Exclusive URANIUM Q & A
CC has teamed up with Uranium Investor in order to do a free Q & A about all things Uranium
Hello Contrarian Capitalists! We have a great Q & A for you today about all things Uranium.
kindly requested that this post be made free.In order to protect their identity,
wanted this free post to be a transcript of our off the air conversation. This Q & A was very enjoyable and there is a plethora of information!! Any BOLD comments are either my questions or personal comments.Enjoy!
Thanks for taking the time out of your busy schedule for a quick chat about all things Uranium. Let’s start with something straightforward.
Why Invest in Uranium? Why Now?
On the supply side we are seeing the world's largest uranium producer struggling with increasing output due to reasons I will explain more later in this Q&A. But it's important to note Kazakhstan is roughly half of the uranium production of the world. They are similiar to being the OPEC of uranium I guess you could say.
The second major factor on the supply side is sanctions on Russian uranium by the USA. It is important to note that the Russians are about 5% of production and 40% of enrichment.
The important thing to note about an enrichment shortage is that more uranium is needed to make up for the loss of enrichment to get the same amount of nuclear fuel. I believe that there is a chance that these sanctions on Russia by the USA could later become the EU sanctioning Russia. There is of course the chance that these sanctions end especially if Trump becomes President.
However, I believe this is unlikely to occur immediately if Trump is President and so will likely still affect the market for years. I believe that nuclear utilities are unlikely to want to take a risk on their uranium supplies especially since its a low % of operating expenses so will buy the uranium early on and enter a period of inventory restocking to hedge these risks.
On the demand side, we have a nuclear renaissance. When Russia invaded Ukraine there was a big mention about how to stop being reliant on Russia for energy given that they are an adversary of the west and a huge producer making prices soar when they produce less. The west responded by focusing on nuclear energy to reduce dependency on Russia.
So we have supply problems for producers worth about half of production meanwhil demand increases about 4% per year while there is already a shortage. This is why I am super bullish on uranium.
Kazatomprom are having issues trying to increase production.
Why is this?
How will this affect the market moving forward?
First of all, I mentioned this in a lot more detail in my last post which is FREE. I highly recommend subscribing to my substack if you want to see it.
Kazatomprom are having problems ramping up production because of a problem with gaining the necessary sulfuric acid for their mining operations. What is particularly interesting here is that these problems potentially might become A LOT MORE WORSE.
If the sulfuric acid plants get privatised we will likely see acid being diverted from uranium to agriculture reducing production. I think something else quite interesting here is that the current leadership of Kazakhstan, where Kazatomprom operates is a fan of privatisation which increases the likelihood of this occuring. I think the second main thing is that Russian JV's were prioritised over other JV's in terms of access to sulfuric acid making the market more bifurcated.
The second thing is just delays with increasing production just in term of doing things slower than expected in some cases. We recently saw a number of high level executives leave the company before they reported this and I don't see why it will stop.
There is a possibility this could be a "soft takeover" of Kazakhstan by Russia. There is a chance Putin forced Kazakhstan which is located close to Russia to not produce as much in ehich case it could be possible Kaxamhstan just stops selling uranium to the west completely making uranium explode even more.
Of course, most likely this isn't the case and this isn't necessary for uranium prices to go higher.
Just a small disclaimer - we are not Independent Financial Advisors (IFA’s) so please do not construe any of this advice as investing advice. This is merely 2 people having a chat about Uranium.
With that out of the way, what companies might be of interest? And why?
To start of with I would say to avoid Kazatomprom because they have problems with ramping up production. These are problems that will last very long I believe. Potentially you are looking at the sulfuric acid plants in Kazakhstan being privatised which means it won't necessarily go towards uranium ptoduction, more is likely to go to agticulture.
Then there is the risk that Russia invades Kazakhstan, they already have plans for how to potentially invade and this will harm production. So first of all, not Kazatomprom.
Second of all, I would say avoid companies that don't mine and won't mine soon. There's a common saying "a mine is a hole in the ground with a liar standing next to it". A lot of these guys are bullshitting about their plans to mine anything.
Thirdly, I would say avoid lower cost producers as they have less torque to the uranium price. Earnings increase as a bigger % for every $ increase in the uranium price for higher cost producers. Despite having higher P/E's when the uranium price really rockets the high cost producers will be a steal.
Other than this all other miners should be fine. One of the miners I find particularly interesting is $UEC... first of all it is in the USA and the DOE said they would purchase uranium from US miners for the emergency stockpiles.
Second of all, and this is what I find particularly interesting, they have links to the ex-PM of the UK, Boris Johnson. Amir Adnani actually does business directly with Boris Johnson. I think there is a good chance they get unfair advantages over the others.
But overall, any company that is;
1 - Heavily torqued
2 - A lower risk producer
3 - NOT Kazatomprom
These should all be fine. Please do your own homework and see our disclaimer at the start of the question.
Superb. This will give people plenty of information to work with. Thank you for sharing your insights.
Where can people find you on social media?
I can be found on social media on twitter and substack I go by the name "uranium investor" on both of these.
Substack =
X = Uranium Investor
That’s great. I’ll add these links to the article. Thank you for your time today Uranium Investor! Have a great week.
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