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8600/8800 @Uranium Markets
Source: https://twitter.com/quakes99/status/1735684767226716566
"Tenex, a Russian state-owned uranium company, is warning American customers that the Kremlin may preemptively bar exports of its nuclear fuel to the US if lawmakers in Washington pass legislation barring imports of it starting in 2028"
link: https://www.bloomberg.com/news/articles/2023-12-14/russia-uranium-supplier-warns-us-clients-to-brace-for-export-ban
8500/8800 @ Numerco
8400/8700 @ Numerco
Numerco now reporting $79.50 / $82
Evo markets reporting $80.50 / $82.
Numerco $72.25/$73.95
Numerco $72.25/$73.50
Numerco price at $71.5 | $72.25
"The Placing was conducted using the Company's existing share authorities. The Placing comprises 18,700,000 new Ordinary Shares, which will raise gross proceeds of approximately £103 million (approximately US$125 million). The Placing Shares being issued represent approximately 9.4% of the existing issued ordinary share capital (excluding treasury shares) of the Company prior to the Placing."
Because the uranium they are buying is at a price of $65.5/lb, not at current spot prices of $72/lb, they are effectively buying uranium at a 7.2% discount at YCA NAV equivalent of 550p, which makes the purchase NAV accretive with the last closing price of 562.5p.
Fantastic news
They are either struggling to find lbs at current prices. Or after having suffered a long time at a steep discount to NAV, they might be trying to build up cash levels in the trust, to effectively build a floor under the price and allow them to track NAV more accurately.
Tracking NAV is the top priority for SPUT now I believe, hence the prospective redemption mechanism.
"The Investment and Operating Restrictions are intended to be conducted in accordance with, among other things, the following investment and operating restrictions, and they provide that the Trust:
(a) will invest in and hold, directly or indirectly, a minimum of 90% of the total net assets of the Trust in uranium
and invest in and hold, directly or indirectly, no more than 10% of the total net assets of the Trust, at the
discretion of the Manager, in debt obligations guaranteed by the Government of the United States or a state
thereof or by the Government of Canada or a province of Canada, short-term commercial paper obligations
of a corporation or other person whose short-term commercial paper is rated R-1 (or its equivalent, or higher)
by Dominion Bond Rating Service Limited or its successors or assigns or F1 (or its equivalent, or higher) by
Fitch Ratings or its successors or assigns or A-1 (or its equivalent, or higher) by Standard & Poor’s or its
successors or assigns or P-1 (or its equivalent, or higher) by Moody’s Investor Service or its successors or
assigns, interest-bearing accounts and short-term certificates of deposit issued or guaranteed by a Canadian
chartered bank or trust company, money market mutual funds, short-term government debt or short-term
investment grade corporate debt, cash or other short-term debt obligations"
So 10% cash is the upper limit.
I am a fan of Finding Value Finance and very bullish on uranium, but this video is silly and the projections are ridiculous, not taking into account bear market dilution. These are fantasy land projections and should be ignored IMO.
Great conversation about uranium's contribution to nuclear power plant economics at 12:00 into this video: https://pracap.com/kuppy-and-mike-alkin-uranium-interview-at-the-2023-world-nuclear-association-symposium/
There is also a great article on the Economics of Nuclear Power by the World Nuclear Association
link: https://world-nuclear.org/information-library/economic-aspects/economics-of-nuclear-power.asp
It is very difficult to know where this market will go. Uranium is very unique because the cost of uranium as a percentage of overall energy generation is circa 4-12% depending on uranium prices (with complete nuclear fuel bundles including conversion, enrichment, fabrication etc. at 20-25% of energy generation).
Contrast this with gas or coal where the cost of fuel makes up 80-90% of energy generation and you realise how inconsequential the uranium price is to the overall economics of a nuclear power plant. This means that the price of fuel for a coal/gas power plant is circa 8 times more sensitive than uranium in a nuclear power plant and highlights how far uranium prices have to be pushed before we enter demand destruction territory.
In the last 3 years we have seen 60x spikes in UK gas and 8x spikes in coal, in contrast uranium is only up 3.8x from the $18 lows 7 years ago. Right tail risk is considerable.
Good article in mining.com on Wednesday as well
link: https://www.mining.com/web/uranium-primed-to-extend-rally-on-resurgent-nuclear-power-say-analysts/
Fascinaing talk betwen Kupy and Mike Alkin, really interesting glimpse into the psychology and motivational drivers of utility fuel buyers.