thank you I'm Charlotte McLeod with the investing News Network and here today with me is Justin Kuhn founder and publisher of uranium Insider thank you so much for joining me online today always great to see you my pleasure good to see you as well Charlotte really exciting to be talking to you there's lots going on in the uranium market and I think we're going to end up doing hopefully a pretty deep dive on the sector but to begin I wanted to start with kind of a light question which is if you had to pick a word to


describe the market right now what would it be overall Market of the Iranian market the uranium Market oh I'm thinking I I would say fragile and and that's that's specifically talking about the supply side of the market I think is very fragile okay and that is definitely something that we're going to get into to kick off that Supply conversation I want to delve into a topic that you seem to have been writing and talking about quite a bit recently which is kazakhstan's a deepening relationship with China and


with Russia so I wondered if you could begin by outlining what it's doing to deepen those relationships and why this is such a concern yeah I think um I think the story around Kazakhstan and their supply of uranium is is is fundamental to my comment about the supply side being fragile so Kazakhstan produces more than 40 percent about 43 as of last year the total Global Supply of uranium they are the biggest player in the space and uh and it's not even close and so whatever happens in Kazakhstan or to Kazakhstan


affects the market in a very big way um nuclear power is incredibly important to the world it's it's close to 10 percent of global electricity Supply and to have a single provider produce almost half of the necessary element to fuel those nuclear reactors across the globe is is pretty wild from a Commodities perspective uh just to put it to put it plainly um Kazakhstan has been a very reliable producer of uranium for uh you know about 15 years they ramped production very rapidly from the mid 2000s and


peaked out in 2016 which coincidentally was the the bottom for the actual commodity of uranium um prior to going partially public in 2018 they were 100 state-owned entity and a lot of that production ramping had everything to do with the uh rapid depreciation of the Kazakh tengi so basically they produce their their cost of production were valued in tenge and then they would sell in in US dollars so they were able to play that currency play very successfully for many years just producing an incredible


amount of uranium into a declining price environment for the commodity so that really had a lot to do with the bear Market of course the demand side of the bear Market was the biggest story which was you know Japan's entire flea coming offline following the Fukushima daiichi disaster Germany shutting down reactors as well but the ramp in production from the kazakhs had uh almost as big of a role to play in that in that pricing environment and um after going partially public in in 2018 they've had much more let's say uh


responsible actions in the market they have been very very friendly to the West historically um in fact just in 2021 U.S utilities purchased more than half of their uranium needs from Kazakhstan um an incredible amount of uranium and they've been the reliable producer next to of course you know camaco and irano and Toronto has joined Ventures with camaco and with because Adam prom so comes out improm is the uranium Mining Company in Kazakhstan they are majority owned by The Sovereign wealth


fund of the country of Kazakhstan they own 70 of of the of the shares of the company so the other 30 is floated publicly and they're listed on the London Stock Exchange um there's been a number of shake-ups for the company and the country over the past couple of years so early last year they had an uprising within the country a citizenry Uprising and that lasted for a very short period of time before Russian troops and Belarusian troops came in and sort of quelled that Uprising in pretty short order a couple


months following was the invasion of Ukraine by Russia which the West has outright condemned and has taken multiple actions against Russia um in terms of various forms of sanctioning economic sanctioning primarily and uh that relationship between Russia and Kazakhstan historically has been obviously very strong with Kazakhstan being a former Soviet Union state and also part of the um the csto and so the csto is a is a collaboration of various Eastern European countries in Russia and uh historically speaking they


support each other in in various geopolitical matters so now that this Invasion has taken place and is ongoing um Kazakhstan has done their best to sort of stay at arm's length from this conflict and remain open and trustworthy to the west and there's a number of elements that have complicated that in over the past 12 months one of those is being the attempt to avoid transportation of material coming out of Kazakhstan going through the port of Saint Petersburg in Russia which is the primary shipping route to the west from


Kazakhstan so Kazakhstan will transport uranium for example by rail to the port of Saint Petersburg and then by ship out to the various areas in the west that has always been complicated because Port of St Petersburg is in Russia and uh shipments coming from Russia have uh have encountered various problems so their solution they've been working on for a number of years and have tried to accelerate that solution in the past year has been to ship it West to go through the Caspian Sea the Black Sea


and cross a number of countries with their own geopolitical uh complications let's call it so the shipping from the country has become more complicated difficult and expensive more recently what just came out about six weeks ago was that one of the very large new deposits to be developed in the country of Kazakhstan is the number six and seven blocks of the budnovskoy mine and what happened was 49 ownership of this new mine was pushed through to Russia by The Sovereign wealth fund which is the 70 owner of kazadambalm now


what we understand is that management of because Adam prom was mostly if not unanimously against this deal for Russia to take a 49 stake in this very large new deposit that's being developed there but the majority owner of the company pushed it through and what happened following was a number of upper management uh uh players basically left the company and uh nobody knew why at the time now that information has come out and clearly in management was not happy with this deal being pushed through with


Russia um I think this enormously complicates things for the country and for the company the problem with that is that regardless of how anybody might feel about what is going on in Ukraine or where they stand on these geopolitical situations the Western countries have um like I mentioned just unanimously condemned Russia for these actions in any country that is supportive of that could very well fall under any sort of sanctioning that might come from these countries and right now there's legislation moving


through the U.S Congress to actually ban Russian uranium um so there's this looming question of will joint venture partners with Russia um fall under that same category eventually that's an open question I don't know the answer to that but it adds risk to this historically very reliable jurisdiction the other element that is very interesting when it comes to Kazakhstan Iranian production is that already about half the uranium produced by because Adam prom is sold to China there are a


number of Chinese joint ventures with kazad and prompt and China just recently announced a large transaction with Kazakhstan large enough to where the cumulative value of the contracted pounds with this Chinese entity are now greater than 50 of the book value of because Adam problem and that required a shareholder vote in order to approve that transaction we don't yet know the size of the transaction but uh it's large however large it is it's large so to to wrap those two points up basically what it's looking like to us


is that the number one producer of uranium in the world which is because Adam prom and of course the country of Kazakhstan looks increasingly tied to the east so when you have most of the uranium demand in the west you know 25 of the world's uranium demand comes from the United States alone um when you have this major player increasingly tied to both China and Russia that creates a lot of risk for Western nuclear utilities especially when they are voluntarily avoiding business with Russia currently and that


material has the potential to be officially sanctioned by the United States what will happen if that passes there are waivers available for U.S utilities to continue to receive those deliveries if they can make one of two cases one that there literally are no other options to buy material that they have to get that material period the end uh and two if it's deemed at its national uh National Security concern if they don't receive those deliveries but if that sanctioning legislation does


actually pass it's entirely possible that Russia could respond to that and actually say we're not going to be shipping you any more material so long story short a lot of risk that wasn't there 18 months ago is now there in the country of Kazakhstan and this is really shaking up the market okay thank you for that summary I think that's really important for everyone who's looking at the market to understand so a lot up in the air but again these really big future potential problems for the Western utilities


I wondered if we could also take a look at what those Western utilities are doing right now in terms of their supply so we know that they are signing long-term contracts we know that the spot Market is getting tighter I wondered if you could put those ideas into context by maybe sharing some numbers third um yeah the long-term Contracting cycle generally speaking is just kicking off and to put that in some historical contacts without uh prior to mentioning the U.S specifically is that long-term


Contracting tends to run in very very long cycles and the fact that Supply is slow to respond um makes these Cycles all that more extreme so typically what what we've seen in the past is a long period of time usually 10 years or more where utilities where the market is over supplied and nuclear utilities will sign in long-term contracts a significantly lower volume than their annual replacement rates so a replacement rate levels of Contracting as of you know the the annual Demand right now is somewhere to


the tune of 175 to 180 million pounds uranium leading up to the previous bull market we had a 10 plus year period of around 40 less than 50 percent um on an annual basis of replacement rates being contracted by utilities and that has everything to do with the supply in the market so if a utility can secure their needs for their reactors operation via a short-term contracts or spot Market purchases or off takes carry trades they'll do so because coming to the table with an actual producer inherently has to incentivize that


producer to produce so when the market is oversupplied and a utility let's say um specifically during the previous 10 years we had an abundant Above Ground mobile inventory that came from the over Supply like I mentioned a lot of that came from Kazakhstan with demand coming off from Japan the market continued to be over supplied and we had what was called carry trades happening hand over fist for many years so this is a Trader that can for example can make a deal with the utility to deliver pounds out


let's say three four five year period and then they will cover their uh their contractual obligation to deliver by buying Above Ground mobile inventory pounds in the spot Market or sometimes from off takes but there was so much material in the spot Market that the trader would sign this contract they would factor in interest rates which obviously were very low for a very long time their their profit their cost of carry and and the nuclear utility would sign that and that would be a boon for


the utility and for the Trader because they would have the utility could avoid going to camaco for example and saying hey I know you've got MacArthur River on care and maintenance I know that's costing you 10 million bucks a month what do you need from me in order to bring that back online those conversations didn't really happen because utilities are not going to step up to the plate and voluntarily pay 45 bucks a pound fixed when they can go to a carry trade and pay 30 bucks a pound


so that happened like crazy and that led to the situation we're in now and to some extent the situation in the previous bull market so years of under Contracting ultimately and inevitably leads to years of over Contracting and we're just starting that now so uh a couple of elements that I think are crucial to understand now is that a we're entering entering a multi-year period where we expect utilities to contract greater than their replacement rates so that should be 180 to 200 million pounds plus per year starting


now uh going out probably five plus years uh in every year during that time period two we're starting from a very high price we're starting this Contracting cycle in the 50s we've got a spot Market sitting right now 56 25 a pound something like that off the top of my head um and the market is very very thin so we have primary producers essentially sold out of uranium for the next few years we have a very thin spot market so to give a little bit more specifics on that um there's a nuclear utility in the U.S


that recently extent had the life of their reactor extended by five years so they're coming into the market looking for material um so they put out an RFP pretty large RFP uh request for proposal looking for over 6 million pounds of u308 equivalent specifically requesting either uf6 or eup so they were wanting to kind of because they need it sooner wanting to ideally skip the uranium phase of that cycle and just go and buy the products of of these nuclear fuel sources to accelerate the process of


getting that fabricated fuel for the next core load to that reactor so in the process of putting out this large RFP which by the way they have yet to make a decision on the offers they've received and it's been out there for more than two months some players within the fuel cycle in an attempt to fill this RFP put out their own RFP into the market for Uranium so in order to move that material through their own processes in order to fulfill the needs of this utility they said hey we need the yellow


cake so that we can run it through our processes that RFP for Uranium as of as of our conversation with uh with this entity had not been filled so we're looking at you know about two to two and a half million pounds of uranium in this RFP for 2024 to 2026 delivery and they had vastly insufficient offers um the significance of this is pretty profound this doesn't happen this is something that 12 months ago would have been filled like that even in the previous market with the rapidly accelerating price 05 to 07 let's say


0407 he never had an RFP going fulfilled never so this what we're experiencing right now in the thinness of this Market is essentially an industry first and the utilities are waking up to this um the good thing about this for utilities is they have to hold some level of inventory and usually that exists across the fuel cycle so utility will often have uf6 and eup and fabricated fuel inventories to the tune of around two years of their needs and that gives them a little bit of a buffer but utilities right now are


Contracting for the later part of the decade and it's extremely tight for the coming few years and that is a backdrop for a potentially rapidly increasing price of uranium that we're literally on the precipice of witnessing okay that was also really helpful you do a really good job of breaking down these complex issues into reason people can understand so that's great Supply constraints we know that that's generally good for prices eventually good for the uranium equities as well


I'm curious though and maybe this is a silly question but if we have serious bottlenecks in the supply chain how how serious is that because do we eventually erode some of this good will that has kind of come to the scene from nuclear energy what are your thoughts on that well it is definitely a problem um the extent that nuclear is being de-risked in the countries where uh there's a lot of nuclear capacity so that's you know primarily I would say that's in the United States we have the


largest Fleet in the world in the U.S like I mentioned 25 percent of demand for uranium and everything else and the fuel cycle comes from the United States which is why it's talked about so often because it's very very important important on the demand side and the existing reactor fleet has been largely de-risked by the incentives from the inflation reduction act which are tax incentives for clean energy production within which nuclear energy is finally uh uh allocated to so that's really important on the demand


side but we're seeing a lot of other countries also shift in terms of supporting of nuclear so just just yesterday there was a story in Reuters about Sweden attorney and they they of course have had a a policy of nuclear phase out from the previous decade and they shut down a reactor perfectly good operating reactor two years ago and they are doing a 180 currently I'm looking into building new nuclear France is also a large nuclear country they've got about 70 percent of their electricity


comes from new they're the largest electricity exporter on the planet they're looking at new nuclear Poland has zero nuclear and they're looking at building dozens of reactors turkey just announced in day I believe they're looking at an additional three large light water reactors and of course China is going all out and they have reiterated those plans over and over and including at the recent nuclear fuel conference and Slovenia and a Gentleman who represents a Chinese nuclear company


basically said yeah we're sticking to that plan of a uh let's see 120 gigawatts by 2030. so it's 22 halfway through 2023 right now so that's another what is that uh six and a half years and a more than doubling of their existing Fleet at 55 gigawatts right now so um nuclear is being embraced in various countries around the world and you're absolutely right the fuel cycle um is a problem and it needs to expand uh the good news is that finally we're hearing that some utilities are stepping


up and actually having conversations with enrichers specifically um essentially asking what is it that you need from us in order to de-risk your operations sufficiently to invest in expanding and building more centrifuges to expand enrichment capacity I believe the utility is stepping up specifically to the enrichers currently also to the Iranian miners as well that's been happening as well over the past year um but within Richards when there is more enrichment capacity they can operate those facilities at lower Tails


assays which means the utilities have to buy less uranium so they're looking out for themselves I mean this is what needs to happen this is what needs to happen to incentivize the expansion of capacity across the fuel cycle um in the near term it's not a problem as far as the fuel uh the uranium side of the fuel cycle being tight it is but like I mentioned there are some inventories and utilities are looking out towards the end of the decade so we're not yet and hopefully never will


be um although that's still in question at a situation where there's panic mode and literally not enough of this product to keep these operations functioning that's not where we're at I don't want to um give the impression that the utilities are about to hit the panic button and and you know what's about to hit the fan that's not what I'm saying or what I am saying is it's a very structurally tight market and utilities do have to continue to step up to the plate contract with the existing


producers which they have which is why they're so sold out in the near term and of course then step up and incentivize the other elements of the fuel cycle via long-term contracts with converters and richers in the west to expand capacity and uh support the Greenfield and Brownfield development projects we're starting to see the early signs of that much more of that is needed and of course with the primary producers being so sold out in the near term and having limited capacity even in the mid to long


term higher prices absolutely are needed to incentivize all of these other projects that are on the early stages of development or even in the exploration stages in order to move them and incentivize them to bring new Supply online it's it's a hundred percent fundamental to a functioning nuclear industry really is we need a functioning fuel cycle okay thank you for that I think that pretty much exactly answered the question so that's great on the Note further about demand I want to ask you


about this new AMC actively managed certificate from Missouri invest I as I understand this is a physically uranium investment vehicle I believe geared at non-us investors so interested to get your thoughts on what you think investors should know about that because it's a new entry to the market sure it's it's a really interesting vehicle it was established sort of in response to this prop physical uranium trust addressing some of the um some of the quote unquote shortfalls from the Spud vehicle which is it can


and has been at least over the last number of months traded at a persistent and exclusively discount to nav which means they've been unable to raise any cash since I think early February so it's multiple months we're looking at four months without them raising a penny um will they of course trade a nav again I believe that they will they'll be able to raise money that's the way the spot vehicle operates right when when the market pushes up the price of the trust and it gets uh above a one percent


premium to their net asset value they can issue shares via an ATM in the open market raise money buy uranium and there's been a few periods where they've done that uh with Incredible success where they've bought a lot of uranium in a very short period of time we saw huge spikes in the price um will that happen again undoubtedly but they are trading at a persistent discounts and now when markets are generally risked off and that's what we've been at for uh quite a period of time with a couple of very short


exceptions to that so the Zuri vehicle was set up um it's not trading on a public exchange but it can be purchased through um through most brokerages right with a with an isi number um they trade at nav always because there is no um front running of the of the vehicle prior to the purchasing and there isn't any redemptions of the vehicle that don't correspond to redemptions of uranium so what I mean by that is if you have a position in Zuri and you want to sell down that position if they


have cash in their on their balance sheet they can liquidate that position with cash if they have a buy order that they can cross that sell order with they can do that barring those two options if they have insufficient cash and they can't cross off a sale order with a buy order then they actually will sell uranium into the market to raise the cash to liquidate that position so it's going to take a a different type of investor investor that does not need immediate liquidity like that spot would


provide on you know as a highly liquid vehicle in a publicly traded Exchange um and it's an investor that wants exposure to the commodity at NAB all the time so the upside is that if you were to buy sput kind of close to nav and then you want to liquidate your position but they're trading at a eight or ten percent discount for nav you obviously have less leverage even if the the trust has moved up with the price of uranium you're not getting the full uh you're not receiving the full move as you would


with something the trades always a nav right you were more more uh closely pinned to the price of uranium with this vehicle but the other really interesting element to this is that they are seeking exclusively uh near-term settlement with their purchasing in the spot Market uh so Friday month basically so when they have money come into the vehicle they want to come out and buy a minimum lot minimum lot of uranium in the spot Market is 100 000 pounds so when they have money to buy a hundred thousand pounds they do so and they


settle that within 30 days so it has already to some extent and will create actual near-term price Discovery in the spot Market they did do some buying over the past couple of weeks that information is yet to come out how much money they raised and how much buying they did but uh when we do know they did some buying we do know that it moved the price up so it's it's yet another vehicle for investors to expose themselves to the commodity and um from what we are hearing from multiple industry contacts as there's at


least three more physical acquisition funds that are being set up currently there is going to be probably a half dozen of these things by this time next year and uh it's just this really interesting element to this investment because when you can talk about uh supply and demand until you're blue in the face but this this element of financially driven vehicles that give the investor a lot of power to actually influence the price of the commodity that they're investing in is pretty unique this Market doesn't


really have a paper traded Market or a Futures Market it just it's supply and demand very very truly supply and demand and so there is this element of the market where you or I cannot model out what the financial interests are going to do in terms of uranium purchasing how much demand is that going to equal this year or next year the year after nobody knows but it's going to be something and how much buying they're going to do is going to be dictated by Capital flows that nobody can predict so we have this


beautiful nuclear growth story and very clear supply shortfall for that nuclear growth story as a fundamental underpinning of this investment and then we have this thing over here which is this X Factor that nobody can predict but it's certainly there and it's going to have some level of influence going forward okay and you anticipated my next question which was going to be if we were going to see more of these types of vehicles so really interesting to hear that there could be three more quite


soon I think now we should probably talk a little bit about the price we've seen the price spot price for Uranium it continues to creep higher I know that many people are curious as to where we could go in 2023 and what that movement could look like so if we could touch on that a little bit sure um it's really interesting I think that we've put in a very solid floor around 50 bucks a pound although at this point I would be very surprised if we even pull back to that level the market is thin enough and the demand


is sufficient enough that we should see a pretty stable and Rising spot price for the remainder of the year we are coming into the typically slow period of the summer for nuclear utilities it's possible that it's not as slow as usual given the market dynamics that I've already outlined in this crazy bifurcated market and uh the Contracting cycle that's very much heating up and even the nuclear fuel consultancies are basically writing to their clientele which is 99 nuclear utilities basically


saying don't expect the price to pull back this summer we could very well not see this typically slow seasonal period this year so that's entirely possible um I don't know what that means for the equities necessarily but uh you know the classic selling May and go away kind of thing well we had a nice pop in June so far but we'll see we need to see some follow through on the equity side but as far as the actual uranium Market goes in the spot Market it's so thin right now and and that's with very little


um buying coming from the financially driven vehicles and the only buying that's come that has come from them in the past six months has been about a million pounds coming from spot back in late January early February and maybe about the same from Zuri in the past few weeks so uh so far this year there's been very little influence coming from the financial players but we've seen a very robust move in the spot price why is that um there have been a couple of players that historically have been light


sellers in the spot Market that are now that more recently have been buyers um I can't really say more about that but sellers shifting to buyers that's something producers have been in the market we do know that kamiko has been buying a bit of uranium as well as potentially some other producers and utilities and Traders are buying uranium in the spot Market as well there's not a lot of volume to be had there but the movement in the price of uranium this year has come from the actual players in the industry not the


financials that's important to understand because the big moves in the spot price that we've seen over the past two years have primarily been driven by sput and so again this is something that is being flagged by the nuclear Consultants the moves in this market are coming from Traders and producers and utilities not from sput so take that for what it is um the market is thin the demand is there so we expect we'll see higher prices this this year still I don't really want to put a price Target


because that's going to be dictated by things that I can't model if we see risk on in the capital markets we can absolutely blow out most price expectations but I would be surprised if we're not at least in the mid 60s by the end of the year okay thank you for going through that as well and you started to touch on what's going on with the uranium equities what we could see over this summer want to go a little bit deeper into that and I'm sure you you're enlightening tired of


talking about when are the uranium stocks going to move we haven't seen chemical I believe last time I checked up about 30 or so this year hasn't been really followed through when you go lower down the chain so if you could share your thoughts on that I know that's also a topic that is at the top of many investors Minds right now for sure yeah kamiko is up very nicely this year about 35 from the beginning of the year here um well camaco is the industry darling and it's the it's the institutional


darling so in my opinion what we're seeing is institutional money come into the space because the large caps have outperformed the small caps typically with mining Stock Investing this is what happens at the early part of a cycle right you have the institutional money typically is the Smart money um especially the smaller funds in the uh in the in the focused funds the specialty funds that are actually looking at uranium the generalist funds are nowhere near this investment yet because it's just too small there's not


enough liquidity um we've spoken many times with John chapaglia the CEO of this brought physically right of Sprott and The Operators brought physical uranium trust and um he's he's mentioned multiple times in his conversations with institutional investors with very large aums you know north of a billion uh that they can't even touch the sput vehicle until they see at least 50 million per day in trading volume and we're you know trading about 20 of that on an average Day so a lot of


growth is necessary here still for the sector to have sufficient liquidity for large generalist institutions to even uh even take a stab at it but the fact that we've seen um this broad physical uranium trust kamiko uh perform extremely well this year and followed up you know next gen has been quite strong as well they're also a relatively large cap within the space there's only so many stocks that institutions can actually even buy that's the ETFs that sput that's camigo and maybe a little bit of next-gen in


Denison perhaps so the performance of camaco relative to the rest of the sector to me highlights uh the smart money positioning that's what I believe that we're seeing and uh and at where kamiko goes Sogo is the sector and we'll likely see kind of a slingshot effect where where kamiko and sput lead the lead the charge and when the sector goes full risk on and we start to see volumes increase across the board especially in the ETFs then the mid caps and the small caps usually pay play catch up and usually do so in a big


way and ultimately outperform the large caps in the long run okay I think that makes a lot of sense also really helpful for understanding what's going on as we're getting to the end here I want to touch on I think it's clear that uranium investors have high expectations for what happens in the sector and a lot of those come from looking back at the previous bull cycle what happened there I want to ask you obviously we're in we can tell just by listening to everything that you've said today we're in really


different circumstances than we were back then so they might I guess we might end up seeing again those large games but are there any differences between those two cycles that you would really want people to pay attention to the biggest differences in my opinion are um well there's let's see there's a few differences from from a General market perspective the last bull market in uranium happened during a really strong bull market for basically all Commodities and generally speaking markets


um that peaked out right when the markets peaked out and fell right when the markets fell during the GFC so you had a corresponding kind of risk on environment across markets and we're not currently in that um the first leg up for this Market that we saw December 2020 through November 2021 definitely saw uh with an exception of just prior to that the covid crash but we saw a lot of liquidity come into the markets and uh plenty of risk on kind of uh sentiments and liquidity in markets that certainly


fed that first leg um now we've seen this consolidation over about you know 12 to 18 months and and I believe we're just kind of starting that next leg usually kind of that second leg of of a of a resource bull market can be very very strong and steeper than the first um I think that is coming how soon I can't tell you I don't know if it's next month or if it's six months from now but it's coming um the big difference the big differences in this market compared to the last when it comes to the commodity


has to do with the actual structural nature of the physical Market so you never actually had a supply deficit in the physical Market in the previous bull market which is crazy because we saw the price go from the very bottom in like 2002 of about 10 bucks a pound to 134 bucks a pound in 2007. um and there never was a actual Supply deficit you had to supply scares with the large cigar Lake mine expected to come online flooding and that certainly sent a shock through the industry but the commodity had already quadrupled by


the time that it happened so you already were in an uptrend for the commodity a lot of that had to do with expectations from China's growth and of course they contracted in big volume along with that growth but this Market is different um secondary Supply is just not there especially to the West right now under feeding from enrichers in the west is gone there's zero pounds coming into the market from Western under feeding because it's just not happening so that's a big deal that's 10 million


pounds a year from Western underfeeding that they had two years ago that's not there now um the previous Market you had Mega tons of megawatts that was as Mike alkins from station Cove calls it an off-balance sheet asset for nuclear utilities that was 20 million pounds a year of the u308 equivalent in the form of eup of course with eup you buy eup you skip uranium you skip conversion you skip uf6 you just go straight to the enriched stuff have the fabric have the steel fabricated Bob's your uncle now


that is gone uh Mega tons megawatts ended in 2013. so the buffer of secondary Supply isn't there in this market on top of that because that secondary Supply is not there and utilities increasingly are left without the option of skipping the other elements of the fuel cycle and just buying uf6 there's no uf6 just buying eup it's very expensive and enrichment is constrained so utilities basically with a thin spot market with the carry trade gone with secondary supplies gone and with the


nuclear Fuel Services of conversion and Russian being tight and very very expensive if they can get it in the short term they've got one option left contract for uranium and run it through the fuel cycle and that's what they're doing that's what they have to do so expectations for the next few years are basically a massive rush into uranium because the options for everything else are not there and that is a big big difference from the previous market and then of course the big difference as


well is coming from the financial side of things too right because in the previous Market you did have a lot of hedge funds buying uranium that's a more difficult process you have to go through the uh the the regulatory process to establish an account at a converter to hold uranium and then you have to hold actual physical Uranium on your books so a number of hedge funds did that UPC was in effect but they're buying paled in comparison to what we've seen Spud be able to do already so now we've got sput


Anu energy which is launching next year they've already raised uh 74 million bucks and I think they've got a follow-on of 100 million in the next couple of months and uh whispers about them shooting for an additional 400 million prior to their IPO which is I believe scheduled for Q2 next year uh so spot Inu Zuri yellow cake which buys 100 million dollars or can buy a hundred million dollars of uranium from because Adam from every year and then at least three more and probably more than that in the


works one of those we should hear about very soon and that didn't exist in the previous Market either so the abundant options for an investor to invest directly in the commodity in a liquid manner without having to establish an account at cumberdine or at Port Hope or at calm your X in order to buy uranium that's very different um I would argue the setup here is night and day better than the previous bull market only thing we're not seeing right now is capital flows due to a general


risk off environment in the capital markets will that turn nobody can predict that I believe that it will eventually and I also think that this Market is going to offer a unique opportunity where you actually have a rising commodity environment even though we might be going into some sort of deflationary environment at least for the short and near term so it's in some ways is it similar because of just the general contracting Cycles very predictable um is all commodity cycle uranium goes through extreme Cycles because it's so


slow for Supply to respond to so demand pretty easy to model especially if you leave out those X factors like SMR demand or secondary demand coming from financials actual demand for reactors pretty easy to model Supply that's a little bit harder demand is predictable Supply is not and that's it I don't even know what else to say the setup is is profound it's profound okay that was that was a big question to end on but I think that was again very valuable and you don't have to say


anything else we can wrap it up there I think that was really good thank you as always for coming on to talk about uranium it's always my pleasure yeah good to speak with you Charlotte really great to have you once again I'm Charlotte McLeod with the investing is network and this is just in June with uranium Insider [Music]