Before you start reading, let me tell you this: There's a lot of text down there. A lot. But I wouldn't have written if I didn't see it worthy of your time and if i hadn't my skin in the game fully and openly.
First, take a look at this picture. What does it tell you?
https://preview.redd.it/bcuhfquxz6l61.jpg?width=750&format=pjpg&auto=webp&s=57ae2f9a747ba3bfc172de033b7f665d7b995ccf
I've been doing research on uranium for two years now - ever widening my perception on the most undervalued and frowned upon commodity and fuel we've got. Yes, the fuel of nuclear power plants.
For me that picture tells that there's a huge, order of magnitude size correction and price discovery happening in uranium quite soon.
Uranium is not a GameStop. It's no AMC or Nokia either. It's the fuel that keeps our lights on, refrigerators cool and Teslas rolling. It's what makes GameStop, AMC and Nokia roll. You get the picture.
Uranium's price will eventually go above and beyond anything we've seen yet and I'm about to explain why this is happening.
It'll require not only diamond hands, but STAR HANDS to hodl because this isn't going to happen to over night, it'll happen in due time when markets and participants of uranium sector find out what's coming to them:
Inbalance in supply and demand - the real force behind price movement.
Why is uranium worth of your attention and time/effort put in research? Simply because there is no other play out there with such a huge potential in short term. No silver, no copper, no gold, no Tesla, no Bitcoin, nothing. Well, maybe Bitcoin, but beyond that nothing else.
Take a look at the picture again to see the potential we're talking about.
There's no other commodity that is so mission critical it's a security issue for many countries in a way that acquiring it is A MUST - or there won't be electricity anymore and part of a society/country would collapse/malfunction. It's a lifeline, security issue, political influence and baseload for countries.
Uranium is probably the most opaque sector there is. Also probably one of the deepest there is regarding research. It's a whole unique supply chain from uranium mine to a utility's reactor, from conversion to UF6 to enrichment and assembling of the rods. But let's not go there this time - that's not too relevant for the investment case.
Uranium comes in two prices, spot-price and long-term contracts price. Spot price is the price you pay as carrier/trader/middle-men while trying to find a buyer for excess supply of uranium. Long-term price is the price utilities pay to a uranium mine when they sign long-term off-take contracts lasting usually about 10 years.
And this is where the fun and investment thesis starts: Way too many of western utilities are at the end of their contract cycles and are about return to negotiation tables in 0-5 years time. Annual demand for uranium is ~180 million pounds but it's estimated that deficit for 2021 is already around 40 million pounds.
Kuva
There is no new substantial production coming online in next 1-3 years and during next 5-10 years four of world's biggest uranium mines are going to close down due to depletion of resources.
Let it sink in for while.
There is no new production coming online due to depressed uranium spot-prices. And the deficit will grow even worse during next 5 years.
At the time of writing this uranium price is around $30/lbs. Especially junior mining companies need uranium price around ~$50-60/lbs in order for them to first acquire funding and only after that start building their mines. That's because their AISC, all-in sustaining costs, are around those numbers - and lenders and stakeholders know this since according to JORC Code miners have to state these figures. No shareholder of a mining company would allow management to sell their only income producing asset below price levels that are sustainable.
https://ycharts.com/indicators/uranium_spot_price
"But nuclear power is dead, it's not green because of waste and countries will close their uranium power plants soon." This is the narrative people unfamiliar and/or against nuclear power hang themselves into since they are unwilling to hear the truth that has been clouded for several reasons.
First of all, nuclear power isn't going away - in fact there are more reactors coming online, being built, planned and proposed than in decades. China has finally realized they won't be able to reduce carbon emissions without nuclear power (since it doesn't produce any emissions) and they are rapidly ramping up their reactor building capacity. Same goes with India and Russia. Even Saudi Arabia is planning on building 16 reactors. France is prolonging lifespan of it's oldest reactors, utilities in USA has withdrawn their intentions on closing down reactors.
https://preview.redd.it/q9aaju1t07l61.jpg?width=1146&format=pjpg&auto=webp&s=2753e985a773cf561d75a8eeb3442e07ec89cc7b
You can verify this yourself by taking a look at this World Nuclear Energy Association's sheet https://www.world-nuclear.org/information-library/facts-and-figures/world-nuclear-power-reactors-and-uranium-requireme.aspx
Meanwhile coal power is indirectly killing around 5 million people annually, renewables have turned out to be a disaster in Germany and California because they cannot act as baseload energy supply when there's no wind or sunshine and there aren't sufficient enough battery technology available yet to store the excess energy generated during surplus times.
https://twitter.com/ShellenbergerMD/status/1357692503554621440
https://www.forbes.com/sites/michaelshellenberger/2019/05/06/the-reason-renewables-cant-power-modern-civilization-is-because-they-were-never-meant-to/?sh=36ec9d76ea2b
Nuclear energy cannot be replaced if we want our societies continue to prosper and people living in them have lives worth living.
https://preview.redd.it/bjpurq7u07l61.jpg?width=890&format=pjpg&auto=webp&s=9aed3c51acd0b4a100fb9be96921afc5ea495a5e
Here's the investment thesis eye-opener: last time, during 2007-2008 bull run, there was NO real deficit - only impending one. This time there is real deficit. It makes complete difference, fully and totally.
World needs uranium. And there isn't enough of it above ground right now - especially since more and more reactors are being built, and we haven't even seen SMRs yet.
Not enough uranium - lights go off. And prices through the stratosphere.
Okay, so the investment case is there and it's solid - too much ever growing demand and not enough production. But why would you invest in very very very risky junior uranium mines without a real mine online and only project papers and piece of land in their pockets? There's gotta be something else, right?
Yes, there are two companies involved in holding uranium directly.
But because bull market will rise all the boats, and especially those junior mines if they are able to survive and withstand the long lasting bear market in-between. That's how you define a company worthwhile considering adding to your portfolio.
Not only will junior mining companies' share prices rise, but they are leveraged plays on commodity price movements. The better the company - bigger reserves and better grade - the bigger the leverage on assumed or, even better, realized profits.
In short, share price of uranium company will multiply according to uranium spot price movement.
No need to buy complicated calls or puts. Just take a look at mines, learn about the industry and world meanwhile, and invest.
Take a look at these miningstockeducation.com videos from few years back and listen to what author Bill Powers has to say about investing in junior mining stocks. After these videos everything makes sense:
https://www.youtube.com/watch?v=7SW96tD9Kdg&t=2s
https://www.youtube.com/watch?v=lx-6iDxuThA
Here's comprehensive list of uranium mining companies:
https://preview.redd.it/6wxd74oj07l61.png?width=1653&format=png&auto=webp&s=787ac47e99c8b1e848f2325a482eddf33c135b57
As of writing this, i've invested in
-Global Atomic
-Boss Resources
-Bannerman Resources
-Denison Mines
-GoviEx
-Energy Fuels
-Blue Sky Uranium
-Standard Uranium
-Western Uranium and Vanadium
I'd love to own few more companies, but I consider these among the best ones out there.
Oh, and you don't have to take my word for it. Go and check out John Quakes' or Uranium Insider's Twitters on this matter to find out more:
https://twitter.com/quakes99 , https://twitter.com/quakes99/status/1367324676477784066
https://twitter.com/uraniuminsider
Mike Alkin and Timothy Chilleri at Sachem Cove have done the most profound and deepest research on uranium, SmithWeekly covers uranium in their in-depth analysis and reports. You can search for these people on YouTube.
I'm just a nobody with my primary uranium portfolio up around +300% from inception. I have no track record, only two uranium portfolios (with a little bit of silver and copper added on top) and trying to change my life for good.
And cycle is only about to start turning.
Why am I telling all this? I _know_ people who literally changed course of their lives during 2007-2008 bull run totally. All they needed to do was to hold on to their uranium portfolio and sell just before peak. I wish nothing but the best for regular people like you and I.
No need to pump and dump.
Buy, HODL and sell all of them at price you seem fit for your strategy.
Live happy and wealthy life.
No need to thank me, doing this in order to give back.
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