The Energy Show

Recording date: 26th October 2023

Interview with John Jentz, CEO of Latitude Uranium (TSX-V: LUR)

The global uranium market is experiencing renewed interest from generalist investors and funds who recognize that nuclear power provides a critical source of clean, reliable baseload energy. With much of the world's uranium supply coming from Russia and Kazakhstan, there are concerns around security of supply. The US is allocating billions of dollars to establish domestic enrichment capabilities and energy security and China is securing uranium supply to meet its growing nuclear reactor fleet.

With many countries setting net zero emissions targets in the 2050-2060 timeframe, it is becoming clear that a transition away from fossil fuels will require a substantial increase in nuclear power. However, bringing new uranium mines online takes significant lead time, so supply is expected to lag demand growth in the coming years.

The upward trend in uranium prices, with spot over $75 per pound, reflects catch-up from years of low prices as well as looming supply deficits. Further price appreciation is expected as utilities rush to secure long-term contracts. John Jentz, CEO of Latitude Uranium Inc. believes they are well positioned to take advantage of rising uranium demand and prices given their Canadian assets and focus on expedited production timelines. Overall, it is an exciting time in the uranium market and it is time to be optimistic about the opportunity.

Learn more: https://cruxinvestor.com/commodites/uranium

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Recording date: 25th October 2023

Uranium’s Fundamentals Signal a Major Bull Market

After languishing for over a decade, uranium prices are on the cusp of a new bull market that stands to reward investors positioned in advance. A confluence of factors suggests the uranium market is transitioning to a period of sustained higher prices needed to incentivize new mine supply.

The key demand driver is global nuclear power utilities contracting to lock in long-term uranium supply. This appetite for signed long-term deals cratered after the 2011 Fukushima disaster, as utilities instead ran down excess inventories. But contracting volumes are now accelerating again as outlooks improve for nuclear power’s growth trajectory.

Industry estimates project over 1.5 billion pounds of new uranium supply will be required by 2040 under base case scenarios. Many reactors face life extensions rather than early retirement. Dozens of new units are under construction. Smaller modular reactors are also poised for wider deployment.

This collective expansion of nuclear energy is necessitating new long-term uranium supply contracts to fuel reactor requirements. Major miners have reported contract prices in the $50-80 per pound range, up sharply from under $30/lb in 2020. Further inflation in contract prices is likely as more utilities compete for limited uncommitted supply.

While rising prices normally call forth increased mine supply, uranium markets rarely behave linearly. Existing mines have faced unexpected setbacks recently despite higher prices. New mines take well over a decade to develop. And projects in speculative jurisdictions carry exceptional risks.

All this makes smooth supply growth impossible. The industry requires contract prices above $70/lb to incentivize capacity replacement and expansion. With uranium demand swelling, the widening supply deficit points to recurring price spikes until substantial new production comes online.

Developers targeting North American and Australian deposits are best positioned to attract capital. Their uranium production will be coveted by utilities seeking security and diversity of supply. Geopolitics has returned as a major priority given Russia’s outsized role in global uranium output.

After wrong-footing investors for years, uranium fundamentals are decisively turning positive. Powerful catalysts are converging to support a long-term bull market:

- Accelerating utility contracting tightly couples demand with prices
- Lead times prohibit supply from responding quickly to price signals
- Supply deficits are projected to periodically spike prices higher
- Geopolitics incentivize production from stable jurisdictions
- Given vast upside potential during past bull cycles, uranium equities offer an extremely asymmetric risk-reward proposition. As institutions recognize the compelling fundamentals, significant capital inflows could ignite the next major uranium bull run.

Learn more: https://cruxinvestor.com/commodities/uranium

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Recording date: 19th October 2023

*What’s been happening*

Spot uranium is back through US$70/lb after dipping into the $60s. The market has digested Kazatomprom’s plan to increase production in 2025 and realized supply is still going to be hard to come by.

The world has been very distracted by the Middle East and Gaza the last 10 days. Even though there are no direct effects on the uranium sector that are immediately apparent, it has added to investor uncertainty. This uncertainty affects sentiment more broadly and has put a pause on uranium stocks.

*Winner of the week*

Bangladesh this week celebrated becoming the 33rd nuclear power producing country in the world as they received their first batch of uranium fuel for their first ever nuclear power plant.

Plans for a nuclear power plant in Bangladesh were proposed back in 1961. In 2007 the proposal of 2 units at Rooppur Nuclear Power Plant was put forward. By 2009 the government approved a Russian proposal and 2 years later in 2011 an agreement with Rosatom was signed to build at Rooppur.

Construction of the first unit commenced in 2017, with commissioning in 2023 and the second unit in 2018, with commissioning in 2024. Russia has financed 90% of the project costs.

https://www.dhakatribune.com/bangladesh/327151/bangladesh-receives-russian-uranium-to-join
https://world-nuclear.org/information-library/country-profiles/countries-a-f/bangladesh.aspx

*Bungle of the week*

Despite EU member states’ (including Germany) finally agreeing on the reform for the bloc’s electricity market, the German Greens party are still trying to derail the whole deal for the sake of preserving their sense of relevance maintained through irrational, unscientific opposition to nuclear power.

https://www.cleanenergywire.org/news/france-and-germany-claim-eu-deal-electricity-market-success-despite-unresolved-nuclear-questions

00:37 - Distraction in the Middle East
01:45  - Spot Uranium is Back through US$70/lb
05:10 - Winner of the Week: Bangladesh Becoming the 33rd Nuclear Power Producing Country in the World
11:08 -  Bungle of the Week: Greens Party of Germany as They Continue to Oppose to Nuclear Power
17:16 - Question of the Week:  Washed Away Talks on Yellow Cake PLC Exercising their 2023 Uranium Purchase Option
22:20 - Tweet of the Week: What Petroleum Companies were Thinking Back in the 50s
26:27 - Moonshots or Fizzers the Week: Making Hydrogen from Nuclear Energy

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Interview with Siobhan Lancaster, CEO/MD of 92 Energy Ltd.

Our previous interview: https://www.cruxinvestor.com/posts/92-energy-asx92e-parallel-zone-discovery-hints-at-further-significant-uranium-resource-4065

Recording date: 11th October 2023

We're glad to have Siobhan Lancaster again this time to discuss the global demand for uranium. Siobhan provides an overview of where current nuclear power production comes from, with the US as the largest producer followed by China and France, and notes that most major nuclear power producers are not significant uranium suppliers themselves.

Factors driving increased demand for nuclear power are discussed, including energy security, affordability compared to alternatives like gas, small footprint, and new small modular reactor (SMR) technologies. They examine nuclear growth forecasts, arguing the World Nuclear Association's projections are conservative given the potential for rapid SMR adoption. Key countries covered include the US, which has bipartisan support for extending the lifespan of reactors and developing SMRs; China, which plans to greatly expand its reactor fleet; Japan, restarting reactors post-Fukushima; and new entrants like Saudi Arabia.

Siobhan concludes that nuclear demand is likely to exceed forecasts and highlights the crucial significance of uranium within the context of nuclear energy.

View 92 Energy Company Profile: https://www.cruxinvestor.com/companies/92-energy

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Recording date: 6th October 2023

Previous Energy Show with Brandon Munro: https://www.cruxinvestor.com/posts/how-namibia-uranium-benefits-from-off-shore-oil-discovery-3784

What’s been happening?

Since our last energy show recording on 31 August, uranium spot has appreciated from $61.35 to $70/lb.  The market is closely watching the softening over the last two sessions after spot hit $73. Will the market pause around $70/lb or is this simply a profit taking ledge on a steep climb upwards?

Kazatomprom has announced their 2025 production plan. We examine the specifics of their announcement, the profit taking that followed and answer what it really means.

We have a tie this week between 92 Energy & Constellation Energy for Winner of the Week - watch to find out why, and also discuss Bungle of the week from South Korea where data has shown their nuclear phase out policy generated near $7 billion loss from the delayed commissioning of the two units at the Shin-Hanul plant alone. Fortunately, the industrious South Koreans have already redeemed themselves as the current government aims to nurture 60 nuclear exporters. 

We attempt to answer "what does it mean for uranium now that France is pulling out of Niger?"

And also cover SPUT’s contemplation of a limited redemption mechanism and whether that will have a significant impact on uranium market fundamentals: could it really open the uranium floodgates? Will we see utilities buying uranium directly from SPUT, instead of producers? 

Learn more: https://cruxinvestor.com

Interview with Siobhan Lancaster, CEO/MD of 92 Energy Ltd. (ASX: 92E)

Recording date: 5th October 2023

Today, we're very lucky to welcome Siobhan Lancaster to the Energy Show roster to take us through a beginners / refreshers guide to Uranium Supply. A uranium industry veteran with over 10 years of experience, Siobhan presents an informative overview of the global uranium market. Having worked on projects in Australia, Namibia, and Canada, Lancaster provides unique insights into uranium production and mining.

The discussion begins with an introduction to the four major uranium producing countries - Kazakhstan, Australia, Namibia, and Canada. Together they account for over 74% of global uranium production. Key details on each country's market share, mining techniques, major mines, and ownership are provided.

Siobhan offers an in-depth look at major uranium mining projects around the world, including the massive Husab mine in Namibia, high-grade deposits in the Athabasca Basin, and the technical marvel of Cigar Lake in Canada. Challenges facing each jurisdiction are also examined.

Trends like China's growing demand and strategic contracting of uranium supply are noted, as well as the potential for in-situ leach mining to be a game changer in reducing costs and environmental impacts. The discussion underscores uranium's pivotal role in nuclear energy.

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Interview with John Jentz, Director of Consolidated Uranium (TSX-V: CUR)

Recording date: 27th September 2023

IsoEnergy and Consolidated Uranium have entered into a definitive agreement to merge in an all-share transaction. 

Under the terms of the deal, Consolidated Uranium shareholders will receive 0.50 shares of IsoEnergy for each Consolidated Uranium share they own. This values Consolidated Uranium at approximately $903.5 million on a fully diluted in-the-money basis.

The combined company will have a portfolio of uranium projects in Canada, the United States, Australia and Argentina. Key assets include IsoEnergy's high-grade Hurricane project in Canada's Athabasca Basin and Consolidated Uranium's past-producing mines in Utah that are permitted and ready for restart.

The merger is expected to provide greater scale, asset diversification, enhanced capital markets presence, and exposure to near, medium and longer term uranium production potential.

The deal has the unanimous support of both companies' boards of directors. Consolidated Uranium shareholders will vote on the merger at a special meeting expected in November 2023. The companies are targeting completion of the merger in Q4 2023.

Concurrently, IsoEnergy is undertaking a $21 million private placement of subscription receipts, which will convert to IsoEnergy shares when the merger closes. The placement is backed by cornerstone investors including NexGen Energy and Mega Uranium.

The merger will create a new leading uranium company with a diverse portfolio of high-quality uranium assets, providing leverage to expected growth in the uranium market. The combined company will be better positioned to advance development projects towards production.

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Learn more: https://cruxinvestor.com/companies/consolidated-uranium
https://cruxinvestor.com/companies/iso-energy

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The World Nuclear Association conference in London last week provided some valuable insights into the current state of the uranium market. There was a noticeable shift in sentiment among participants compared to previous years. The mood was more somber among uranium producers as they recognize the challenges ahead to raise capital and ramp up production after years of low prices. However, there is also an underlying tone of quiet confidence that higher prices are coming due to looming supply shortages.

On the demand side, there is broad consensus that nuclear power capacity needs to expand significantly, possibly even triple by 2050, to meet carbon reduction goals and energy security concerns. This would require ramping up annual uranium demand to 500 million pounds from current levels of less than 200 million pounds. Utilities are starting to take concrete steps like accelerating contract activity and making requests for future fuel deliveries for small modular reactors coming online in the late 2020s. This is shifting nuclear from a theoretical climate solution to an actual growth industry again.

However, the supply side remains uncertain. While over 450 "zombie" projects popped up during the last price spike, very few actually reached production. The existing developers face challenges raising the hundreds of millions in capital now required while also competing for experienced talent. Experience matters when unavoidable problems arise with complex projects. Consolidation via M&A deals is likely as smaller developers get taken out before reaching production. However, the current high valuations may be disconnecting company values from their actual ability to produce future pounds. Utilities are increasingly scrutinizing suppliers' track records and future pound production potential.

In the term contracting market, the shifts are subtle but telling. Terms like allowing utilities to vary annual delivery quantities, extension options, and reactor operations clauses are disappearing or becoming more restricted. This reflects suppliers' stronger leverage to demand stricter terms. However, base term prices remain in the $50s range for now. The floor prices in collar contracts are rising though, indicating utilities' acceptance of higher long-term pricing. Overall, the availability of sub $60 contracts is declining quickly while $60-70 contracts are increasing. Some early movers have signed initial deals to gain credibility, but the broader long-term market still has significant contracting ahead.

In the spot market, there is very limited material available. Major bids for a few million pounds could easily move prices up by several dollars very quickly. Traders expect spot prices to rise into the $65-75 range in the next year absent a change in buyer behavior. Much depends on how quickly new financial buyers deploy their capital and how aggressively they purchase material. Unlike utilities, their investment mandates could change suddenly as market conditions shift.

Overall, experts believe this is the period where the excess uranium inventory that has depressed the market for years will finally be depleted. Despite doubling over the past two years, prices need to rise significantly higher to incentivize required production growth. The confluence of demand growth, lack of primary supply, financial buyers entering, and utilities becoming more concerned about long-term security of supply points to continued upside in uranium prices. However, the timing remains uncertain. While higher prices are widely anticipated, it will likely take strong contracting and field development progress to transition sentiment from expectation to realization in the uranium market.

View All Energy Show Episodes: https://www.cruxinvestor.com/categories/themes/the-energy-show

Recording date: 1st September 2023

What’s been happening

Brandon has been in Namibia this week for the annual Namibian Mining Expo.  We chat through what has been happening in Namibia. Offshore oil & gas and green hydrogen starting to ramp up in the country.
 
Winner of the week

Uranium sector as a whole - Spot price has risen above $60/lbs  & ETF’s have continued to see a substantial inflow of funds.

Bungle of the week

Friends of the Earth for their failed lawsuit that looked to block the state’s largest utility from seeking to extend the operating life of the Diablo Canyon Nuclear Power Plant.
https://www.washingtonexaminer.com/policy/energy-environment/judge-dismisses-lawsuit-close-diablo-canyon-nuclear-plant#:~:text=A%20California%20judge%20dismissed%20an,Diablo%20Canyon%20Nuclear%20Power%20Plant
 
Question of the week

UEC has done a couple of acquisitions in the last week, what does this mean for the sector?
 
https://www.marketscreener.com/quote/stock/FORUM-ENERGY-METALS-CORP-49477430/news/URANIUM-ENERGY-CORP-PURCHASES-60-INTEREST-IN-THE-HENDAY-PROJECT-ATHABASCA-BASIN-SASKATCHEWAN-FOR-44690603/
 
https://www.prnewswire.com/news-releases/uranium-energy-corp-acquires-portfolio-of-canadian-uranium-exploration-projects-in-saskatchewans-athabasca-basin-from-rio-tinto-exploration-canada-inc-301906379.html
 
Tweet of the week

Ia Aanstoot for her campaign asking Green Peace to drop their opposition to nuclear energy.  In her first ever Tweet she got just under 500K views in 24 hours.

https://twitter.com/ia_aanstoot/status/1696375089598771522?s=20
 
Moonshots & Fizzers
Oklo and Centrus Energy Sign Memorandum of Understanding set out to solidify HALEU fuel cycle, trade advanced nuclear power & fuel.  Could this synergy become the answer to HALEU production in the US?
 
https://www.prnewswire.com/news-releases/oklo-and-centrus-energy-sign-memorandum-of-understanding-for-fuel-components-and-power-procurement-to-support-the-deployment-of-advanced-fission-technologies-in-southern-ohio-301911056.html
 
https://www.powermag.com/centrus-oklo-set-out-to-solidify-haleu-fuel-cycle-trade-advanced-nuclear-power-and-fuel/

Recording date: 22nd August 2023

John Ciampaglia, CEO of Sprott Asset Management, delves deep into the intricate world of uranium and its position in the global economy. Addressing the resilient nature of the uranium price amidst a volatile year for commodities, Ciampaglia highlights the robust demand and supply fundamentals that have shaped the market. With references to geopolitics, he underscores the importance of security in the supply chain, and the increasing need for countries to re-evaluate their alliances and trading strategies.

Moreover, as the global community pivots towards more sustainable energy sources, the role of nuclear energy comes into sharp focus. From potential risks like large-scale accidents to the promise of reliable base-load power, Ciampaglia discusses the critical aspects that will influence the future of nuclear energy. For investors, this conversation offers a clear perspective on the uranium market's trajectory, emphasizing the growth of uranium mining ETFs and the broader investment landscape in this burgeoning sector.