Investors See Big Opportunity as Uranium Supply Dries up

[Music] Mr Brandon Monroe how are you sir pretty warm up there's been a lot happening this week really I didn't I didn't spot anything are you sure um so well how are you thank you um all good here has been raining for three weeks waiting for summer to turn up in the meantime I entertain Myself by reading the uranium news geopolitics continues to surprise and Delight so shall we talk about North Africa then yeah I said really tragic situation unfolding there for the Nigerians now interestingly there seems to be and of course for people who haven't fired it we're talking about the military coup that's taken place in the West African e-cowas nation of Niger not to be confused with Nigeria uh different countries bordering but nonetheless different and there's been a crew there just in the last week and it seems to have a lot of public support interestingly it's not too good if you're a government Minister because you've been rounded up and arrested and the uh democratically elected president is under effective house arrest in the residential Palace and it has many of those typical ingredients of a coup however it's certainly showing the signs of being more than temporary and it's got a number of signs that could indicate an escalation and all of those point to really desperate situations for the Nigerian people who are already one of the poorest nations in the world so uh there's a lot to be unhappy about in West Africa at the moment because of that situation well absolutely absolutely and I think look I want to point this out I think mentioned another conversation I had earlier in the week perhaps I've got my number slightly wrong there um there's the fact there have been over 200 recorded queues in Africa since the 1950s that's a lot um and normally it kind of signals a sort of transition of governments not to say this it's not necessarily anti-democratic because it uses you know it's a transfer from you know one kind of fail to take to another failed State um in in many cases but this one has a kind of slightly Sinister undertone I would like you the Wagner group have been operating in the region for a few years now you know unopposed um and forming allies and I think there's definitely the fingerprint of of the Wagner group on this and you know and that in the context and backdrop of the Russia Africa conference this weekend last weekend in St Petersburg um do you think that changes the the the this this narrative at the moment that will the school and see the category of it's like all our other African um cues and we'll kind of I guess you know go back to some sense of normality albeit with a slightly different head of state or is there more Church look I think it's a really good point that you raise now obviously there's a lot that we don't know and there's a lot that we're guessing about and there's a lot that we're supposed in but based on what appears to be the reality on the ground and our own interpretations of the geopolitics surrounding this event I would say that it is different to many of these African situations as I said many of the coups in Africa are they kind of fit into an almost benevolent category because it might be a dictator who has an election refuses to hand over power military comes in and they basically after operate a a true transitional government allowing for either the new letter to come in or some sort of a new process and then you get another set of Crews that are dressed up that way and have this very transient nature about them this just seems to have some more permanent ingredients as we've seen in Neighbors Mali and Burkina Faso and there's a lot at stake here and there's a lot of reasons to believe that there's a greater involvement from the partner group and potentially the Russian State as well and that's what makes it a lot more Sinister as you say Matt it doesn't whilst the pretext might be they're unhappy with the security situation and they're unhappy with the economic situation it looks more like a grab for power to reframe the regional power stakes in the area in that ecowas Sahar region of Africa yes that's kind of interesting because it was it was already I think perhaps um struggling with a again and I I sort of overlay of this kind of Islamic militancy in in West Africa I mean we saw Mali and I guess Burkina Faso as well you know having having to deal with that and here we'll see within just cases it's a big big contributor towards the French um uranium and nuclear energy program um they have you know had a big presence in there and it feels like the the kind of sentiment from this um this new most you know military leadership is we are anti-france we're declaring French language uh or we're removing the French language from you know um we are going to ban potentially ban all movement of uranium um which benefits France so there's that going on you kind of got the Islamic component in terms of Western sahil um and the security issues around that it's it's getting complicated I don't think anyone's got the answers and we'll see how this thing um plays out but these These are big questions that need to be answered and you know possibly addressed I'm intrigued to see how France reacts I'm trying and um I'm intrigued to see how does other Western Nations back France up do they back France up and of course there's a big sort of you know U.S military um base in the middle of Nigeria too so you know how does that play um against what's going on as well so it's interesting crimes there for sure well that's right and France is facing a very difficult decision here do they stay and enforce and support militarily the democratically elected president who's under under arrest at the moment and that's a commitment that's not a simple uh several week exercise uh the situation is that the can of Faso and mali's ruling military governments have both said that they will support this year if there's any foreign intervention either by the ecos alliance which is primarily Nigeria to the country south or from other actors which is clearly a reference to France so that's a protracted campaign that they would need to be prepared to engage in that of course destructs from their capacity to support the Western efforts in Ukraine and perhaps that part of Russian calculus what it's also likely to do is unleash a new wave of immigration into Europe that'll have a destabilizing effect on Europe which is probably also part of the Russian calculus um the US they'd be reluctant to get involved they've got a doctrine of not being involved in more than two conflicts of War on at any one point in time and if they were to get drawn into the Sahar region um in any official capacity then that reduces their capacity to react to a Taiwanese situation so I would expect that they won't want to get involved and they've been very careful not to use words like coup they're tiptoeing quite carefully now for various domestic regions reasons to do with provision of Aid and so forth but you know like all of these situations the real victims on the ground of the Nigerian people the ecowas alliance has already declared a range of biting sanctions there's nothing going in or out of Nigeria is a landlocked country it's a desperately poor country medicine's not getting in foods not getting in other Provisions are not getting in they they will run out of energy very soon uh so it's a desperate situation and on top of that Eco Watson's declared that they will use Force if necessary if the rapidly expiring seven day ultimatum for a return in a civilian power doesn't occur and we're not seeing any indications that that will be observed so it's uh it's looking like a very serious standoff in that area where you've got potentially three countries two of which have already got a substantial Wagner presence securing their own uh internal security and uh Nigeria backed by other ecowas Alliance countries and potentially with a role from France it's a highly volatile situation and uh I I think the opportunity for it to resolve quickly has already passed now of course we're all hoping for a quick resolution and I'd love it Matt if we come back the next time on air and there has been a resolution then unfortunately I'm not very positive about that at all yeah for sure I mean we I say for the Nigerian people we hope there's a quick resolution because they're the ones that are actually affected on the ground while there's got you know power crap um plays out um and there's us Community works at how it reacts if it reacts and when it reacts um a couple of things I got called by a journalist um yesterday discussed this and and I kind of quite bizarrely had to point something out to them um which was he was talking about the effect of this coup on African um uranium or rather Africa as a uranium um producer a provider globally and I think that's a reminding that Africa is a continent not a country um which actually failed to recognize um so this is this is we're talking about Niger here not Nigeria but we're also not talking about somebody not Africa um I think you'd definitely be um Keen to point that out um where are you how far away are you from this this uh situation remind us it's uh I think it's about four and a half thousand kilometers it's it's a totally different part of Africa it's totally distinct in terms of the geopolitical alliances and the uh military and treaty alliances the trading partners uh namibias in an anglophone part of Africa Niger is in a francophone part of Africa so it's it's thoroughly different there is a land bridge connecting the two of about four and a half thousand kilometers and apart from that they could be separate continents that's the reality of it and now what's interesting though is that you always wonder well is there any knock-on effects and I was asked that question on Twitter yesterday and I went to the main Masthead in Namibia which is aptly called the namibian and I had a look at their front page and I couldn't find anything on the coup so there's less news in the namibian sphere than there is on the BBC or Al Jazeera or even the ABC that we're looking at in Australia here so it it really is in a very different part of the world as travel as the media it's concerned yeah and they're just for countries you know namibia's never had a coup it's not an unthinkable uh the military is totally disconnected and distinct from the government there's a proper rule of law it's it'd be as unimaginable as a coup in New Zealand quite frankly now that's very different for a dynamic country like Niger it's uh gained independence in 1960 this will be the fifth successful coup that Deb had and they've had seven unsuccessful coups as well so we're talking about a very different tolerance a very different role that the military plays in society and most of the time I go to Namibia I don't even see a soldier and I mean that like you see police and you see other things that you see in a normal country but if you see someone in fatigue it's like oh there's a soldier that's interesting it's a very very different place so there's absolutely very contagion and if anything uh the only link between Niger and Namibia is it probably positions namibia's uranium industry better because it's known by the players in this market as being you know very reliable source of uranium that um that doesn't carry any of that security or political risk right okay like I don't understand you know pick one or the other here I think we want we want all of the second result because we need all of this uranium we really really do um and the thing the French would agree hopefully it gets resolved but it I kind of does put a kind of question mark on timing of the um you know for companies like obviously Global Atomic and and go BX obviously in country it's it's um less than ideal uh for them especially with um Global Atomic because they are in the process of looking at debt solution for um their complex at the moment and this well is this I guess the second occasion where perhaps that the timing hasn't worked from the first time was Eco Warriors get getting in the way to slow things down that came back on track and I think now this you know snack Banker um I've been in this situation where there's been a queue in Africa when we're kind of mid mid transaction and we've had to well down tools basically and see how it played out because there's no way a bank sent another debt provider is going to walk into a situation like this until this is also we want this result as quickly as possible and I think Global once resolved as quickly as possible positively um as well so that they can get on the business of raising the capital in the meantime obviously shareholders nervous I think the stock is down 50 percent over the last week it's about the 20th since the 25th um that is I guess unfortunate but you know one thing one of the realities of running a mining company um so we wish them well we want it to work out let's see what happens and maybe next week we'll be having a different conversation who knows um we better skip onward because we want we've got a lot to cover this week because we've been didn't catch up last week um so what are we going to think more positive news and we'll go to winner of the week hear you allocating that to onto a positive tone hmm so it's a tie this week between China who have just approved another six nuclear reactor construction starts that's after the approved 10 during calendar 2022 so we would expect that the target is 10 per year so we've probably got some more good news coming for the rest of this year as well and the other one which for a very different set of reasons um are the folks at Georgia Power who have finally connected the vocal nuclear reactor 3 to the grid so China I think it's obvious they're getting on with it what's fascinating is they're shortening the construction time they're now targeting uh between four and five years to complete a nuclear reactorist you know a large-scale gigawatt scale nuclear reactor and they've been building them consistently at about five years about 60 months on average uh you know that's very distinct from the experience that we've had at Vogel and what's really fascinating is their estimates on the cost of these six nuclear power reactors is about 2.79 billion US dollars per reactor so let's take that into an economics frame they're building at a installed Capital per kilowatt hour capacity of under 3 000 US dollars Now Matt if you go back to some of the earlier discussions we had a few years ago you'd remember that we were talking about China wanting to get under three thousand dollars uh per kilowatt hour installed capacity and what that does is that gives them an absolute advantage in the export Market uh compared with what the South Koreans are managing to do which is closer to five to six thousand dollars U.S per kilowatt hour um the Russians are doing it at about depending on where it is about five thousand dollars a kilowatt hour and then you've got Western examples which you know hugely see six to seven depending on what pound U.S exchange rate you use and then you've got the outliers which is what the Antonique crowd absolutely love like okay you're doing three in Finland and of course logo here so very clear as to why the Chinese are the winners why the Vogel team of the winners is they stuck with it they got backing that goes all the way back to Senator Perry when he was the Secretary of Energy under the Trump Administration they made the call not to abandon but to take a view on the need to finish another AP 1000 in the US and to build the first AP 1000 or first new reactor in the US in about 30 years it's been very expensive it's had extensive delays it's the stuff that dreams are made of for the anti-nuclear crowd because they can now cherry pick this ignore all of the cheap and fast reactors built in China and say Tada it's too expensive however what it's done is it's enabled the us to stay in the game it's enabled the US to maintain its nuclear industry one of the main reasons why this project was the latest because Westinghouse went broke right in the middle of it now of course Westinghouse is owned half by Brookfield Renewables and half by camaco that's going from strength to strength to strength now unless you've got a domestic nuclear power industry and you can't be an export player and unless you're an export player the US cannot temper the influence that Russia and now China are having in the global energy infrastructure Gap there's a big picture here it's a geopolitical picture and I think they're a very worthy winner joint winner By Thai with China for the for this week because they stuck with it and they finally got to the Finishing Line it's a very very interesting addition to the conversation around you know return a capital invested um and you know base State energy um and where where this puts that whole conversation in relation to some of the um news coming out with regards to you know you know wind turbines uh and solar panels and recycling issues and and the reality of the cost minus subsidies so um again I suspect um we've talked about it before we'll talk about it again um but very very interesting news indeed and my favorite bundle of the week is getting that well in a very neat segue from your earlier comments Matt bang of the week I'm going to award it to all the hapless folk who said with a great degree of authority over the last several years that Renewables will continue getting cheaper just like computer chips and it was a mantra it was presented as scientific fact and it was challenged at the time and we we said no no no and gee I can't tell you how many times you and I have said it on this show in the on the public record but we said you cannot apply Moore's law to Renewables because they require natural resources and sooner or later if you try and dig up too many natural resources compared to what Supply there is prices will go up and we were held down and of course uh science and renewable Dogma don't always go hand in hand like they should and what's happened well we've now got wind turbine prices up by about 40 percent uh which is you know bang on what we predicted so the bundle of the week goes to not only the uh the lobbyists who managed to very skillfully weave in this narrative without any real challenge but it also goes to all of those policy makers who film Hook Line and Sinker for that in their decision making now who's left carrying the can well it's in many cases the contractors who have agreed and committed to build these projects and so the very recent news is that we're seeing button fall and allstead abandoning two different projects offshore wind projects because of a 40 cost escalation uh there's a number of other examples where Siemens for example have just undertaken an extended technical review as they call it because of these significantly higher costs that are predicted to be about 40 percent now in an infrastructure project that is an acute increase and you know quite rightfully people might look at our comments and say well you know aren't you throwing stones from your glass house in the in the resources sector because you know because we've talked a lot about cost inflation and there's many a project in the mineral sector at the moment that's gone up by 40 but the difference is an infrastructure project is supposed to be locked down you're supposed to have a very very very good line of sight to your cost and your Revenue over a longer period of time and that's the whole basis as you know well Matt for the finance that then goes into an infrastructure project and if you're talking about intermittent Renewables it's also the basis that for all of the subsidies that get poured into those projects so this is disastrous it's catastrophic um and it's it's a shame because viewed accurately with the right amount of questioning and the right amount of debate we need all of these renewable sources we need offshore winds still we need solar we just need them in the right balance with the other forms of energy and instead what's happening is we've got Market distortions that are resulting in wind projects being built where they really shouldn't be and that's raising the prices for win projects that probably should be built and should be feeding into the grid and in many cases that's offshore so it's a collective bundle to a whole lot of people who've been involved in the artificial inflation of expectations from the very real and very positive contribution that intermediate Renewables can play into a balance grid through to this expectation that we can all live off 100 Renewables you know with a sprinkling of unicorn dust and you know the energy you get from rainbows well but that well well sad look it it just stuns me that you certainly talk about uh you know this this um slightly deluded expectation of what problem it and so but it it the kind of counter to that is obviously it it suggests a huge reduction in the logic applied to this and and that's when you know government needs to kind of step up and do its job properly it's meant to be they're gonna you know set the the the the the the the tone and maybe help with some incentives to deliver a cheaper energy for its populace that's the point okay it's for the benefit of the people that's why you're elected that's what your job here but when they're kind of pushing companies into a slightly again like say deluded energy Supply and and transition uh phase which is not well thought through I've got a couple of friends who you know advise governments including the French government UK government on the energy trade and they they they're pulling their hair out because it seems to be all for profit all through headlines um and not joined up thinking you know and I'm probably trying to get one of them on the show to kind of explain um what a good return on couple ambassadors for for investors but what is a good return on government's money for its people in the context of energy has to be a significant part of that Cornerstone of that the long-term certainty so anyway one for another day you can tell I get frustrated by this stuff when politicians get involved um because they they are unthinking in the worst possible way right um okay here's a question for you I like this one uh because I think it it's good it's like and okay so cow's album prom sales have gone up 13 um why what does it mean um for a cast iron prom and The Wider Market good question so because Adam from had the quarterly results this week and they there's always a lot of really interesting stuff that I'd encourage everyone to read but uh what you're referring to Matt is they've increased their sales forecast for this year by 13 percent and you might say gee well they're doing a good job but it's not that they're selling 13 more it's that their customers are saying we'll take 13 more under the existing seller on tracks and the sales of Arrangements it's not in the industry as Flex and what that really means is if you most of the uraniums still sold under long-term contracts in our sector and those contracts they're reasonably complicated commercial Arrangements where a certain volume of array of uranium is committed by the supplier to the buyer from the mining company to the utility buyer of that uranium now the utility has the option to either take a little bit less or a little bit more and that's Flex typically it's negotiated known case-by-case basis but typically in our sector that Flex is about 20 down and about 20 percent so here's what's happened across our sector over the last 10 years in the bear Market that started after 2011. the contracts that were written before Fukushima ended up being substantially higher prices and what utilities would achieve in the spot market so there was a time tip code for example called Force Major on some chemical contracts where the average price of those contracts was 112 dollars 50 a pound and at that stage uranium was trading at under 25 a pound so that gives you an example you know quite a quite a stock example of where these contracts were very high compared to what the utilities could buy so of course they took as little as they could possibly get away with and they used all of that Flex to reduce the amount of their purchase obligations under these contracts and so of course the miners like kamiko like kazadam prom they did all of their planting and all of their sales funnel planning on the basis that you know the utilities that probably take a bit less than the target amount but you know we will Flex a little bit there so all of a sudden we've had this situation where Sports come into the market it's absorbed all of the excess inventory in this sector the spot price has gone up and some of those contractual terms look really good compared to what utilities could achieve in the spot market and not only that but the utilities don't want to buy in the spot Market because they don't want to push the price up in competition with Sports and other Natural Market buyers so they want to get as much as they possibly can out of their contracts by utilizing the positive Flex here's the rub remember I said that those miners they got trained on expecting that the flex would be on the downside so they lined up their contractual commitments with a negative view of how much of the that volume would be called for under the contract now we've got an Abrupt flip the other way so in simple terms you could say that all of a sudden they're oversold by about 20 so when Kazan prom says its sales are up by 13 what it's really say is it's oversold by 13 at a time when they're experiencing difficulties getting their product out of Kazakhstan because of Russian sanctions and uh um difficulties operating Shipping Lines out of Saint Petersburg and constraints on the trans Caspian route and at a time when it's pretty well known in the sector that has Adam promised buying in the spot Market anyway they've admitted it themselves that they need to Kamikaze in a similar situation so this is a really interesting dynamic in this sector and it's an example of one of the several very important virtuous cycles that switched so sharply from a bear Market to a bull market the other one's secondary Supply when there's a whole lot of excess inventory when everyone just assumes that they can get uranium really easily in the spot Market the utilities don't think they need very much inventory and they're more likely to sell because they're getting pressured from their finance department to use their balance sheet you know why are we carrying all this uranium you're telling us that it's everywhere suddenly the excess inventory is gone there's a heightened anxiety about whether the supply is even there you get a Niger which is responsible as we discussed for five percent of the world's uranium and not only do the utilities stop selling their excess inventory but I suddenly think well maybe two years isn't enough maybe we need two and a half years of inventory we'd better start by and they buy competitively so that's another example of these cycles that can reverse very abruptly in our sector again the swing from a bear Market to a bull market is very dynamic in the uranium sector and that's one of the factors that makes it attractive to investors and one of the reasons why fund managers retail investors and even generalist investors are starting to understand that this is a sector as it switches from a bear Market to a bull market that you really need to keep your eyes on it does have the potential for some very interesting Financial gains as an investor well yeah like I think in a few minutes I'd like to talk about some knock knock on effects here so um I'm wondering what what influenced Nigeria has on um you know you know cars out on problem in in terms of you know how they how they view this where they look because we talked a few weeks ago about obviously you know say China reaching out and trying to you know buy out um and mark up all of you know all the deals that they can for for Iranian globally because I have some Tron um obviously closely linked with Russia you know Chinese um conversations it's you know I think people's expectations that most of the plans are some proms product will head east um Nisha which is what five percent of the market um potential and huge disruptions there I mean what what does this do in the minds of a utility going crikey I'm playing I've been running this close to the wire for the last few years we are running down our own inventories that are you know various um sites um or within our Fleet um you're hearing news that like this from on and from how does a buyer react to this you know what what do you think that they're now thinking perhaps they've a little bit more nervous so here's the really fascinating theme for investors right now that the average fuel buyer right now as I look at my watch which it's it's in the morning your time is there wondering what to have for lunch because they're on holiday they're on vacation it's August in the northern hemisphere so the industry isn't doing much at all that'll change very abruptly in September and that's why this sector has a very strong seasonality aspect from September through to the rest of the year because fuel buyers and other Market participants Traders all the rest of them they go on holiday or vacation in August and then we come back in September and they all regroup in London for World nuclear Association symposium the difference is this year they're going to be regrouping and thinking well is that is that is that is that and having already come from the space of understanding that the wheel has turned and we're now in a deficit environment we're in a scarcity environment we're in a need for more diversification get away from Russia they're then going to be confronted with working their way through potentially by September we've got more clarity on what's happening in Nigeria uh there'll still be question marks over how much Supply can get out of Kazakhstan they'll be getting their heads around delayed financings of emerging greenfields projects such as we've talked about and my anticipation is that that will be a very Dynamic week in London as all of the market participants start to gain through this now here's the the fascinating thing for investors to answer your question you know what a utility Shield buyers thinking apart from the fact that they're on vacation they they don't tend to react to speculation they're not investors they want to see the evidence they might be looking at Niger saying that's really fascinating that's a dangerous situation but they won't react until they know so the Nigerian government has said as you mentioned before that they will block uranium exports to France okay the utilities fuel buyer they will say well let's wait until we know if the uranium is getting out of there or not and in any case if they block it for two weeks if even if they block it for a month it doesn't really make much difference as long as it gets out eventually investors of course we we're trained to react to speculation because that's how we make returns we make predictions better than the rest of the market and we make outside returns in that way so the real impact of all of this both the kazadam prom announcement Kamika is very bullish commentary uh from there quarterly and this situation in Niger is will it operate to start the investor flows into the physical uranium funds and that method is a good segue into our moon shots or fizzers for the week definitely definitely so what is this going to do for you physical uranium funds we you know their expectation was that the massive impact on the market and they have rightly price continues to drive forward inventory continues to be marked up but they only work in certain trading conditions right um so what's what's your view on say for instance Niger uh on all of what they say spurt for instance so far what it's done is it has increased interest in the ETFs uh and we're seeing flows of funds into the EHS now that benefits the constituent companies in that index so Bannerman the company that I'm with for example where in all four of the ETFs so any money that goes into an ETF a portion of that Finds Its way into uh the bids on the ASX that uh move our share price but some of that also goes directly into sport as a constituent holding within those ETFs now also we're seeing the gap between the nav discount that's been prevalent for months now with sport narrowly so this broad physical uranium trust over the last several weeks it's averaged about an 11 discount to net asset value in other words you can buy sport at 11 cheaper than the underlying uranium active current spot price that that represents that's now closed to um day before yesterday it was five and a half percent we've seen yellow cake close even more to around three percent for example so it's starting to get to the conditions where it just needs a little bit of an uptick in investor sentiment and if sport starts trading at a premium it will issue new units and it will use those New Year that's to buy uranium in the spot Market and the market is so conditioned to understanding what happens next which is the spot price it's very tight out there spot price will go up that'll create more investor interest that'll create more pressure on sports share price given the opportunity to issue new units they buy more uranium and so we go good so that's the question that's why it's either a moon shot or it's possible that there's a resolution in Niger or investors lose interest and it just Fizzles out and we've got to wait until September for the Dynamics that I described to catch on and interestingly the major consultants in this sector including uxc which is traditionally been quite conservative they're saying quite outwardly these events in Nigeria will lead to an increase in the uranium price so the question now is to what extent are investors going to front run that by positioning themselves in the likes of sput and yellow cake and some of the other vehicles and will that start up this uh spot price uh increase ahead of everyone understanding the collective impact of all of these Dynamics which you'll probably be in September at the world nuclear Association Symposium and I'll see you there I'll see you there Branson um and we've got we've got cities I mean that's about Point well made you know you sort of recognize the emotion in investing in the motion in the market in terms of a driver um and even if Niger situation sorts itself out there's this nagging that will sit in the back of the minds of um certainly Utilities in terms of maybe where they look for their pounds um in the future look I'm going to finish off here I quite a there's humorous one is there's a tweets of the week um we'll put it we'll obviously you know we'll put it up up here but what are we looking at so it's a it's a tweet it's interesting for a couple reasons so it's by someone I've never come across before um Johan Christian solid if I've got that pronunciation run apologies if I've mangled it so what Johannes put up is and yeah okay great we've got it on the screen now biomass is green energy it's a you know very it's a satirical cartoon and what's interesting about this is Johan has a couple of thousand followers and this tweet has gone massively viral it's had more than 1 326 retweets um you know thousands of likes and what that tells me is it's really hit a nerve with people so we were talking before about intermittent Renewables and the the crime of intermittent Renewables is not the technology itself it's the outlandish expectations that lobbyists and other Market participants have used to manipulate the collective psyche into expectations that are increasingly apparently just not realistic thus Renewables in a totally different category is a large proportion of bioenergy which I'm not going to be the only one even saying this but a lot of people say it's an outright fraud to try and treat biomass and not all of it but many of those categories as a green energy it's Hocus Pocus it's it's uh it's out it's dishonest it just put it in the kindest possible way it's dishonest and that's what this tweet captures and that's why it's been retweeted so many times because it's capturing and increasing Collective conscience yeah I I think I thought it was hilarious I mean I haven't seen it until we discussed that um but it you're right it's it's as insane as the I think we talked a couple of weeks ago with a similar tweet with and the these Scottish government having they cut down whatever it was 13 million trees to build wind farms what were they thinking and in this case this is a sector which we looked at about 10 years ago didn't make sense then it doesn't make sense now um we got together grip boys and girls it's not about short-term game this is about you know providing energy to the people at affordable rates so it doesn't paralyze them and affect their lives negatively so if we can get on with that they're politicians that would be much appreciated um Brandon um we better wrap it up there that's been a good good session um didn't see last week you're busy um I also know you put out it but I don't know I I kind of I saw the note you put out to shareholders we talk in there about the market has been sort of quiet it's a very kind of quiet period as you say you know on uh holiday um or taking a break anyway um the markets are just taking a breather as well you know we've seen very little fact I think on the recent uh rate increase um uh I think maybe people are thinking where we're at the bottom dealing like we're at the bottom now but your note to your shareholders are saying look we need some patience in the market we've talked about it before I think other CEOs to look just need a bit of patience in the market and you reframed it as strategically patient what did you mean by that well it's one thing to be patient but patient uh needs to have advantages and here they're very clear because we're on a trajectory of further firming further tension in the market all of the signs are that uranium prices are going up all of the signs are increasing demand almost every week we've got another story of Supply reductions or Supply forward expectations decreasing so that's all fabulous it's just not reflected in the current price so patience has a very clear benefit however you need to be very careful that that patients can also have a cost and for public companies that cost can be quite profound for example companies who are two patient run out of money every day of the week on the stock exchange so the note to shareholders with really setting out how we've strategically set the company up to be able to have that patience so that we can enter the market at the time that we think is right without any of those costs and as you read Matt I just outlined the the three key factors in maintaining strategic patients the first one is not having any arbitrary deadlights not promising anyone that you're going to be in production by a certain point yes you can give guidance and it's good to give everyone a flavor for it but we've been careful not to put deadlines and Milestones in front of us that we feel compelled to hit the second one is having the cash we've got 42 and a half million dollars in the backyard cash Burns very uh constrained and I'll put some numbers in there I'll quarterly cash burn was a couple of million dollars so that buys us all of the time that we need to choose the timing ourselves not be forced by our own cash balance it also gives us the money to progress what we need to with our engineering so that we can keep the project moving forward um even though we've completed our definitive feasibility study and then the final thing is not so well understood by most investors but when you've got a very Advanced shovel ready project like Bannerman's a Tango project it's important that you don't let the engineering go stale it's important that you don't go out and get a whole lot of prices on your construction costs on your equipment and everything else and then just let those prices sit and go out of date and so I talked in the note about the really clever things that we've been doing with wood PLC our lead engineers and also Gavin Chamberlain who's our you know amazing Chief Operating Officer who you've met uh that the steps that we've taken to make sure that we're absolutely optimizing that and we're not falling into any traps of letting that engineering go stale or otherwise um uh letting those numbers start to become questionable so we're doing we're doing that really well and so that gives us that patience everything that's within our control we're controlling well and we're progressing and we're happy with and the thing that's outside about control which is how quickly this Market adjusts to the very obvious positive Dynamics well we'll wait and we'll be patient and there's no there's no cost to the business of doing that because of the Strategic steps that we've taken

Channel: Crux Investor

Views: 12,743

Keywords: mining, gold, nickel, cobalt, uranium, vanadium, lithium, precious metals, crux investor, cruxinvestor, silver, TSX, ASX, AIM, LSE, investing in uranium, investing in mining, investing in stocks, investing in stocks for beginners, investing in gold, invest in stocks, invest in stocks for beginners, invest in gold, invest in mining, analyst's notes, analysts notes, analyst notes, battery metals, electric vehicles, net zero, carbon neutral, carbon credits, nuclear, best mining stocks, TSXV

Id: L5PCRxlH8Xw

Length: 47min 37sec (2857 seconds)

Published: Fri Aug 04 2023