Spot Uranium breaks $100 again after 16 years
Spot Uranium breaks $100 again after 16 years
A short update on my September 13th post…
Dear friends,
Several readers have reached out in the last weeks, cheering the good call on Uranium, and I’m glad it worked out this well!
Spot price reached $100 for the first time in 16 years, and last night Sprott Physical Uranium Trust closed at exactly double my entry price from fall 2021 (to the cent), up +40% since my first post.
The thesis has not changed in my opinion:
Demand:
demand for physical uranium is accelerating as the main fuel for nuclear energy, which is incresingly accepted as a key to zero carbon economies worldwide
inefficient demand on the utilities side with usually national or governemental buyers with lower incentive to either price or hedge correctly
increasing demand from financial players (and even retail) through trusts like Sprott’s which reached $6Bn in assets this week, trading at 5% discount to NAV
Supply:
limited supply with depleted above ground inventories and new mines taking much time and hassle to come online
geopolitical uncertainity on supply, with a large chunk of it coming out of Kazakhstan, Niger etc…
Nice charts:
Bought Nov 2021, wrote Sep 2023:
One thing changed though, Uranium is now mainstream:
Department of Energy on January 9, 2024: DOE Announces Next Steps to Build Domestic Uranium Supply for Advanced Nuclear Reactors As Part of President Biden’s Investing in America Agenda
Reuters on January 9, 2024: US seeks to jump-start production of higher-energy uranium now made in Russia
Financial Times on January 4, 2024: Hot uranium threatens a meltdown for Western energy security using an Homer Simpson illustration as well (although, yes it’s plutonium…)
Wall Street Journal on December 14, 2023: Uranium Is Finally Running Hot, and Miners Can’t Keep Up
December 1, 2023 At COP28, Countries Launch Declaration to Triple Nuclear Energy Capacity by 2050, Recognizing the Key Role of Nuclear Energy in Reaching Net Zero
My first post from Sep 13th 2023:
Disclaimer
I’ve been long since fall 2021:
- up +100% so far with Physical Uranium (U-UN.TO)
- up +11% so far with GLOBAL X URANIUM ETF (URA)
I’m selling URA and buying into pure miners (better late than never), so URNM & URNJ. Also considering Yellow Cake PLC to diversify a bit from Sprott, and benefiting from a slightlty higher discount to NAV (12% vs 5%).
None of the information provided in this letter constitutes financial advice. This is intended for entertainment, education and general information only. Appart from being long those instruments, we have no affiliation with those products or the companies managing them.
About me:
Victor Martin (twitter | linkedin) managing director @ le tapyr SA
I support family offices in mastering highly diversifed portfolios in the whole spectrum of classes, with a focus on private equity, venture capital (direct & funds) & hedge funds.