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Uranium & Cameco (etf: URA/ U.t, CCJ / CCO.t)

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Uranium Stocks, the Ideal time to Buy? (when they are cheap, & set to take-off)

URA / Global X Uranium ETF ... All-data : 5-years : 2-yrs : 6-mos / 10-d : vs-CCO.t : CCO.t ;

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U-related ... Weekly : 2-yr : 6mo :

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Why the Uranium Price Must Go Up

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Rick Mills Rick Mills of Ahead of the Herd

The Trump Administration is at it again. On July 18, the financial press got hold of a story that said the next target of the Trump tariffs is likely to be the uranium/nuclear energy sector. In what looks like a repeat of what happened with steel and aluminum, the White House said it would investigate whether uranium imports threaten national security, given how dependent the United States is on the nuclear fuel. If the sector is threatened—and why wouldn't it be, where 90% of the uranium needed for American nuclear reactors comes from abroad—import tariffs would likely be imposed.

If that happens, it would hurt nuclear power plants, who are already struggling with low electricity prices and flat demand, Bloomberg noted in reporting the story.

But this isn't really about national security, or in legal terms, section 232 of the 1962 Trade Expansion Act, which allows the U.S. government to impose tariffs without a vote by Congress if imports are deemed a national security threat. Section 232 was used to slap 25% tariffs on steel imports and 10% on imports of aluminum in March.

It's about two U.S. uranium producers who are fed up competing with state-owned companies in Russia and Kazakhstan (i.e., Rosatom and Kazatomprom). Energy Fuels Inc. (EFR:TSX; UUUU:NYSE.American) and Ur-Energy Inc. (URG:NYSE.MKT; URE:TSX) petitioned the government in January for the probe. Notably absent from the complaint was Uranium Energy Corp. (UEC:NYSE.MKT), which mines uranium in the United States and Paraguay and processes it in Texas.

Since they supply less than 5% of the uranium needed for U.S. nuclear power plants, Energy Fuels and Ur-Energy feel threatened, and want protection. Are they likely to find a sympathetic ear in the U.S. government? You bet. Despite the prices of practically everything made from imported steel and aluminum going up, including of course, cars (GM is already losing money), this government doesn't seem to get the fact that slapping tariffs on strategic metals that are in short local supply will hurt domestic industries that must buy those raw materials from abroad.

If the complaint is successful, two things could happen: a "buy American" quota that limits uranium imports and reserves 25% of the market for domestic production, or a requirement that utilities purchasing nuclear power buy U.S. uranium. We'll address the likely impact of section 232 on the uranium market in another section, but the truth is, 232 is a red herring.

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It's a distraction from what is really going on with uranium, which is the setting up of an extremely bullish scenario for uranium investors due to supply shortages in the face of high demand for the nuclear fuel as a result of the ever-growing need for clean power globally. The supply-demand imbalance will mean higher prices. This article will explain how this will come about, and why now is an excellent time to be investing in junior uranium companies that offer the greatest leverage to a rising commodity price.

Demand picture

Demand for uranium, of course, is directly tied to the need for nuclear power, which is growing exponentially especially in Asia due to the problems with air pollution from coal-fired power plants. The global demand for electricity is expected to increase by 76% by 2030, and while everyone knows about the electric vehicle "revolution," what is not often talked about is how will all that extra power be generated. Much of it will have to come from nuclear.

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There are currently 452 operating nuclear reactors and 56 new ones under construction globally. According to the World Nuclear Association, China with its appalling air pollution is the leader with 17 new reactors under construction and 184 planned or proposed. Up until recently Japan was out of the nuclear mix, with all but a handful of nuclear reactors shut down for safety checks following damage to the Fukushima Daiichi plant during the 2011 earthquake/tsunami. But Japan, which has no oil and gas of its own and depends heavily on nuclear, now has nine reactors back in operation—a tripling from 2017—and aims for nuclear to represent just under a quarter of its power mix by 2050. Japan's Abe Administration is pro-nuclear. Russia is building nine new reactors and India is constructing seven.

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A 2015 chart from Thomas Drolet, head of Drolet & Associates Energy Services, was extremely accurate

According to nuclear consultant UxC, this means the global capacity for nuclear power is expected to grow by 27% between 2015 and 2030. And that means a whole lot more uranium. How much? UxC estimates annual uranium demand will spike by nearly 60%, from the current 190 million pounds of U3O8 to 300 million pounds by 2030.

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September 2017, Uranium Participation Corporation

But there's a problem. Uranium supply has been steadily dropping since 2016. That year total mined supply was around 163 million pounds, in 2017 it was 154 million, and this year it's estimated to be under 135 million. With current U3O8 demand at 192 million pounds, that leaves a shortfall of at least 57 million pounds. More on why that is in the next section, but first, it's important to understand uncovered uranium demand.

Uncovered demand

Nuclear utilities buy uranium on long-term contracts, in order to lock in the price. These contracts usually last four to 10 years. The long-term demand for uranium is calculated by figuring out utilities' requirements for U3O8 that is not covered by contracts. This is known as uncovered demand. According to UxC, uncovered uranium demand is projected to increase by up to 54 million pounds by 2020, or just under a third of total demand that year. Then it just keeps rising: 150 million pounds in 2025, 179 million pounds by 2030. That 179 million pounds of uncovered demand is actually 16 million pounds more U3O8 than total mined production predicted for that year.

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UxC Uranium Market Outlook Q3 2017

Why is this important? Because it means utilities will have to start negotiating long-term contracts soon, in order to prevent themselves being in a situation where their requirements are uncovered. If not, they will have to buy uranium on the spot market to have enough nuclear fuel. The trend since 2010 has been for utilities to buy a greater percentage of material on the spot market, with lower volumes contracted. This means contracting will have to increase in the very near future. By 2025 almost two-thirds of existing contracts will expire.

Supply picture

At current prices, about three-quarters of uranium mines are uneconomic. This is why several large uranium mines have shut down recently. In 2017, operations at Cameco Corp.'s (CCO:TSX; CCJ:NYSE) McArthur River/Key River were suspended. Rabbit Lake was shut down in 2016. State-owned producer Kazatomprom announced it will cut 20% of its production over the next three years, all in the hope that decreased supply will lift uranium prices beyond the $20-something range per pound, which is below the cost of production. The effect was to give a short-term boost to the uranium spot price. Recently the Kazakh Energy Minister suggested that there would be another 6% production cut, to 56.2 million pounds.

Since 2016, between 30 and 33 million pounds of mined uranium has been curtailed, representing about 23% of global production.

Conclusion

The uranium price is going to rise and when it does, uranium explorers, producers and investors are going to get taken for a very exciting ride. The uranium market is looking at a perfect storm of factors that are very good for U investors right now. Despite its perceived risks, nuclear is a green form of power generation that is emissions-free. The return to nuclear power for uranium-dependent Japan is already happening. The global demand for U3O8 is very likely to increase not only due to that 76% figure mentioned at the top, but because of the need for more power to run electric vehicles. When EVs are plugged in, where does the power come from to recharge them?

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A bear market in uranium since 2012 has dropped the price to a point where uranium is no longer profitable to mine for most producers. Hence the shutdowns of major uranium mines like McArthur River, Langer Heinrich, and curtailment of production from Kazatomprom. On top of that, big funds are emerging to buy uranium from the spot market. Top producers like Cameco are also buying from spot in order to keep fulfilling its long-term contracts despite cutting production. In the next seven years three-quarters of uranium contracts will expire. Re-contracting will have to take place before then, or before all the uranium in the spot market disappears. Utilities need to re-sign long-term contracts to ensure their uncovered demands are met, and as shown above, uncovered demand is increasing.

The shift in the spot market is key; with so much buying going to come into the spot market, it's only a matter of time before the price responds in kind.

I've got restricted uranium supply due to shutdowns and depleted mines, steady demand due to global electrification needs and EVs, heavy buying on the spot market and a select junior uranium explorer (juniors historically offer the most leverage to a rising commodity price) on my radar screen.

Richard (Rick) Mills
aheadoftheherd.com

> more: https://www.streetwisereports.com/article/2018/08/13/why-the-uranium-price-must-go-up.html

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From page-1

Uranium Price ... Monthly : Weekly : Daily : $27.50 / Brent ($80.87) = R-34.0%

U.T / CAD ($4.69/1.296)= $3.62 /27.50= 13.2% ... US$3.62/80.87= 4.48%

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U.t / Uranium Part.Cert. ... all :

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Will U follow the lead of Oil (USO) ?

U - etc ... update :

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Uranium market brightens as output cutbacks tighten supplies MarketWatch

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U "playing catch-up" ... to CCO's recent strength

U.t

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Ratio

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Chasing Fusion

Billionaires Chase ‘SpaceX Moment’ for the Holy Grail of Energy

(Bloomberg) -- Not long before he died, tech visionary Paul Allen traveled to the south of France for a personal tour of a 35-country quest to replicate the workings of the Sun. The goal is to one day produce clean, almost limitless energy by fusing atoms together rather than splitting them apart.

The Microsoft Corp. co-founder said he wanted to view the early stages of the International Thermonuclear Experimental Reactor in Cadarache firsthand, to witness preparations “for the birth of a star on Earth.”

Allen wasn’t just a bystander in the hunt for the holy grail of nuclear power. He was among a growing number of ultra-rich clean-energy advocates pouring money into startups that are rushing to produce the first commercially viable fusion reactor long before the $23 billion ITER program’s mid-century forecast.

Jeff Bezos, Bill Gates and Peter Thiel are just three of the billionaires chasing what the late physicist Stephen Hawking called humankind’s most promising technology. Scientists have long known that fusion has the potential to revolutionize the energy industry, but development costs have been too high for all but a handful of governments and investors. Recent advances in exotic materials, 3D printing, machine learning and data processing are all changing that.

“It’s the SpaceX moment for fusion,” said Christofer Mowry, who runs the Bezos-backed General Fusion Inc. near Vancouver, Canada. He was referring to Elon Musk’s reusable-rocket maker. “If you care about climate change you have to care about the timescale and not just the ultimate solution. Governments aren’t working with the urgency needed.”

The company Allen supported, TAE Technologies, stood alone when it was incorporated as Tri-Alpha Energy two decades ago. Now it has at least two dozen rivals, many funded by investors with a track record of disruption. As a result, there’s been an explosion of discoveries that are driving the kind of competition needed for a transformational breakthrough, according to Mowry.

One of the clearest measures of progress in the field was on display last week in Gandhinagar, India, where the Vienna-based International Atomic Energy Agency held its biennial fusion forum. The conference highlighted a record 800 peer-reviewed research papers, 60 percent more than a decade ago.

Billionaires Chase ‘SpaceX Moment’ for the Holy Grail of Energy

Fusion itself isn’t the problem. The tricky part is generating more energy than is used in the process. Such reactors have to mimic conditions found only in deep space, a much more complex and costly endeavor than fission. Heating plasma to temperatures higher than stars and then containing the ensuing reactions inside cryogenic cooling vessels can require a million parts or more.

. . .

And then there’s Musk, a serial innovator who thinks the whole fusion crowd is barking up the wrong tree. In a weed-and-whiskey podcast that went viral last month, the Tesla and Solar City co-founder said smart money like his is better spent on finding more efficient ways to capture the Sun’s energy than on trying to recreate it.

“We’ve got a giant thermonuclear reactor in the sky,” Musk said. “It shows up every day very reliably. If you can generate solar panels and store it with batteries, you can have it 24-hours a day.”

> MORE: https://www.bloombergquint.com/technology/nuclear-fusion-financed-by-billionaires-bill-gates-jeff-bezos#gs.kcXnPS4

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Weaker Oil prices have helped to stall the Uranium Rally

U.t vs: URA, CCO.T & USO/Oil ... update

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==

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URANIUM's Top Producer, Cameco Corp

CCJ / Cameco ... all-data : 10yr : 5yr :

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: 5yr : A Nice Golden Cross is in place

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==

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Uranium stocks may be ready to Rock

Supply is down due to mine closures by Cameco & in Khazkastan.

Demand rising as six Japanese reactors are ready to reopen in 2019. After 5 reopened in 2018.

URA vs. U.t and CCJ ... 3yr -

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URA / Global X Uranium ETF ... all / Last: $12.61 +0.16

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U.t / Uranium Participation Fund ... all / Last: $4.74

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... here's the largest, the uranium "blue chip" that I own already

CCJ / Cameco Corp ... all / Last: $12.42 +0.20

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Cameco produces around 15% of the world’s uranium. It operates two of the highest-quality uranium mines in the world. Both are located in Canada’s Athabasca Basin. And the quality of the uranium there is 100x better than the global average.

This allows Cameco to produce uranium for less than its competitors. Most companies mine it for $50–$60/lb. Cameco does it for around $35/lb.

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Top Uranium New Stories > source View RSS Feed  
 

With the United States and India agreeing to set up six American nuclear power reactors in India, the decks have been cleared for Westinghouse Electric (WEC), which emerged from Chapter 11 bankruptcy protection last August, to initiate the sale of six AP-1000 reactors for a proposed project in coastal Andhra Pradesh.

The agreement follows two days of talks in Washington and comes in the backdrop of simmering trade tensions between the US and India.

In a joint statement Wednesday, the US and India said they had agreed to strengthen security and civil nuclear cooperation, including the proposal for building six US nuclear reactor units in India. The talks involved Foreign Secretary Vijay Gokhale and Andrea Thompson, US Under Secretary for Arms Control and International Security.

The Green New Deal Can’t Succeed Without Nuclear

There are 99 nuclear reactors in the US. They generate twice as much clean energy as every solar panel, wind turbine, and other clean energy source combined.

Excluding nuclear, clean energy sources like solar and wind make up 17% of America’s energy needs. Getting that to 100% by 2030 without nuclear is impossible.

For one, it would cost trillions of dollars.

Also, we need energy sources that are dependable and “always on.” This is a major problem for solar and wind.

Solar power is interrupted by darkness and clouds. Wind turbines only work when the wind blows. That’s why solar generates power only 25% of the time and wind 35% of the time.

This Is How the Uranium Sector Collapsed

As you likely know, nuclear power plants use uranium as fuel to produce electricity.

But the uranium sector has collapsed since 2011.

It began with the freak accident in Fukushima, Japan. First, the most powerful earthquake in Japan’s history caused a reactor to shut down. Then a tsunami disabled the emergency generators.

This caused a disastrous nuclear meltdown that contaminated a large area and killed and injured many people.

Japan shut down all but two of its reactors after the Fukushima disaster. Many other countries followed suit.

Germany moved to phase out nuclear power completely. And plans to build four new reactors in America were shelved.

Uranium Demand Plunged and Its Price Cratered 86%

This led to the vast majority of uranium companies shutting their doors.

In 2011, there were 585 uranium companies. Just 40 remain operational today. And most of the survivors have seen their stocks plunge 90% or worse.

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Energy Prices are on the Upswing once again - chart updated to 3/15/2019

U.t vs USO/Oil, etc. update: 10d / U.t: $4.74 +0.01, USO: $12.20 -0.02, CCJ: $12.42 +0.20 , URA: $12.61 +0.16

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Will the U price squirt higher now? ... U-price chart

U.t vs CCO.t ... update : 10d / Last: $4.74 +0.01, $12.42 +0.20

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: 10d : w/URA :

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Uranium: the bull market has already started - LWM, 26-Feb-19

One important point to notice is that the uranium cycle is not like the mineral coal and other commodities, which can be mined and delivered in a short period of time. Uranium takes in between 1.5 to 2 years to be mined, converted, enriched, assembled and delivered – so it is normal that utilities keep a large inventory. By the way, the current average inventory held by utilities is the lowest it has been in many decades.

On top of that, inventories are not so straight forward as they are in other commodities. Some of the inventory is held as strategic reserves (which are not meant to be sold), some is held as depleted tails (which would require a much higher uranium price to become mobile) and some are in different formats (U3O8, UF6, etc). According to UxC, there was last year something like 17-35 million pounds of uranium classified as a mobile inventory – this number, although impressive, is less than the deficit between production and demand for last year (this year the gap should widen even more).

Nuclear reactors are very expensive to build and, once in operation, fuel (uranium) is a very small component of their cost. Therefore, the risk of not having the fuel is way higher than the risk of overpaying for it. I would go as far as saying the price is almost irrelevant for utilities. What they need is the certainty that they will have the material at the time arranged and in the right specifications.

Many people are not paying attention to the sector and think it is in a clear decay. But I think differently. I believe this is the single best investment opportunity in the markets at the moment. It is one in which the relationship between risk and return is extremely favourable

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Cameco is Confident

Cameco Well Positioned to Self-manage its Financial Risks; 2019 Outlook Unchanged

March 1, 2019 / Cameco (TSX: CCO; NYSE: CCJ) reaffirms its ability to meet its financial obligations and self-manage risk, despite the recent downgrade in its credit rating.

“We are disappointed by the ratings downgrade. Our 2018 results and our outlook for 2019 are as expected, but the deliberate decisions we have made to strengthen the company for the long-term come with some near-term costs, which impact our credit metrics,” said Grant Isaac, Cameco’s senior vice-president and CFO. “We have done what we said we would do, and have been transparent and clear about the near-term costs associated with our actions. While we continue to navigate by our investment-grade rating, we will not abandon our strategy in the interest of improving near-term financial metrics at the expense of creating long-term value.”

Cameco has taken a number of deliberate actions to reduce supply and streamline operations, which have allowed us to preserve the value of our tier-one assets and build more than $1 billion dollars of cash on our balance sheet. We expect these actions will also allow the company to continue to generate positive cash flow in 2019, and will provide us with the option to retire the $500 million in debt maturing this year, or more aggressively reduce the debt on our balance sheet if it makes sense to do so. There are some near-term costs associated with our actions, like care and maintenance costs, but we expect the benefit over the long term will far outweigh those costs.

Cameco’s 2019 outlook remains unchanged and, as noted in our annual management’s discussion and analysis, there are a number of factors that could result in significant upside to that outlook. Some of the more notable items are:

  • The results of the investigation under the Section 232 Trade Expansion Act in the US, and the potential impact on the uranium market and uranium prices.
  • A potential cost award from the Tax Court of Canada based on the unequivocal win in our case with Canada Revenue Agency, where we have applied for costs of $38 million.
  • A potential award for damages from the TEPCO arbitration panel, where we are seeking about $700 million US.

> https://www.cameco.com/media/news/cameco-well-positioned-to-self-manage-its-financial-risks-2019-outlook-unchanged

  • Cameco Reports Fourth Quarter and 2018 Financial Results

    News Releases / 2018 Q4

    Cameco (TSX: CCO; NYSE: CCJ) today reported its consolidated financial and operating results for the fourth quarter and year ended December 31, 2018 in accordance with International Financial Reporting Standards (IFRS).

    Summary of 2018 results and developments:

    2018 performance in line with outlook provided; net earnings of $166 million; adjusted net earnings of $211 million: As expected, production was lower than 2017 due to the suspension of production at McArthur River/Key Lake and the change in reporting for Inkai. In 2018, we undertook a number of deliberate and disciplined actions, which resulted in lower direct administration and exploration costs, lower capital expenditures and $1.1 billion in cash on our balance sheet largely as a result of our inventory drawdown. McArthur River/Key Lake suspended for indeterminate duration: On July 25, 2018, we, along with our partner Orano, announced the extended shutdown of McArthur River/Key Lake for an indeterminate duration removing 18 million pounds (100% basis) annually from the market. The action resulted in the permanent layoff of approximately 520 site employees. A reduced workforce of approximately 200 employees remain at the sites to keep the facilities in a state of safe care and maintenance. We incurred approximately $29 million in severance costs as a result of the permanent layoffs. Our share of the cash and non-cash costs to maintain both operations during the suspension is expected to range between $7 million and $9 million per month. In addition, to further decrease costs, the workforce at our corporate office was reduced by approximately 150 positions, resulting in severance costs of approximately $14 million.

    Read full story

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Uranium-related shares compared

URA -etc. update: $12.61, CCO/Cameco $16.56, PDN/Paladin $.165: LAM/Laramide $.365, FCU/Fission $.495

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Sym : Price: MktCap EntVal : Ebitda : EV/eb.: Earns : PER-: Div. : Yield : BkVal : P/BV :
Cco.t 16.56: $6.55b: $6.95M $617.M : r: 11.1: $0.42: 39.4 : $0.08 : 0.49%: 12.62: 131% :
Nxe.t $2.27: $790M: $828M: (24.6M): r: N/a : (0.05): 00.0 : N/a— : 0.00%: $0.47: 482% :
pdn.t $.165: $289M: $336.M (47.7M): r: 00.0 : $0.24: 00.0 : N/a— : N/a— : $0.12: 132% :
Fcu.t: .495 : $241.M  $219.M (5.37M) (r: 40.1): (0.04) 00.0 : N/a— : N/a— : $0.67:  74% :
Lam.t .365 : $49.4M $56.8M (1.82M) (r: 31.3): (0.01) 00.0 : N/a— : N/a— : $0.54:  68% :
Other
Gold : 13.01: $22.7b : $29.4B: $3.06b: r:9.60 :  (1.32): N/a- : $0.16 : 1.22%: $6.50: 200%:
NEM : 33.15: $17.7b : $20.2B: $2.74b: r:7.36 : $0.64: 51.8 : $0.56 : 1.68%: 19.70 : 168%:

 

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THREATENING to Breakout over $30 & over C$5 for U.t / US$4

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Uranium Prices are near key resistance at $29.50-$30 ($30 /7.66 = US$3.92)

Uranium ... update : U-st : Last: $27.25 /C$ 4.74= r5.75 (4.74 x 0.75= US$3.55: x7.66)

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U.t vs USO etc. update / Last: C$4.74 /UPDATE : URPTF: $3.55 -- /USO ($12.20): r-29.1%

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TRPTF (u.t in US$) ... update: 10d : w/etc / Last: $3.55 / H.ofYr: $3.90

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Alex Molyneux: Uranium Will Continue to Climb Higher

> link: https://palisade-research.com/alex-molyneux-uranium-will-continue-to-climb-higher/

Alex discusses his career and experience working with Robert Friedland, Ivanhoe and Paladin Energy. Uranium contracts can distort the actual value of uranium and price action lately has been driven by KazAtomProm and Cameco. Utilities will only be able to push off signing new contracts for a short while then the market is going to become much more interesting as these unwind. Higher prices are required to maintain existing supply while much higher rates will be necessary for any increase in demand.

Time Stamp References:
0:45 – Alex’s career in finance and mining.
1:50 – His opportunity from Robert Friedland.
4:30 – Restructuring Paladin Energy.
6:50 – His uranium fund.
8:50 – Outlook for uranium.
11:00 – Cameco’s inventory levels and uranium supply.
14:00 – KazAtomProm
15:45 – Uranium supply and potential deficits.
17:30 – Supply contract structures.
22:00 – Shorter contracts.
23:30 – Utilities have to renew soon.
25:00 – $50 Uranium need to maintain supply.

28:00 – His focus on particular commodities.
29:00 – Why lead may be a good opportunity.
30:10 – Galena Mining Limited

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Kazatomprom sees further uranium tightness

The Kazakh uranium miner produced 7.6 million pounds of U3O8 in the December quarter, taking its full-year attributable production to 29.8Mlb, a 7% fall year-on-year and in line with its plan to keep 20% below permitted output. Kazatomprom’s London listing means it now has to put out quarterly total and attributable production numbers, although the …

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Interesting comments on the Uranium market here - from my old friend Marc Henderson

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Laramide Resources Ltd. CEO Update | August 2018

Dear fellow shareholder,

It has been almost nine months since my previous CEO message, which was titled “Why Uranium, Why Laramide, Why Now?” and while the macro environment has evolved much as we expected and discussed in that piece, timing of the uranium market’s rebalancing – and more critically for investors the magic “inflection point”:  where people feel emboldened to jump in – remains the great unknown.

In light of the fact that the bear market in uranium is now well into its seventh year, the sage words of legendary baseball manager Casey Stengel to “Never make predictions, especially about the future” would seem to be particularly appropriate advice for uranium company CEOs.  While we at Laramide are mindful of this advice given the numerous false starts that have been endured on the road to price recovery for the sector, something does seem to be different this time and things may finally be falling into place at last.

Another baseball legend Yogi Berra famously said, “You can observe a lot just by watching,” and it seems worth highlighting some of the key macro developments that uranium watchers would have been able to observe in just the past few months. These include:

  • Significant supply curtailments by multiple producers (Kazakhs, Paladin, Cameco);
  • Reduced US government inventory sales;
  • Accelerating Japanese reactor restarts;
  • Existing public market vehicles (U Participation Corp) and new public market vehicles (Yellowcake PLC, Tribeca) purchasing large spot market volumes;
  • A potential late 2018 IPO of Kazatomprom, the world’s largest U producer; and,
  • Possible pro industry policy action in the United States in the form of domestic quotas or targets for US based production.

While every one of these developments is welcome and constructive towards the market rebalancing narrative, taken together it’s hard not to believe that something may indeed be different this time – especially since we have positive catalysts on both the supply AND demand sides of the equation.

The positive long-term picture in uranium remains largely unchanged since China made the decision in the early 2000s to adopt nuclear power in a meaningful way so what caused the epic bear market we have endured for the last 7+ years and what will end it? To simplify things, we believe what has occurred is the colliding forces of a serious demand “shock” (the Fukushima event when Japan turned off all of its nuclear plants at once) combined with a simultaneous supply shock in the form of a massive (and untimely) production expansion from Kazatomprom – a nation state supplier more interested in market share gains than profit maximization.  

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What seems to be developing now, and what creates cause for optimism, is that the market impacts of these two events have largely run their course, especially given the aggressive proactive actions taken recently on the supply side by industry leaders Cameco and Kazatomprom. The Cameco action is particularly noteworthy and will, in our opinion, be the most determinative in changing the market trend from bear to bull.  

On July 25, 2018 Cameco updated the status of the McArthur River Mine shutdown (originally disclosed in November, 2017) and announced a decision to suspend production indefinitely. Of almost equal importance in their announcement – at least to prospective producers like Laramide – was that Cameco said McArthur would not reopen until mine production could be restarted on the strength of new long-term contracts with utilities. Given that McArthur River accounts for 11% of global annual uranium production (supplying almost 1.5 million pounds per month) it is hard to see how this action will not  accelerate the market rebalancing already underway.

The other recent macro development of particular note to Laramide is the acceptance on July 18, 2018 by the US Commerce Department of a Section 232 petition under the Trade Expansion Act. In the petition, filed by two U.S. uranium companies, quotas were sought which would require 25% of U.S. uranium requirements to be sourced domestically. While it is not possible to predict any outcomes of this trade action at present, any movement towards production support for US projects would almost certainly be a material positive for Laramide given the relative scarcity of existing US domiciled mines and late stage uranium projects.  In our estimation, there are no more than 6 or 7 public companies with any potential to deliver near to medium term uranium to US utilities and none appear to be as attractively valued as Laramide today on a comparative in-ground resource valuation metric.

Part of Laramide’s modest valuation relative to this US peer group may be explained by the equity overhang which was created this year when Global X – the industry’s largest ETF (symbol URA on NYSE) and previously the Company’s largest shareholder – decided to complete a widely publicized portfolio rebalancing strategy. This strategy necessitated reducing the weighting of smaller capitalization uranium equities like LAM in favor of larger capitalization global companies more tied to the nuclear business generally.  This impacted the share performance of almost every peer group company but we were particularly affected since our modest capitalization made us ineligible for inclusion going forward.

We elected to be proactive in assisting this rebalancing exercise and are pleased to report that, in early August, all of Global X’s shares were acquired by new holders, including new institutional owners, all of whom share our constructive view on the immediate prospects for the uranium sector.

We are not alone in this positive view and it is heartening to see brokerage industry and media interest pick up, including recent coverage by the likes of Bloomberg and the Wall Street Journal.

Although not mainstream media we particularly like the overview provided by a UK business journal called MoneyWeek (and not only because we rated a mention) with their cover story on July 5, 2018 called Nuclear melt-up: Catch the uranium boom early. A pithy title and if Yogi Berra were to summarize the author’s conclusions it would along the lines of “it could be déjà vu all over again.”  Here’s hoping….

We attach a copy of that article for your reading pleasure.

Marc Henderson
President, CEO and Director
Laramide Resources Ltd.

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LAM.t / Laramide Resources ... All : 10yr: 5yr: 2yr: 6mo / 10d - Last: C$0.355

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About Laramide Resources:

Laramide Resources Ltd., headquartered in Toronto and listed on the TSX: LAM and ASX: LAM, is engaged in the exploration and development of high-quality uranium assets. Laramide’s portfolio of advanced uranium projects have been chosen for their production potential. Major U.S. assets include the Churchrock and Crownpoint In Situ Recovery (ISR) projects and La Jara Mesa in Grants, New Mexico, as well as La Sal in the Lisbon Valley district of Utah. The recently acquired Churchrock and Crownpoint properties, with near-term development potential and significant mineral resources, form a leading ISR division operating in a tier one jurisdiction with enhanced overall project economics. The Company’s Australian advanced stage Westmoreland is one of the largest projects currently held by a junior mining company.

Summary (2018): Why Uranium, Why Laramide, Why Now?

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TRPTF Uranium (u.t in US$) ... update: 4yr : 10d : w/etc : HOURS AHEAD:w/OilB

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HOURS AHEAD:w/OilB /  Last: $3.55 / H.ofYr: $3.90

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/ added in edit 3/27- TRPTF4yr : Good support at US$3.25? /

mpf98Lv.gif

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A Uranium MISS? So far...

My Bullish attitude towards Uranium is a MISS so far

U-t/ Uranium... 4-yr : w/URA : at C$4.40, broke the 252d.MA. may be headed to 377d MA, nr. $??

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U-t, etc: ... update : 10d : $4.40 -$0.06, vs. URA ($12.64), CCJ ($11.92), etc

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LAM fell to C$0.335

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ENERGY: Pushing from both sides!

Oil, UP!, Uranium, Down!

Uranium-URPTF (U.t in USD) vs Oil (USO) ... 4yr : fr. 3/18/2015 : $3.27 & $12.47 : r-26.2%

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Ratio: $3.27 & $12.47 : r-26.2%

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At /Near the BOTTOM of Trading Ranges?

URA / Uranium Shares etf ... update : Last $12.49 +0.09

URA / Global X Uranium ETF ... All-data : 5-years : 2-yrs : 6-mos / 10-d : vs-CCO.t : CCO.t ; 

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U.T /Uranium, etc. ... 6-mo : fr. 9/30/2018 - Last: C$4.46  +0.02  (12mo. Range: $3.70 - 5.14)

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THIS CHART suggests that U.T may find support a little lower, like r-7.1 to r-7.2

rDJKErN.png

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LAM gets a bid

0.385  +0.02, +5.48%
Open: 0.365 /    High: 0.395 / Low: 0.355 / Volume: 182,120

chart ...update : 10d etc :

GRiReJ5.gif

 

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Trade Genius Report - Uranium Stocks are Making Moves

 

Perhaps some think US producers are a better short term bet? All boats ( without to many holes) will rise with the tide, but US producers with permitted mines and producition capabilities is perhaps a very good near term bet with 232 possibly a big price catalyst. 

Find it strange

That T.EFR and T.URE share prices are up and holding.  And yet T.LAM with US properties going that could be producing by 2020 is dropping ?   Why is this?
 
+ According to Canadian Insider, there were over 1 million LAM shares that were in a short position as of March 15. https://www.canadianinsider.com/company?ticker=LAM 
+ Might be some short covering soon.   Some interest on the buy this morning.

Uraniums are starting to wake

T.LAM looks ready.   Can’t wait till we are done with the .30’s.

T.LAM back in the .40’s

See ya .30’s!
+ I thought we might see more of a short squeeze to at least .45.  But “Anonymous” just seems to keep showing up with shares and whacking it every time the price increases

Read more at https://stockhouse.com/companies/bullboard#xoeDqHyw0BcbAoXQ.99

In 2017 near the bottom of the bear market, (now ) sold one of their last good assets: Church Rock & Crownpoint In NM. 50mil+ lbs ISR. Marc Henderson of Laramide was there with cash. These stories can make junior miner speculators a lot of 💰.

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Uranium price, last at $25.85 - that's 7.8 times URPTF ($3.313)

I6QaYAr.png

Uranium Prices (in US$) have become cheap vs. rising Brent Oil (now over $70)

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As URA, Uranium Shares rose, Uranium got relatively cheaper too

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