Last checked at 
23 Feb 2024 09:30
 |
Geiger Counter Limited Plc
Monthly Investor Report - January
The full monthly factsheet is now available on the Company's website and a summary can be found below.
NCIM - Geiger Counter Ltd - Fund Page for Geiger Counter Ltd
Enquiries:
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For the Investment Manager
CQS (UK) LLP
Craig Cleland
0207 201 5368
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For the Company Secretary and Administrator
BNP Paribas S.A., Jersey Branch
Dean Plowman/Ann-Marie Pereira
01534 813 967/ 01534 709198
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Fund Description
The objective of the Geiger Counter Fund is to provide investors with the potential for capital growth through investment primarily in the securities of companies involved in the exploration, development and production of energy, predominantly within the uranium industry. Up to 30% of the value of the Company's investment portfolio may be invested in other resource-related companies from outside the energy sector.
Portfolio Managers
Keith Watson and Robert Crayfourd
Key Advantages for the Investor
· Access to mining assets in the uranium sector
· May benefit from embedded subscription share
· Low correlation to major asset classes
Key Fund Facts1
Total Gross Assets | £116.7m |
Reference Currency | GBP |
Ordinary Shares: | |
Net Asset Value | 78.38p |
Mid-Market Price | 62.00p |
Net gearing4 | 13.50% |
Discount | (20.90%) |
Ordinary Share and NAV Performance2
| One Month | Three Months | One Year | Three Years | Five Years |
| (%) | (%) | (%) | (%) | (%) |
NAV | 16.86 | 20.88 | 48.08 | 222.02 | 322.99 |
Share Price | 14.81 | 28.50 | 32.62 | 141.25 | 217.95 |
Commentary3
The Fund's NAV gained 16.9% in January, ahead of the Solactive Uranium Pure Play index, which gained 10.5% in sterling terms, and the uranium price closed the month up 9.3% at $100/lb. The Fund's share price lagged the NAV.
The world's largest Uranium producer, Kazatomprom, reduced its production guidance for 2024 by 14% to 56.6M lbs, citing a shortage of sulphuric acid as the cause. Kazatomprom accounts for 24% of global production, but this impacts their joint venture partners equally for a total of ~40% of global production.4 This added to growing concerns from utilities on their ability to contract future volumes which should continue to support pricing.
The Fund remains weighted to producers with little to no hedging, to benefit from the anticipated pick up in contracting volumes at better terms than prior contracting levels, such as those seen with Cameco. Cameco and Kazatomprom are still buying material on the spot market, partly as utilities are maximising their contract flexibility to take larger volumes at lower prices given the fixed price components to those contracts. We remain underweight Cameco, relative to the Solactive Uranium Pure Play Index.
Following the US Senate vote to ban imports of Russian nuclear material, reports suggest it is increasingly likely to be voted through the House of Representatives in the coming weeks. Russia has already warned, via the state-owned uranium trader Tenex, that it could pre-emptively act to ban trade of uranium and associated services to the US. This continues to focus Western utility fuel buyers on the requirement to secure material and further encourages the trend to increase contracting with Western-friendly suppliers, where the Fund is positioned.
Whilst Russia is only 7% of primary uranium mined, they do have meaningful joint ventures with Kazatomprom and therefore influence a much larger share of the market than this figure implies. Importantly, they control a large proportion of global enrichment market, over 40%, which presents fuel supply risks for Western reactors should access be cut. In 2022 the US sourced 12% of its uranium and 24% of its enrichment from Russia.5
The Company announced on 8 February 2024 that it is considering applying for admission of the Company's ordinary shares to the Specialist Fund Segment of the London Stock Exchange as a means of broadening the appeal of the Company to a wider range of shareholders.
| Gross Leverage (%) | Commitment Leverage (%) |
Geiger Counter Ltd | 114 | 114 |
CQS (UK) LLP
4th Floor, One Strand, London WC2N 5HR, United Kingdom
T: +44 (0) 20 7201 6900 | F: +44 (0) 20 7201 1200
CQS (US), LLC
152 West 57th Street, 40th Floor, New York, NY 10019, US
T: +1 212 259 2900 | F: +1 212 259 2699
CQS (Hong Kong) Limited
3305 AIA Tower, 183 Electric Road, North Point, Hong Kong, China
T: +852 3920 8600 | F: +852 2521 3189
Tavistock Communications
18 St. Swithin's Lane, London EC4N 8AD
T: +44 20 7920 3150 | geigercounter@tavistock.co.uk
Sources: 1R&H Fund Services (Jersey) Limited, as at the last business day of the month indicated at the top of this report. 2R&H Fund Services Limited/DataStream, as at the last business day of the month indicated at the top of this report, total return performance net of fees and expenses based on bid prices. These include historic returns and past performance is not a reliable indicator of future results. The value of investments can go down as well as up. Please read the important legal notice at the end of this document. 3Market data sourced from Bloomberg unless otherwise stated. The Fund may since have exited some or all of the positions detailed in the commentary.