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Didnt even flicker!
https://www.lse.co.uk/news/berenberg-raises-target-price-on-yellow-cake-187tkam4fvnptuc.html?utm_source=alerts&utm_medium=email&utm_campaign=2024-01-18&utm_term=news
The Berenberg target of 883p corresponds to NAV at a U₃O₈ spot price of ~111 $/lb .
>Time for new targets exceeding £10 in my honest opinion.
And that would be ~126 $/lb .
Even that seems a modest target.
Doesn't seem long ago (less than a couple of years) I was saying my target was $80/lb and I'd strongly considering exiting YCA around then - the way it's moved since, and the fact that all the factors that made me think it would increase to that level are still present, I'm still happily long this. And there's key new factors IMO: East vs West supply (i.e. European and US sanctions on Russian Uranium), and whereas 2 years ago the talk was of the price needing to go to $80 for new mines to open, now Kaz are saying the can't get the chemicals required which I read to mean they can't buy the chemicals at prices that enable them to mine it profitable at the current spot price.
Quite right, Berenberg just raised target, sees further upside and 14% discount to NAV as buy opportunity
All broker targets from 2023 have been exceeded. When does that happen in a stock? Most recent targets were from October 23. Time for new targets exceeding £10 in my honest opinion.
Nice to see the general market waking up to the realities of the uranium market that analysts like Mike Alkin have been preaching for years. It has been a long time coming.
Compulsory video for any new investors coming into the space: https://pracap.com/kuppy-and-mike-alkin-uranium-interview-at-the-2023-world-nuclear-association-symposium/
Long-term security of supply concerns, fanned by lingering geopolitical risks and the challenges of expanding primary production, will be the key themes to watch in 2024 and beyond.
It takes much longer to bring in a new Uranium mine that other mines so the supply side squeeze from existing suppliers is only going to become more stark.
Add the demand side growing from nations who have already committed to increasing nuclear (UK, France, Poland etc)
Last year alone, demand was around 200 million pounds and supply was about 160 million pounds...that means we're about 40 million pounds short on the supply side and that was underlined by the announcement from Kaz on Friday.
COP28 was dubbed the "nuclear COP" in recognition of nuclear power's increasing importance and a growing awareness of a uranium supply-demand gap
Thanks for that - I am reading the table correctly then, and they do have contracts in place that positioned them bearish/flat on the price for years.
The spot price for uranium, vital for fueling nuclear reactors, climbed to just over $103/pound on Monday, a level not seen since 2007, according to a chart from Numerco, a U.K.-based spot price for uranium.
That follows a roughly 90% price gain for the metal in 2023 in a market that has struggled to keep up with fresh demand.
https://www.morningstar.com/news/marketwatch/20240115172/the-squeeze-is-on-uranium-prices-hit-new-record-and-industry-watchers-see-further-to-go
The squeeze is really on as you all know. Could reach highest price ever.
https://www.marketwatch.com/amp/story/the-squeeze-is-on-uranium-prices-hit-new-record-and-industry-watchers-see-further-to-go-54f9d7c8
Agree - have doubled my holdings here.
GLA
More action than I was expecting on a US holiday - they'll have a bit of catching up to do tomorrow!
Love seeing the price action with buyer chasing sellers
Moved 104/108 now
Numerco - indicative now up at 106 outside the bid / ask range
Jan-24 IND 102.00 106.00 0.00 105.00 IND
Yca_700p_2023
You’ve passed your handle name target 😊
1. https://x.com/quakes99/status/1746666112291586319?s=20
Useful reminder of KAP agreement
"When $YCA shares trade at a premium to NAV, $YCA can then notify $KAP that they wish to exercise their $100M purchase option at that day's published Spot price.⛏️ Under the terms of their agreement, $YCA then has 2 weeks to launch a financing to raise the $100M needed to close the deal. If successful at raising the full amount (past history shows that $YCA cash raises are usually oversubscribed within 24 hours) they then close the deal 2 weeks later. Over that 2 week interval the Spot price may have risen significantly higher, or not, but the price that $YCA pays on delivery from $KAP will be the price set 2 weeks prior."
2. Sunday Times article - don't expect new info however but may be of interest for those who can't access directly.
https://drive.google.com/file/d/1WBI92YzuViaobffmfxnWlybPcRe0Fx-_/view?usp=drive_link
2.
Well if KAZ fail to deliver on a contract the market will go bananas. They would have t ocover in SPOT or pretty catstrophic
> I'm a bit concerned that YCA may not get delivery in H1 24 of the last purchase.
Haven't gone back to double check - but I think I read KAZ saying they could meet all current commitments OK. Just that the amount they produce above those commitments will be below what they had previously targeted.
>Isnt the 1H 24 new material
No, it's the 2023 option that's not been delivered yet.
Not much info but the publicity can help as we hopefully enter the media phase.
https://www.thetimes.co.uk/article/90c35fd0-7123-482f-a9b2-4b89da0cee09?shareToken=ffa441dcb1154cc4da23076920944ea7
"....This small investor is jolly glad I told you about uranium last September when I paid 486p for shares in Yellow Cake (YCA), a £1.3 billion London-listed business that owns more than 20 million pounds of the metal, which equals almost 15 per cent of the annual global supply. Back then, I said: “The price could continue to rise if more countries decide to place greater emphasis on energy independence or carbon-free self-sufficiency.
Since then, YCA’s share price has surged, hitting 632p on Monday, when I bought some more. Priced at 696p on Friday, they are now my tenth most valuable holding
Isnt the 1H 24 new material that they would have ot raise money to exercise the option? So if it didnt happen no fund raising no materila nothing changes? However they have a right to exercise so KAZ has ot buy spot to fulfill. Isnt the exercsieprice lined ot the spot price anyway. Maybe I misunderstood the natre of the option.
Thanks for sanity checking.
So this announcement by Kaz, could be this bull markets cigar lake moment - if you recall, the last bull market, saw uranium go parabolic, when that mine flooded and there wasn't even a supply shortage back then
I'm a bit concerned that YCA may not get delivery in H1 24 of the last purchase.
BUT the impact on NAV is quite minimal c2%
https://twitter.com/andmillsy/status/1744765616244896022?t=vaVD4s5xWnfIOEwvm6PQDg&s=19
Thanks for sharing those tweets. All this increased uncertainty on supply, imho, heightens the likelihood of YCA being taken over.
I'm surprised the trading companies -likes of Vitol, Trafigura, Glencore, Cargill haven't entered the Uranium market.
John Quakes post continued:
Nuclear utilities can't afford to incur disruptions to their chain of reactor fuel conversion & enrichment contracts across the fuel cycle, so they too will be looking at contingency plans to avert a catastrophic outcome, looking to other suppliers and the Spot market for lbs to secure in their own warehouses as a hedge against potential 'we are unable to deliver' emails from their Kazakh-related suppliers.📨😱
U see... the knock-on effects from an unexpected Friday morning news release by the world's largest supplier of mined uranium will reverberate throughout the entire nuclear fuel industry🔊 from Kazatomprom and its global JV partners to Nuclear utilities and traders. All will now be looking to find alternative sources of supply to meet their contractual obligations, including near-term purchases in the Spot market.🛒
The upshot is, no matter whether Kazakhstan achieves its previous 2024 and 2025 production targets or not, every other producer, trader and nuclear utility affected by the 'potential' for missed deliveries will now be actively seeking out Spot lbs to hedge against that possible outcome, which will then translate into far higher Spot U3O8 prices as a bidding war erupts in the Spot market.⚔️
Kazatomprom has heaved a rock into the global nuclear fuel industry waters and now we watch the ripples spread across the world.🪨♒️
That's the way my analysis sees it. U may see it differently and have different outcomes in your own analysis.🙃 That's what makes a market!🤠🐂
PS. U might want to do some research into a contract term known as 'force majeure'.😉