Member Info for snooz

>Snooz it would be helfpul to see the NAV based on the long term price indicators - perhaps another what if scenario ?

Cameco only update the long-term indicator monthly, so it's of limited use by itself. I added an indicator a couple of weeks back of the difference between the Cameco short and long term.

Part of me is expecting a slow-and-steady rise or spot from here all the way to $150+/lb.

But part of me is looking at the SPUT discount (https://sprott.com/investment-strategies/physical-commodity-funds/uranium/ currently 2.18%) and thinking if that closes they'll be buying spot again and spot will rip.

All that said, am very disillusioned with how meaningful the spot price is (i.e. seems to be not based on actual trades, or even actual bids/offer e.g. Numerco's "IND" levels) - and might start tracking NAV using Cameco's long-term price instead.

>We al lknow this stuff,

I'm always keen to make sure I am seeing both sides of the story - and am worried I'm in bubble where I am only exposed to the reasons that the price should continue rising.

Who is arguing the "other side" - e.g. saying miners are ramping up supply, or that there's plenty of secondary supply after all, and that prices will stay at this level and fall?

Not sure if anyone here trades in and out of this as the discount charges. I used to but since autumn or so I've just stayed in.

If you were to trade based on the discount, note this is now at a nice round 20% discount to NAV.

Agreed - if there was some issue with digging it out the ground in time to deliver they'd either renegotiate the contract (e.g. just delivery a bit later and YCA saves on storage costs), or buy some in the market.

All seems unnecessary to worry about IMO - although KAZ revised some targets they are still producing plenty enough to service this contract.

Https://world-nuclear.org/information-library/country-profiles/countries-g-n/kazakhstan.aspx has some numbers to help understand the significance of Sulphuric Acid.

These guys seem pretty sure there's plenty of supply and inventory of the stuff: https://www.chemanalyst.com/NewsAndDeals/NewsDetails/global-sulphuric-acid-market-faces-bearish-trend-amid-agrochemical-downturn-24623 so am not sure why miners say there's a supply shortage.

Https://numerco.com/NSet/aCNSet.html

Looks to be because Numerco has lost a decimal point, quoting $10200 offered, and kitco take the mid:

Jan-24 IND 100.00 101.00 -3.00 10200.00 IND

If anyone fancies a giggle, check yellowcake.com , it has got a wild U3O8 price on their website currently.

US$549.50/lb U3O8

Daily Change $-2.99, -0.54%

A link for anyone who can't read the without a subscription: https://archive.ph/76nCT

They have had uranium opinion pieces before: Uranium's Epic Rally Says Lots About the World Right Now, https://archive.ph/1Gk2Y

I find it funny that the new one you share reads more like a WSB post than BBG. It's not wrong (IMO) just very casual language unusual for BBG - blurring the lines between opinion and research.

I'm not convinced there's a change in how "mainstream" Uranium is becoming as an investment. Figures showing the amount of YCA and SPUT held by Private Investors going up would convince me though. I guess it is worth tracking, as peak media attention would likely be shortly followed by peak U3O8 prices. In terms of time: that's good couple of years still I reckon. And in terms of prices: there's still a way to go before there's a glut of "Uranium at all time high" ($148/lb in May of 2007) stories.

That ATH corresponds to ~1200p NAV for a YCA share BTW.

I had spent a couple of years trading in and out in proportion to the discount. But I've stopped doing that, last time I traded (happily a buy) was at 537.9p, in October. Like you, sitting tight & feeling comfy.

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.

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.

> 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.

Anyone here understand the table "Expected realized uranium price sensitivity under various spot price assumptions at September 30, 2023" at https://www.cameco.com/invest/markets/uranium-price-sensitivity

Does it mean e.g. under the contracts that are currently in place (as of 30th Sept), if U3O8 spot was $100 in 2025, they are obliged to supply it at an average of $64 ?

A lot of coverage of this in the news today: https://www.ft.com/content/06f524ac-2515-432c-97a1-e71aa25189e6 / https://archive.ph/wiPzy

This time last year Germany was extending the life of their last few nuclear power plants by ~4 months. A year later these UK-based (EDF owned) ones are being extended by two years. And talk of a decision coming to extend Sizewell B's lifespan by 20 years. An upward trend if ever there was one.

FWIW The unattributed dividend expectations that the author cites are Refinitiv, can be seen here: https://research-centre.barclays.co.uk/shares/direct-line-insurance-group/broker-views/broker-forecast/

More answers to the question of who's buying Spot:

Bloomberg in October: https://archive.ph/ut3n7

Telegraph today: https://archive.is/q1ECi

“I know it sounds crazy,” he [Sean B at BNF Capital] added. “But if large macro funds start playing this investment, and sequestering uranium themselves, there aren’t many ways it can go.”

This chap says utilities are about 15% of the spot market, which he also describes as "opaque": https://sprott.com/insights/video-how-the-uranium-market-works/

>I assume the spot price is being pushed by utilities and none of them are big enough to take out the whole company.

I'd have thought the contrary, that utilities are all long-term contracts rather than the spot market.

Just picturing myself working at one, and being responsible for the whole uranium supply chain up to ensuring uranium rods are ready to put in the reactor.... I'd being ensuring the U3O8 supply is locked in for a few years at least, along with contracts in place for conversion to UF8 and so on. If I was having to dip into the spot market, I think that would be a sign that I'm doing a bad job?

One thing I am sure of: the whole market is extremely opaque.

Agreed, except:

> but that is a pretty big amount of supply and other than the Chinese who else would have the resources.

Market cap $1.4bn right now.

It's not too big for most govs to step up and buy it. Orano still my 'fave' choice as a likely buyer. And surely there's more than a few energy companies that could rustle up the funds too(?).