expect USA utilities to start recontracting in 2021 which is put a rocket under the sport price and thus BOE.