Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
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John Quakes post continued:
Now, just 3 weeks before releasing their year-end 2023 production, sales & earnings along with updated production guidance for this year and 2025, Kazatomprom blindsides all those Nuclear fuel buyers who just signed new supply contracts😊 with a surprise announcement😯 warning them that their suppliers with mines in Kazakhstan (Kazatomprom, Cameco, Orano, CGN, Energy Asia, Sumitomo, KANSAI, SMCP, Uranium One) may not be able to produce the quantities that had been promised for delivery into contracts with their customers!⚠️😱
U saw the reaction in the stock markets and Spot Uranium markets, both surging higher with Spot blasting past $100/lb to a new 16-year high of $104/lb U3O8.🚀
Why?🤔 Because of the many knock-on effects that impact Kazatomprom, its JV co-producers and all their combined Nuclear utility customers all around the world!♒️
Not only does Kazatomprom run the risk that it will be forced to buy lbs in the Spot market, which by all accounts is flashing a $104/lb 'almost sold out' sign, but all of its JV partners expecting delivery of supply out of Kazakhstan (without even getting into all the uranium shipping and transportation issues plaguing Kazakhstan right now) may also be forced to buy in the Spot market in order to make deliveries under their own customer supply contracts - Cameco, Orano, CGN, Energy Asia, Sumitomo, KANSAI, SMCP, Uranium One.🛒
What about Kazatomprom's mega contracts with China to fill up that 60 Million lb warehouse by the end of 2026? Will $KAP come up short and force China into the Spot market to make up the shortfall?🛒
What about the many nervous Nuclear fuel buyers who have supply contracts with Kazatomprom and that long list of JV partners scattered across the globe?🌍😯
Do U think they are going to sit and happily watch and wait to see if they will actually receive delivery of the mined U3O8 needed to fulfill their other signed contracts for conversion, enrichment and fuel fabrication required to keep their reactor fleets operating and load those 3X annual fuel assemblies into the 61 new reactors under construction?🤔
Fantastic post from John Quakes today, would highly recommend reading: https://twitter.com/quakes99/status/1746335647508619432
⚡️The world's largest #Uranium miner $KAP has sent the market a surprise warning ahead of releasing its Q4/2023 Earnings & Guidance.⚠️ Why is this a bigger deal than most realize🫨 that will drive #U3O8 prices higher no matter how many lbs #Kazakhstan produces in 2024/2025?🤔 Let's dive into it🤿...
In September last year Kazatomprom issued a news release confirming their plan to increase #Kazakhstan's national production from 80% up to 90% of permitted levels in 2024, and to 100% in 2025 and beyond.🇰🇿⛏️⬆️ Investors saw that as a bearish signal for the uranium mining sector with many major U stocks selling off -10 to -20% in the 2 weeks following that announcement⬇️ before resuming their upward climb.📉
These were the revised middle-of-range Guidance figures given for Kazakhstan's production:
2023: 21.0 tU = 54.6M lbs
2024: 25.3 tU = 65.8M lbs
2025: 31.0 tU = 80.6M lbs
These numbers were met with a lot of skepticism as Kazatomprom had been saying for the prior 2+ years that they were experiencing supply chain, costs, capital, transportation, labour and other challenges that were making it difficult to achieve their 2022 and 2023 production targets. How was it that these challenges were being magically erased in Kazakhstan in 2024 and 2025 with no signs of solutions, political or operational, that removed these barriers?🤨
In spite of that skepticism, there was a Q4 surge in long-term contracts being signed in the wake of that announcement🧾🛒 as Nuclear fuel buyers lined up to secure their share of this expanded production from Kazatomprom $KAP and its many JV partners in Canada, France, China, Japan and Russia that receive supply from mines in Kazakhstan that they sell on or deliver under supply contracts with their own customers. (see graphics below)
In 2023, Nuclear fuel consultants UxC reported 160 Million lbs of term contract volume, the highest level since 2012 and the first time in over a decade that Nuclear utilities were contracting for sufficient fuel to match their reactor consumption, having only purchased less than half their annual burn rate on average since 2012.📊🐂
As well, Kazatomprom entered into 2 mega supply contracts with China last year that both required $KAP shareholder approval given the massive volume of material being shipped across the Chinese border, much if not all of it going to fill the new Chinese warehouse along the Kazakh border at Alashankou that is to be filled by 2026 with 23,000 tU (60 Million lbs U3O8) supplied by mines in Kazakhstan, more than was produced by the entire country in 2023.🇨🇳🚛🚛
It might seem outlandish now considering the discount that YCA is trading to NAV, but I am starting to entertain the possibility we could see YCA exercising their option to buy uranium from Kazatomprom earlier in the year than many expect.
Interesting post about it from Marcelo Lopez at L2 Capital: https://twitter.com/malopez1975/status/1745941242473742623
I got same answer as you.
I've looked a bit more at the tracker particularly the sheet entitled "backup" which does the number crunching.
The 56.2 cash raised (actually 56.165388) is a bit of a rough estimate and not actually disclosed by Sprott as far as I can tell.
Take a look at backup sheet row 631.
The number of units issued is known at 2,341,200 and disclosed by Sprott but the issue price is assumed to be at closing price 23.99. See formula in cell AB631.
On a day when ATM was active throughout and share price was up c7% this is a bit too crude.
If it's out by c2% which is very possible and they therefore raised c$1mil less then it takes purchase price to c$103/lb.
Am I being dim here.
Cash previous day 18.179mio. Captial rasie 56.165 = 74.344 take away ~0.1mio running cost and balcne on 12/1 of 62.931 imples 11.313 or $113 per lb spent? Figures all from SPROTT tracker. I must have something wrong as seems a very high price. This calcuation has bene fine previously.
Would highly recommend this Crux Investor podcast with Bannerman's Brandon Munro. Really interesting insight into the recent Kazatomprom production issue news.
link: https://m.youtube.com/watch?v=BLcqLe55twc&pp=ygUQVXJhbml1bSAtcG9rZW1vbg%3D%3D
Snooz
Kevin Bamborough has a perspective in short lot of poor contracts
https://twitter.com/BambroughKevin/status/1746199763786125372?t=735l7joWVbM0ktixAMCxwg&s=19
Final numbers are in for SPUT's Friday trading action: $56m cash raised, 100k lbs purchased, now with $63m cash on hand.
link: https://twitter.com/quakes99/status/1745961404270862702
From Quakes
@Sprott Physical #Uranium Trust ticker $U.UN on #Canada's TSX traded over 6.6 Million shares today across all Canadian exchanges🔊 with its ATM running hot.🔥🏧💵 Appears #SPUT may have raised over C$100💰🤠🐂 with Goldman Sachs biggest net buyer of 1.23M shares worth C$39M!😲
Sput closed up 7% at 32.15. interesting to see later if still at premium to NAV for Monday.
Numerco 10200/10500
101.5/103 @Numerco
Potential C$40m raise from SPUT so far today.
link: https://twitter.com/quakes99/status/1745847023331672448
New article in the FT today: "Uranium prices could power on after largest producer warns on supply, say investors"
link: https://www.ft.com/content/67bb40e1-59e7-4b35-9b9a-8e7c68a1f469?sharetype=blocked
Numerco 10000/10300
100/103 @Uranium Markets
link: https://twitter.com/quakes99/status/1745831371984228656
Interesting new article out today from Goehring & Rozencwajg titled: "Uranium: New Market Star", where they make a bold prediction at the end of the article:
"AS U.S. UTILITY BUYERS REALIZE THAT DECADES OF AMPLE SECONDARY SUPPLY ARE GONE, THEY WILL PANIC, SCRAMBLE TO SECURE VOLUMES, AND DRIVE PRICES MUCH HIGHER.
We leave you with a prediction. As U.S. utility buyers realize that decades of ample secondary supply are gone, they will panic, scramble to secure volumes, and drive prices much higher. Eventually, they may be induced to approach the various financial vehicles, including the Sprott Physical Uranium Trust, to seek the uranium they need. Ultimately, they might be forced to pay large premiums to spot prices to secure long-term supply. We believe this will likely mark the top of the uranium bull market. This could be many years away; until then, we believe the uranium price rally will persist."
link: https://blog.gorozen.com/blog/uranium-market-star?utm_campaign=2023%203Q%20Commentary&utm_content=278302468&utm_medium=social&utm_source=twitter&hss_channel=tw-940698796903878657
Sput moved to a premium to NAV since open - ATM probably being turned back on again!
£20.5k up now.
YCA 700p broken today. Next stop 1000p.
BNN Bloomberg: "World’s Biggest Uranium Miner Warns of Production Shortfall"
link: https://www.bnnbloomberg.ca/world-s-biggest-uranium-miner-warns-of-production-shortfall-1.2021190.amp.html
Dated today
https://www.londonstockexchange.com/news-article/KAP/kap-expects-adjustments-to-its-2024-production/16286256
While actively pursuing alternative sulphuric acid supplies, current projections indicate that the Company's intention to achieve 90% production volume as per Subsoil Use Agreements in 2024 may be challenging.
Https://twitter.com/bonker_99/status/1664243938591404032?s=20
Well this went well from under £4.
I suspect Uranium is a bit toppy now so I've had 2/3 out myself - more cash for O&G/Gold/Silver plays ...
GLA
Interesting that they haven't yet been able to guide on the size of the production shortfall. We could see more good news in their next RNS