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1、Everything you need to know about uranium!Uranium Report 2022DisclaimerDear reader,Please read the complete disclaimer in the fol-lowing pages carefully before you start reading this Swiss Resource Capital Publication.By using this Swiss Resource Capital Publication you agree that you have completel
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3、rectly own and/or indirectly own shares of following Companies which are described in this publication:Anfield Energy,Blue Sky Uranium,Consolidated Urani-um,GoviEx Uranium,Labrador Uranium,Skyhar-bour Resources,Uranium Energy,Uranium Roy-alty.Swiss Resource Capital AG has closed IR consultant contra
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44、e-serve estimates,grade,ore recovery that differs from the estimates,the success of future explorati-on and drill programs,the reliability of the drill,sample and analytical data,the assumptions regar-ding the accuracy of the representativeness of the mineralization,the success of the planned metall
45、ur-gical test work,the significant deviation of capital and operating costs from the estimates,failure to receive necessary government approval and en-vironmental permits or other project permits,chan-ges of foreign exchange rates,fluctuations of com-modity prices,delays by project developments and
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48、of the supplier,the refineries and other parties that are doing business with the company;the insufficient insurance coverage or the failure to receive insurance coverage to cover these risks and dangers,the relationship with employees;relationships with and the demands from the local communities an
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96、 Contents|Imprint.07Preface.09Uranium is unstoppable:The renaissance of nuclear power as the most important base-load energy source has already started.10Interview with Dr.Christian Schrer Manager of the Uranium Resources Fund and Partner of Incrementum AG .20Interview with Scott Melbye CEO of Urani
97、um Royalty,Executive Vice President of Uranium Energy and Ex-Advisor tothe CEO of Kazatomprom.26Company Profiles Anfield Energy.32 Blue Sky Uranium.36Consolidated Uranium.40GoviEx Uranium.44Labrador Uranium.48Skyharbour Resources.52Uranium Energy.56Uranium Royalty.60EditorSwiss Resource Capital AG P
98、oststr.19100 Herisau,Schweiz Tel:+41 71 354 8501Fax:+41 71 560 4271inforesource-capital.ch www.resource-capital.chEditorial staffJochen StaigerTim RdelLayout/DesignFrauke DeutschAll rights reserved.Reprinting material by copying in electronic form is not permitted.Editorial Deadline:09/30/2022Cover:
99、shutterstock_1037107573Back:#1:BlueSky Uranium#2: images and graphics are,unless otherwise stated,by the companies.Charts:10/06/2022von JS Charts by amChartsImprintYou do not have to be a stock market professional to make wise investment decisions.Invest together with Swiss Resource Capital AG and A
100、sset Management Switzerland AG in the mega-trend commodities.Since 05.03.2020 the experts specialist knowledge has been available as a Wikifolio certificate:SRC Mining&Special Situations ZertifikatISIN:DE000LS9PQA9WKN:LS9PQA Currency:CHF/Euro*Certificate fee:0,95%p.a.Performance fee:15%We recommend
101、that interested parties and potential investors obtain comprehensive information before making an investment decision.In particular,about the potential risks and rewards of the security.You are about to purchase a product that is not simple and can be difficult to understand.Further,important inform
102、ation can be found at:www.resource-capital.ch/de/disclaimer-agb*Trading in Euro is possible at the Euwax in Stuttgart.Invest with the commodity professionalsCurrently the following titles are represented in the SRC Mining&Special Situations Certificate(10/2022):AGNICO EAGLE MINES|ALPHA LITHIUM CORP.
103、|ANGLO AMERICAN|ARIS MNG.CORP.|AURANIA RESOURCES|BARRICK GOLD|BHP BILLITON|CALEDONIA MINING|CALI-BRE MINING|CANADA NICKEL|CHESAPEAKE GOLD|CONDOR GOLD|CONSOLIDATED URANIUM|COPPER MOUNTAIN MINING|CYPRESS DEVELOPMENT|DENARIUS METALS CORPORATION|DISCOVERY SILVER CORP.|ENDEAVOUR SILVER|FRANCO-NEVADA|FREE
104、PORT-MCMORAN|FURY GOLD MINES|GOLD ROYALTY CORP.|GOLD TERRA RESOURCE|GOLDMINING|HANNAN METALS|ISOENERGY|KARORA RESOURCES|KUTCHO COPPER|LABRADOR URANIUM INC.|LI-METAL CORP.|MAG SILVER|MAPLE GOLD MINES|MAWSON GOLD|MEDMIRA INC.|NEWMONT GOLDCORP|OCEANAGOLD|OSISKO GOLD ROYALTIES|PETROBRAS(ADR)|REVIVAL GOL
105、D|RIO TINTO|SATURN OIL&GAS|SIBANYE STILLWATER|SKEENA RESOUR-CES|SUMMA SILVER CORP.|TIER ONE SILVER INC.|TORQ RESOURCES INC.|TRILLIUM GOLD MINES|TUDOR GOLD|URANIUM ENERGY|VICTORIA GOLD|VIZSLA SILVER9Dear Readers,With this edition of the Uranium Report 2022,we are already in the sixth year of this spe
106、cial report series.And we are now right on target,because uranium has recently shown a lot of relative strength,which can be seen in the great imbalance of falling supply and rising demand at the same time.First and foremost,the uranium ETF Sprott Physical Uranium Trust,but also other mar-ket player
107、s ensured that the uranium spot market was literally swept dry,the spot price rose to over US$60 per pound and the shares of many uranium stocks also shot up.The purpose of these new types of uranium ETFs is very simple:in addition to creating an opportunity for investors to pro-fit directly from th
108、e price of uranium,the main aim is to take uranium off the spot market and to force demand-side utilities into negotiations on new long-term cont-racts.Uranium and nuclear energy have never been as valuable as they are today.Russia is cutting off Europes energy supply,and nuclear power is a way out
109、of the dilemma,even if the German government has so far shown a total inability to act.Because wi-thout emission-free and at the same time base-load capable nuclear power,which is based on the fuel“uranium,many coun-tries will not only have a huge problem in the stable basic energy supply and,due to
110、 the electromobility revolution,a real power supply problem in itself,but will completely lose sight of the goal of a world that is as CO2-free as possible.In the future,so-called Small Modular Re-actors(SMRs)will play an increasingly im-portant role.These are nuclear fission reac-tors that are smal
111、ler than conventional re-actors and can be manufactured in a factory and then transported to an assem-bly site.Investors such as Buffett and Gates have long recognized that solar and wind power will not be able to meet baseload require-ments until adequately large storage facili-ties for electricity
112、 from renewable energy sources are created,and they have provi-Prefaceded the corresponding funds for research and construction of SMRs.This report is intended to provide interested investors with an overview of the uranium industry and the real facts.Of course,we also present some interes-ting comp
113、anies in the industry with facts and figures.This is to be understood as a suggestion and not as a recommendation to buy,as there are only very few listed companies left at all.Raw materials are the basis of our entire economic life.Without raw materials,there are no products,no technical innovation
114、s and no real economic life.We need a relia-ble and constant basic energy supply for our highly industrialized world.Swiss Resource Capital AG has made it its business to provide interested people with comprehensive information about metals,commodities and various listed mining com-panies.On our web
115、site www.resource-capi-tal.ch you will find more than 35 companies from various commodity sectors as well as a lot of information and articles about commo-dities.With our special reports we want to give you insights and inform you comprehensi-vely.In addition,you always have the chan-ce to inform yo
116、urself free of charge through our two commodity IPTV channels www.Commodity-TV.net&www.Rohstoff-TV.net.For the mobile everyday life,you can down-load our newly developed Commodity-TV App for iPhone and Android on your smart-phone.Here you will get real-time charts,stock prices,indices and the latest
117、 videos automatically on your cell phone.My team and I hope you enjoy reading the Special Report Uranium and we hope to provide you with lots of new information,impressi-ons and ideas.Yours,Jochen StaigerThe whole world of commodities in one App:Commodity-TV CEO and expert interviews Site-Visit-Vide
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119、:Jochen Staiger is founder and CEO of Swiss Resource Capital AG,located in Herisau,Switzerland.As chief-editor and founder of the first two resource IP-TV-channels Commodity-TV and its German counterpart Rohstoff-TV,he reports about companies,experts,fund managers and various themes around the inter
120、national mining business and the correspondent metals.Tim Rdel is Manager Newsletter,Threads&Special Reports at SRC AG.He has been active in thecommodities sector for more than15 years and accompaniedseveral chief-editor positions,e.g.at Rohstoff-Spiegel,Rohstoff-Woche,Rohstoffraketen,the publicatio
121、ns Wahrer Wohlstand and First Mover.He owns an enormous commodityexpertise and a wide-spreadnetwork within the whole resource sector.1011Uranium is unstoppable:The renaissance of nuclear power as the most im-portant base-load energy source has already startedNuclear power is currently on everyones l
122、ips.And this not only in Germany,which tends to be a nuclear power-phobe,but also worldwide.In view of numerous unsol-ved problems regarding the current and fu-ture energy supply from sources that are as CO2-free as possible,as well as unsolved dependency scenarios above all Europes dependency on no
123、n-European gas the al-most emission-free generation of electricity by means of nuclear fission is experiencing a true renaissance.China is once again one step ahead here and is planning to build 10 nuclear power reactors per year.But India,soon to be the country with the largest po-pulation,as well
124、as established nuclear po-wer nations such as Japan,Great Britain,France and the USA are also working on recommissioning,extending the operating lives of or building new nuclear reactors which,as the only regenerative energy source,can constantly supply emissi-on-free electricity at the same high le
125、vel(see the box Base load capability,what is it?).In the future,the focus will no longer be on the familiar,large nuclear reactors,but on far smaller reactors that can be ma-nufactured in factories on a modular basis and installed at almost any desired locati-on.Several of these so-called Small Mo-d
126、ular Reactors“SMRs for short are al-ready in the construction phase.Two of them are already in operation.It is precisely this flexibility that should ensure an explosi-on in demand in the future for the raw ma-terial that is essential for nuclear fission:uranium.Nuclear power has already received an
127、 ad-ditional boost from the European Commis-sions decision at the beginning of 2022 to give nuclear energy a climate label“and to include it in the so-called Taxonomy Regu-lation,which is intended to stimulate bil-lions of euros of investment in green ener-gies.In addition,Russia enriches a good 45%
128、of the worlds uranium production and will now be out of business as a supplier for many countries.On the other hand,many uranium producers have sharply reduced their production in recent years and even acted as buyers themselves alongside ETFs,funds and countries such as the USA.This has recently cr
129、eated a supply deficit of more than 50 million pounds of U3O8 per year.Accordingly,the inventories of many energy suppliers(utilities)have been exhau-sted,so that they now have to come back to the negotiating table and conclude new long-term supply contracts.This naturally opens up excellent oppor-t
130、unities for interested shareholders to parti-cipate in the uranium market.Some interes-ting investment opportunities can be found in this report.Base load capability,what is it?Base load capability is the ability of a power plant to provide continuous,reliable electrical power.This inclu-des nuclear
131、 power plants,coal-fired power plants,gas-fired power plants,oil-fired power plants and steam po-wer plants fired with substitute fuels.Combined heat and power plants,biomass and biogas power plants can also be base-load capable under certain conditions,although fossil or renewable raw materials mus
132、t also be fired for this purpose.The only base-load-capable electricity gene-ration from renewable energy is by means of hydroelectric power plants,but this often requires a major inter-vention in nature.Due to their often strongly fluctuating generation and thus feed-in,photo-voltaic and wind power
133、 plants are not base-load capable,at least not until adequate storage media are available.Uranium price development over the last 5 years(source:own presentation)The number of nuclear power reac-tors worldwide continues to increa-seSince the beginning of 2022,5 new nuclear power reactors have been c
134、onnected to the grid worldwide,while 4 smaller reactors have been permanently taken offline.At the same time,construction began on 6 new reactors.At the end of September 2022,33 nations were operating 426 reactors with a total net electrical capacity of approxima-tely 381.4 gigawatts.In the past 10
135、years alone,67 new reactors have been connec-ted to the grid worldwide.The USA is currently the leading nuclear power nation with 92 reactors in operation.However,emerging countries such as Chi-Overview of reactors currently under construction(blue)and the corresponding net electrical output(light b
136、lue)per country.(Source:www.iaea.org/PRIS)na and India are in particular need of more and more energy and have been focusing on a massive expansion of their nuclear po-wer capacities for some time now.It is the-refore not surprising that 57 additional nuc-lear reactors with a total net electrical ou
137、t-put of around 59 gigawatts are currently under construction 18 of them in China alone.Planning has already been comple-ted for around 120 additional ones,and more than 300 others are in the pipeline.Overview of currently operating reactors(blue)and net electrical power(light blue).(Source:www.iaea
138、.org/PRIS)1213According to the International Atomic Ener-gy Agency(IAEA),the largest uranium ore reserves are in the USA,Niger,Australia,Kazakhstan,Namibia,South Africa,Cana-da,Brazil,Russia,Ukraine and Uzbekistan.Uranium miningIn uranium mining,a distinction is basically made between two processes:
139、Conventio-nal extraction and extraction by in-situ lea-ching or in-situ recovery(ISR).The exact extraction method depends on the charac-teristics of the ore body,such as depth,shape,ore content,tectonics,type of sur-rounding rock and other factors.Conventional productionThe majority of uranium is ex
140、tracted by deep mining.The deposits are accessed via shafts,adits,ramps or spirals.Problems are often posed by the penetration of mine water and the so-called ventilation(techni-cal measures to supply mines with fresh air).The exact mining method is chosen ac-cording to the characteristics of the de
141、po-sit.Above all,the shape of the ore body and the distribution of the uranium in it are deci-sive.In deep mining,an ore body can be mined in a targeted manner,resulting in much less overburden than in open pit mi-ning.Near-surface or very large ore bodies are preferably extracted by open-pit mining
142、.This allows the use of cost-effective lar-ge-scale technology.Modern open pits can be from a few meters to over 1,000 meters deep and several kilometers in diameter.Open pit mining often produces large quan-tities of overburden.As in deep mining,lar-ge quantities of water may have to be lifted for
143、an open pit,but ventilation is less of a problem.ISR ProductionIn the ISR method,water and small amounts of CO2 and oxygen are injected into the sandstone layers with the help of so-called injection wells,the uranium is extracted and pumped back to the surface for further pro-cessing with the help o
144、f so-called recovery wells.The entire process therefore takes place completely underground.The advan-tages of this process are therefore obvious:there is no need for major earthmoving as in open-pit operations,and there are no tailings piles or discharge ponds for heavy metals and cyanides.Only the
145、wells are vi-Only with uranium are nuclear fission chain reactions commercially possible Uranium is named after the planet Uranus and is a chemical element with the element symbol U and the atomic number 92.Urani-um is a metal whose all isotopes are radi-oactive.Naturally occurring uranium in mi-ner
146、als consists of about 99.3%isotope 238U and 0.7%235U.Uranium factsSchmelzpunkt 1133 CSiedepunkt 3930 CURN 5f36d17s2 92URANThe uranium isotope 235U is fissionable by thermal neutrons and thus,apart from the extremely rare plutonium isotope 239Pu,is the only known naturally occurring nuclide with whic
147、h nuclear fission chain reactions are possible.For this reason,it is used as a primary energy source in nuclear power plants and nuclear weapons.OccurrenceUranium does not occur in pure form in na-ture,but always in oxygenated minerals.The-re are a total of about 230 uranium minerals that can be of
148、local economic importance.There is a wide range of uranium deposits from magmatic hydrothermal to sedimentary types.The highest uranium grades are achieved in unconformity-bound deposits with average uranium grades of 0.3 to 20%.The highest grades are over 70%U3O8!sible on the surface,and the land a
149、round the wells can continue to be farmed without restrictions.The ISR process also makes low-grade deposits economically mineable,and capital costs for mine development are greatly reduced.Moreover,the entire pro-cess can be carried out with a minimum of labor,which also drastically reduces opera-t
150、ional costs.According to a study by the World Nuclear Association,25%of uranium mined outside Kazakhstan recently came from ISR mines.The current demand situation 180 million pounds of U3O8 per year.The USA extends power plant lifeti-mesWith 92 reactors,the USA has by far the largest active nuclear
151、power plant fleet in the world.Nevertheless,the USA is threa-tened with a collapse in energy supply.The United States is still the country with the highest per capita consumption of electricity in the world.Thus,the U.S.has no choice but to increase the number of its nuclear reactors in the coming y
152、ears.Ac-cordingly,the expansion of the nuclear po-wer plant fleet is also part of the Green New Deal“initiated by President Biden,which is intended to lead the country to-ward CO2 neutrality.Alongside the expan-sion of wind and solar energy,nuclear po-wer is the top priority.In recent years,more tha
153、n 60 U.S.nuclear reactors have applied for lifetime extensi-ons to 60 years of total operation.In addi-tion,there are about 40 applications for the construction of new nuclear power plants.Currently,2 plants are under cons-truction,and another 20 are in the concre-te planning phase.China continues t
154、o ignite the turboFor several years now,it has been China that has been setting the pace in the con-struction of nuclear power plants.55 reac-tors with a total net electrical capacity of 52.2 gigawatts are operated by the Middle Kingdom,which until now has primarily used coal to generate electricity
155、.Of these,17 new reactors alone have been commis-sioned since the beginning of 2018.Nucle-ar power expansion in China is therefore enormous and taking place at breathta-king speed!It is expected that China will soon replace France(56 reactors)as the current number two in nuclear power.The Chinese go
156、vernment plans to build more than 80 new nuclear reactors in the next 15 years and over 230 new nuclear reactors by 2050.By 2030,a total of 110 1415Overview of reactors currently in operation(blue),reactors currently shut down(gray)and reactors under construction(light blue).Source:www.iaea.org/PRIS
157、Overview of the age of currently operating reactors.Many will(have to)be replaced by more powerful ones in the coming years.Source:www.iaea.org/PRISreactors are to be connected to the grid,which will mean that the USA will have been replaced as the current leader.A total of 16 nuclear reactors are c
158、urrently under construction.India second in expansionIndia,the worlds second most populous nation,plans to expand its nuclear energy capacity by 70 gigawatts.Currently,a total of 22 Indian nuclear reac-tors are running at full load(6.8 gigawatts).One of them was newly connected to the grid in 2022.C
159、urrently,6 nuclear reactors are under construction in India,with 40 more to fol-low by 2050.Russia with increasing nuclear capacityRussia has also announced a massive ex-pansion of its nuclear power plants.The country currently operates 37 nuclear re-actors with about 27.7 gigawatts.4 plants are in
160、the construction phase.In addition,Russia plans to build more than 40 additi-onal nuclear power plants,which will in-crease the share of nuclear energy in Rus-sias energy mix from the current 15%to more than 20%.Japan wants to return to full capa-city utilizationOnce the worlds second-largest nuclea
161、r power producer,Japan is already opera-ting 21 of its former 50 reactors again ele-ven years after the Fukushima disaster.These have undergone a strict safety pro-tocol and are already running at full capa-city again.At least 12 more reactors could follow in the coming months.These are currently be
162、ing brought up to the latest technical standard and put through their paces.2 reactors are under construction.Japan is also planning to extend the ope-rating lives of existing nuclear power plants to over 60 years.The goal is to generate around 22 percent of electricity from nuc-lear power by 2030.B
163、efore Fukushima,the share was 30 percent,but in 2020 it was only five percent.Increasing global expansion of nuclear energyIn addition to the 33 nations(including Taiwan)that already have nuclear reactors on the grid,17 countries have nuclear po-wer plants under construction.These in-clude Argentina
164、,Bangladesh,Slovakia and Turkey.Other countries,such as Egypt,Jordan and Indonesia,are planning to build several reactors in the coming years.Modular small power plants to dominate in the futureA huge future growth market for uranium is currently emerging.It involves so-called Small Modular Reactors
165、“SMRs for short.These are small 5300-megawatt units that can be built in a modular fashion in a factory and moved to the eventual de-ployment site.These scalable units can provide carbon-free benefits while compe-ting on cost with cheap natural gas or die-sel and can coexist with grid-intensive re-n
166、ewables due to their load-sensing cha-racteristics and zero-emission operation.The individual SMR units have a capacity of less than 300 megawatts and can ope-rate for 3 to 5 years without fuel reloads without interruption.They are very similar to the compact reactors that have safely powered aircra
167、ft carriers and submarines since the 1950s,and can be ideally marke-ted for smaller grids,island states,or re-mote locations(including mining and mili-tary bases).Very significant progress has already been made in government support for these innovative,carbon-free energy sources in the United Kingd
168、om,Canada,and the United States.Among others,Microsoft founder Bill Ga-tes is also working with one of his compa-nies on the development of such small re-actors and is pushing the construction of a corresponding plant in Wyoming,which is to replace a coal-fired power plant there.Gates company,TerraP
169、ower,is to have a sodium-cooled fast reactor with a capacity of 345 megawatts.Using molten salt sto-rage technology,the plants output can be increased to 500 MW for more than five and a half hours if needed,supplying pow-er to about 400,000 homes.An existing example of such a power plant is the Akad
170、emik Lomonosov,which Russia commissioned in 2019 as a floating power plant in northern Siberia.A huge market that could cause uranium demand to skyrocket in the future.A total of 5 such small reactors are cur-rently under construction worldwide,3 of them in China.One reactor was connected to the gri
171、d by China in December 2021.6 are in the licensing phase,and around 50 more are in the planning or design phase.At present,France and the Czech Republic in particular are pushing ahead with the expansion of an SMR fleet.Nuclear power operators are forced to conclude new supply contractsThe previous
172、cycle of contracting,domina-ted by the uranium price spikes of 2007 and 2010,has led plant operators to enter into contracts with higher price levels and very long terms of around 8 to 10 years.On the one hand,these old contracts are expiring,but on the other hand,plant ope-rators have not yet looke
173、d for replace-ments for these supply volumes.As a re-sult,the forward contracts of the plant operators are declining sharply,and thus the demand volumes for which there is not yet a contractual obligation,but which will have to be contractually secured in the fu-ture,are also increasing.Unmet demand
174、 is expected to exceed one billion pounds of U3O8 over the next 10 years.At the same time,more than 75%of expected reactor demand through 2025 is not contractually secured.For a thinly traded commodity such as uranium,this return to more nor-mal“long-term contracts is likely to put tremendous pressu
175、re on both long-term and spot prices.There are therefore now increasing signals among international plant operators towards more buying acti-vity.1617The current supply situation 130 million pounds of U3O8 per year.Uranium production in sharp declineIn 2021,around 130 million pounds of U3O8 were pro
176、duced from mines worldwide.This was significantly less than at the peak in 2016,when more than 160 million pounds of U3O8 were produced.Deposits are stable There is an acceptable range at higher uranium prices At a market price of US$40 per pound of uranium,experts estimate that there are just under
177、 715,000 metric tons of econo-mically recoverable uranium.With annual consumption currently at around 70,000 metric tons of uranium,these deposits would therefore be sufficient for just 10 ye-ars,provided the market price remained constant at at least US$40 during this pe-riod and demand also remain
178、ed constant.However,demand will inevitably increase.If the market price for uranium were to rise and justify extraction costs of US$80 per pound of uranium,about 1.28 million tons of uranium could be mined economically.Range at current consumption:18 years.If the uranium price were US$130 per pound,
179、about 3.79 million tons of uranium could be economically extracted.The known reserves would then last for about 54 years at current consumption levels.Former producing nations struggle with weak uranium pricesThe established uranium-producing na-tions of Australia,Canada,Russia and Ni-ger were alrea
180、dy having problems expan-ding their production before the Corona crisis.All four countries together produced just under 13,768 tons of uranium in 2021.In 2009,the figure was 28,000 tons of ura-nium.In some cases,mines were shut down due to the weak uranium spot price or the lack of further reserve a
181、vailability(as was recently the case at the Cominak and Ranger mines).U.S.uranium production at zeroThe uranium industry in the USA has come to a virtual standstill recently.Since 1980,virtually nothing has been invested in the development of new deposits,and nearly 95%of the uranium required has be
182、en ob-tained from the disarmament programs.U.S.nuclear reactors consume about 21,000 tons of uranium annually.Accor-dingly,an increase in capacity would requi-re an increase in the amount of uranium needed.The World Nuclear Association(WNA)projects that by 2035,about 35,000 metric tons of uranium wi
183、ll be needed an-nually in the U.S.alone.U.S.uranium pro-duction peaked in 1980,when about 29,000 metric tons of uranium were extracted from the ground.After the end of the Cold War,disarmed nuclear weapons in particular became the most important source of U.S.uranium requirements.This led to a decli
184、ne in U.S.uranium production to,most recent-ly,less than 5 tons of U3O8 in the second quarter of 2022.As a direct result,much of the infrastructure and licensed production facilities were simply closed or completely dismantled.Currently,only a few mining licenses remain in Texas,Arizona and Wyo-ming
185、.Recently,however,several compa-nies have been working on new licenses for their processing plants.In total,the USA has a production capacity of around 30 mil-lion pounds of U3O8 per year,about half of which has a production license.Kazakhstan is by far the largest producerWhile nearly all establish
186、ed uranium pro-ducers are struggling to expand their ura-nium production,one region has now mo-ved past all others to the top of uranium production:Central Asia.There,Kazakhs-tan in particular has been able to multiply its uranium production in recent years.From 2000 to 2019,uranium production in th
187、e former Soviet republic rose from 1,870 to over 22,808 metric tons.As a result,Ka-zakhstan also passed the previous leader Canada in 2009 and is now responsible for around 45%of total global uranium pro-duction.In 2020,production fell to 19,477 metric tons due to production cuts caused by low price
188、s and the effects of the Corona pandemic.In 2021,Kazakhstan produced about 21,800 tons of uranium.Massive production cuts lead to stabilization of uranium price Although Kazakhstan is one of the nations that can currently mine uranium at the lo-west cost,the country is no longer prepa-red to sell of
189、f its uranium deposits at rock-bottom prices.In early 2017,the sta-te-owned Kazatomprom announced that it would cut its own uranium production by at least 20%in 2017.In May 2018,Kaz-atomprom announced further production cuts.In addition,production had to be further reduced due to Corona.But Kazatomp
190、rom is not the only uranium producer to cut production in light of the weak uranium price.Uranium major Ca-meco also announced production cuts and closed its McArthur River mine and Key Lake facilities indefinitely in January 2018.The Rabbit Lake mine was also closed,both of which are among the ten
191、largest uranium mines in the world.McArthur River was the mine with the second hig-hest uranium production and grades in the world.The temporary closure removed 10%of the worlds total production from the market in one fell swoop.In addition,Cameco has itself been acting as a urani-um buyer for some
192、time to service long-term,higher-grade supply contracts with corresponding uranium volumes at spot prices.Since 2017,Kazatomprom reduced its uranium production by about 15%and Ca-nada by about 45%.In addition,there are closures at Moab Khotseng in South Africa and at the Chinese-owned Husab and Rssi
193、ng mines in Namibia,to name only the most important.The spot market,who-se supply is mainly composed of uranium mined as a by-product in other mines,has also recently seen a decline in supply due to various mine closures.Huge gap in supply has been opening up for some time nowEven before the Corona
194、pandemic,the supply deficit was about 40 million pounds of uranium per year.In 2020,the supply deficit was about 57 million pounds of U3O8,which was about a quarter of global annual demand.Thus,most of the current demand is being met from stockpiles,which are thus rapidly running out.A de facto supp
195、ly shortfall has already existed since 2017,with consumption at the cur-rent level of 426 nuclear reactors worldwi-de at about 180 million pounds of U3O8,of which only about 124 million pounds could be met by global uranium production in 2021.Over the past five years,global production has lagged beh
196、ind global uranium con-sumption by about 40-60 million pounds per year.19A future supply deficit at the current spot price is almost inevitableThe International Atomic Energy Agency(IAEA)estimates that new nuclear power plant construction will increase global ura-nium demand to as much as 300 millio
197、n pounds of U3O8 per year in 2030.Over the past 5 years,there has already been a de facto supply shortfall of between 40 to 60 million pounds per year.In its most recent Nuclear Fuel Report,the World Nuclear Association projected a 25%increase in demand by 2030.It is thus clear that the apparently c
198、hea-pest and only base-load-capable CO2-free way of generating electricity can only con-tinue to be used if the market price for the initial product uranium continues to rise.In the case of uranium,too,demand and supply regulate the market price.However,if the market price no longer permits eco-nomi
199、c extraction,it must and will inevitab-ly rise.In the case of uranium,there is also the fact that demand will rise sharply due to the construction of several hundred new nuclear reactors,so that the market price will benefit twice over.And thus,of course,also those investors who have recognized this
200、 trend in time.A high proportion of demand is currently unmetUnmet demand is expected to exceed one billion pounds of U3O8 over the next ten ye-ars.In this context,more than 75%of the expected reactor demand will not be cont-racted by 2025.For a commodity as thinly traded as uranium,this return to m
201、ore normal“long-term contracts is likely to 18Summary:The existing supply deficit will lead to an upward price adjustmentput tremendous pressure on both long-term and spot prices.Therefore,there are already increasing signals among interna-tional plant operators in the direction of increased buying
202、activity.Governments increasingly rely on nuclear power as a green,baseload energy sourceAs early as 2021,U.S.President Joe Biden announced with his Green New Deal“a strong promotion of nuclear power in the U.S.and thus also of uranium mining in his own country.At the beginning of 2022,the European
203、Commission also declared that nuclear power would be given a climate seal of approval“.This clears the way for billions to be invested in nuclear power.USA relies on uranium from its own minesThe U.S.is working to implement SMR technology,as are many private compa-nies.To date,the U.S.Department of
204、Ener-gy has funded over$160 million in projects under its new Advanced Reactor Demons-tration Program.Furthermore,the country is trying to beco-me less dependent on the immensely high uranium imports,mainly from successor states of the former Soviet Union.To this end,the U.S.Congress approved a budg
205、et that will provide$150 million annually over the next 10 years to create a strategic ura-nium reserve.This reserve is to come enti-rely from uranium from U.S.mines.A first bidding phase by US companies started recently.Uranium funds and uranium compa-nies buy spot market empty Only recently,severa
206、l other strong market players have joined in and are now secu-ring U3O8 on the spot market at a small price,mostly from mines where uranium is a by-product.In addition to Cameco,which is now a buyer,the Sprott Physical Uranium Trust and Yellow Cake Plc.have also been able to purchase larger quanti-t
207、ies of uranium.All these players took about 80 million pounds of U3O8 from the spot market since the beginning of 2021.Furthermore,uranium companies such as Uranium Energy,Denison Mines and Boss Energy also purchased physical uranium in order to be able to act flexibly and fulfill supply contracts i
208、n the event of an early production start-up.The best uranium stocks promise multiplication potential!The current situation of a uranium spot price that continues to be too low and does not reflect reality plus the still exis-ting,massive supply deficit,we have taken the opportunity to summarize prom
209、ising uranium shares for you in a compact way.In doing so,we focus primarily on develop-ment companies with extremely promising projects,as these also offer a high takeo-ver opportunity in addition to the actual appreciation due to a higher uranium spot price in this context.The two expert interview
210、s,which provide additional information and investment ideas,should also be noted.Hobson Production Facility(Source:Uranium Energy)21Mr.Schrer,nuclear power has increa-singly become the focus of investors because it has been classified as a green technology“by many governments world-wide.What does th
211、is mean for the urani-um sector?Against the backdrop of the global climate debate,governments are looking for ans-wers to the question of what their countrys optimal energy mix should look like in the future.Geopolitical concerns,economic in-terests,national egoisms and the laws of nature(physics)mu
212、st all be taken into ac-count.This is an extremely complex issue,because ultimately policymakers must en-sure that the energy and power supply for their national economies is clean,secure and affordable.According to the goals of the Paris Climate Agreement,energy supply in the future should be based
213、 less on fossil fuels.It is undisputed that the intended electrification of industry and mobility will lead to a dispro-portionately growing demand for electricity.Accordingly,alternative energies(wind,so-lar,hydropower)are to be strongly expan-ded.In recent years,a great deal of time and commitment
214、 has been devoted to defining globally binding climate targets that are as ambitious as possible.Ideological and mo-ral arguments often had a high priority in the context of these discussions.This has changed considerably against the back-drop of the war in Ukraine and the energy crisis it has trigg
215、ered.Questions about the availability and cost of energy supply are suddenly at the center of political debate.The dependence on fossil energy imports from Russia is to be reduced as quickly as possible and the energy supply for the co-ming winter is to be secured.This means that the time has come f
216、or concrete energy policy implementation.In this context,the limiting factors of time and money are be-ginning to take effect.Accordingly,realpoli-Interview with Dr.Christian Schrer Manager of the Uranium Resources Fund and Partner of Incrementum respect.The country plans to build around 150 new rea
217、ctors in the next 15 years!More than the rest of the world has built in the past 35 years.Are these plans realistic?That remains to be seen.The example of the United Arab Emirates gives cause for optimism in this respect.There,under Ko-rean project management,it has been pos-sible to realize ambitio
218、us construction pro-jects for new reactors while adhering to schedules and cost budgets.To what extent does the conflict between Russia and Ukraine affect the global sup-ply of uranium?Security of supply is a key issue for nuclear power plant operators.This is explained by the cost structure of thes
219、e power plants.In contrast to fossil-fueled(gas or coal)power plants,in the case of a nuclear power plant the capital costs are the dominant factor in the total cost calculation for electricity pro-duction.With a share in the high single-digit percentage range,fuel costs(uranium)are of secondary imp
220、ortance.Accordingly,the industry usually shows little price sensitivity to rising uranium prices.However,when an operator invests billions in the construction of a nuclear power plant,he also wants to operate it around the clock,seven days a week.A possible bottleneck in the fuel sup-ply must be pre
221、vented accordingly.In terms of the supply situation,the period since the Fukushima reactor accident has been mostly comfortable for power plant operators.For the most part,supply was greater than demand and the availability of uranium on the spot market was good.Du-ring this time,uranium producers f
222、rom Ka-zakhstan,Uzbekistan or Russia have stea-dily gained market share due to their attrac-tive positioning on the aggregate cost curve.As a group,these producer countries now hold a good 50%share of the uranium market.With a weight of 40%,Kazakhstan plays a dominant role.Accordingly,the social unr
223、est in Kazakhs-tan at the beginning of the current year and the associated military intervention by Rus-sia were already an initial wake-up call for the global nuclear industry.Even then,it became clear that the long-term supply contracts concluded with producers from Kazakhstan were probably riskie
224、r than had been thought a short time before.The issue of strategic supply security was launched.Since Russias attack on Ukraine,it has do-minated the agenda.Russia is not only a uranium producer,but with Rosatom“also a weighty player in uranium enrichment and fuel production.This dependence can be e
225、xpressed in figures:Western industrialized countries have about 70%of the global re-actor fleet,but only 40%of the downstre-am capacity“(conversion“/enrichment“/fuel production).Accordingly,Western po-wer plant operators are currently focused on securing part of this scarce capacity on a contractual
226、 basis.The price development observed at the back end of the fuel cycle clearly shows how tight the downstream“market currently is.However,this scarcity and the associated price increases will not remain a phenomenon at the back end of the fuel cycle.Due to various feedback ef-fects,this demand and
227、price pressure will also show up in the market for U3O8(urani-um)sooner rather than later.One such fee-dback effect is driven by tight uranium en-richment capacity.In times of low demand,suppliers of this service can run their centri-fuges longer and thus extract correspon-dingly more enriched urani
228、um from the de-livered feedstock(this is referred to as un-derfeeding“).The process can be compared to squeezing an orange.If you have more time available,you can squeeze more juice from the same fruit.The situation is different in times of high demand and scarce availa-ble capacity.There is less ti
229、me available for the enrichment of the starting material.The yield is correspondingly lower(this is refer-red to as overfeeding“).If one wants to produce the same amount of enriched ura-20Dr.Christian Schrer is a partner at Incrementum AG,responsible for special mandates.During his studies he starte
230、d to search for the strategic success factors of successful business models.A topic that still fascinates him today and inspires him in the selection of promising investment opportunities.He studied business administration at the University of Zurich and earned his doctorate while working at the Ban
231、king Institute Zurich with an analytical study on the investment strategy of Swiss pension funds in the real estate sector.He has acquired comprehensive financial market knowledge in various functions as investment advisor,broker and portfolio manager.Since the summer of 2004,Schrer has been focusin
232、g on various investment themes with a tangible asset character as an entrepreneur,consultant and portfolio manager.He also brings his practice-oriented financial market knowledge to companies as a member of the board of directors.He is married and father of a son.In his free time,he enjoys cooking f
233、or friends and family,hiking in the Ticino mountains or reading the biography of a fascinating personality.tik is increasingly taking the reins in the se-arch for feasible energy policy compromi-ses.This is reflected in the formulation of the New Green Deal“by the Biden admi-nistration,the shaping o
234、f the EU taxonomy by the Commission or the objectives of the Japanese government,which is working on a forced comeback of nuclear energy a good ten years after Fukushima.Underlying all these political approaches is the recog-nition that the unavoidable fluctuations in the production of alternative e
235、nergy sour-ces must be balanced out within the frame-work of a stable power grid.This requires reliable power generation from non-fossil sources that is available around the clock,seven days a week.Because nuclear power is produced with low CO2 emissions,nucle-ar power plants are a possible solution
236、 for many governments to provide this base load in the power grid.Against this backg-round,alternative energy sources and nuc-lear power can form a green“symbiosis.Thanks to this green stamp,nuclear power plants will probably also benefit from eco-nomic stimulus programs and government subsidies in
237、the future.It will also be easier to tap investor funds.For Europe,the USA and Japan,we expect that this will make it easier to modernize existing nuclear power plants with the aim of extending their ope-rating lives.By contrast,we do not expect numerous new projects for the construction of current-
238、generation reactors.We see more potential for new reactor concepts that are safer,more flexible and less expen-sive than the current generation of nuclear power plants.The necessary research funds can now be mobilized more easily in the context described.Whereas in the established industrialized cou
239、ntries the short and medium term aim is to extend the operating life of existing nuc-lear power plants,in the emerging econo-mies in the Middle East and Asia the focus is on the accelerated expansion of reactor fleets.China is particularly ambitious in this 2223In retrospect,it can be stated that th
240、is stra-tegy to discipline the supply side has wor-ked.The uranium price has now completed its bottoming out and recently reached its highest level since 2012.Given the impro-vements on the demand side discussed earlier(extension of operating lives,const-ruction of new reactors,desire to diversify s
241、upply sources),we see price risks on the demand side of the market in the current environment.Over the past 12 to 18 months,the uranium market has changed from a buyers market to a sellers market.As the Cameco“example shows,a signifi-cant expansion of production volumes is not to be expected in the
242、short term,even in an environment with stronger increases in ura-nium prices.For technical reasons,this is not feasible even for established producers in the short term(within 12 to 18 months).At most,a question mark could be placed be-hind the production discipline of Kazatom-prom“.In view of Russi
243、as increased influen-ce on the government of Kazakhstan,one can indeed question the adherence of the 75%state controlled Kazatomprom“to its self-imposed production restrictions.So far,however,we have not heard any signals from management regarding such a change in strategy.Here too,for technical rea
244、sons(supply chain problems,time-to-market of new in-situ production capacities),a short-term expansion of production seems unli-kely to us.On the contrary,in the current(sanctions)environment,the risk of limited availability of Kazatomprom production due to delivery difficulties(shipping via St.Pe-t
245、ersburg)seems more likely than an unex-pected production expansion.zation of the market.However,these capa-cities will sooner or later find their way back into the market.Accordingly,the resulting support for the uranium price was also only of a temporary nature.This process will continue in the cas
246、e of the recent producti-on outages due to supply chain delays.More important for the further development of the uranium price,however,are the chan-ges at the strategic level.Under the leaders-hip of the two heavyweights Kazatom-prom“and Cameco“,the supply side has attempted to lead the uranium mark
247、et back to a new equilibrium over the past four years with significant production cuts.We are se-eing previously unknown supply side discip-line in the market today.As a result,global mine production is likely to have reduced by around a quarter compared to 2016.These production cuts reflect nothing
248、 more than the recognition of economic realities by uranium producers.From the point of view of the mine operators,the ratio of the pro-duction costs of their existing capacities(ASIC All In Sustaining Costs)to the spot price is relevant.If these costs are higher than the selling price realized on t
249、he spot and forward markets,then uranium produc-tion makes no sense from an economic point of view.If the uranium price rises sus-tainably above the level of production costs,capacities that have been temporarily shut down for economic reasons(mines in care and maintenance“status)will find their way
250、 back to the market.This is the background to the recent announcements by Cameco“to bring their McArthur River“and Cigar Lake“mines(partially)back into production from 2024.nium as before,one needs correspondingly more of the starting material as input for the enrichment process.Currently,this swing
251、 from underfeeding to overfeeding in the uranium enrichment process results in an estimated additional annual demand of about 20 million pounds of uranium(U3O8).This in a market environment that is already very tight.In the current sanctions discussion,there are voices on both sides.Aware of Western
252、 dependencies,Russian voices are calling for an export ban on uranium and nuclear fuel.On the other hand,bills are pending in both chambers of the U.S.Parliament that aim to ban imports of Russian uranium.As of today,the outcome of these discussi-ons is open.Due to the existing stocks at the power p
253、lant operators,the smooth con-tinued operation of the nuclear power plants is ensured for the next 12 to 18 months,irrespective of the outcome of the-se discussions.However,against the back-ground outlined above,we expect massive structural shifts on the uranium market in the medium term:1.Western p
254、ower plant operators will want to diversify their supply sources and en-ter into long-term supply contracts with suppliers from politically reliable juris-dictions.A willingness to self-sanction can already be observed today.Western power plant operators are refraining from purchasing uranium and nu
255、clear fuel from Russian sources wherever possible.A geopolitically driven division of the uranium market is emerging(bifur-cation).2.Power plant operators are also addres-sing the issue of strategic security of supply with more extensive stockpiling.As the latest quarterly statement of the Canadian
256、uranium producer Cameco“has already shown,power plant opera-tors are indicating an increased willing-ness to stockpile uranium.This is likely to mark the start of a new inventory cyc-le on the demand side.In our opinion,this is the last missing piece of the mo-saic in the picture of a multi-year and
257、 sustainable uranium bull market.3.The outlook for existing and prospective uranium producers has thus improved significantly.On the one hand,they be-nefit from the willingness of demanders to conclude new long-term supply cont-racts(see Cameco“).On the other hand,the recent significant increase in
258、the ura-nium price provides incentives to bring existing production capacities,which have been shut down for economic rea-sons,back into production and to push ahead more consistently with the realiza-tion of projects which have already been approved.These are the first tentative steps towards reduc
259、ing the still growing supply gap on the uranium market.In summary,despite the current political and military uncertainties,from a funda-mental perspective the medium-term out-look for producers on the uranium market has further improved.Since 2018,uranium producers worldwide have been trying to find
260、 a balance bet-ween production and demand.What has actually happened since then,and is it re-ally sustainable?In this context,it is important to distinguish between strategic and cyclical market de-velopments.The Corona-related producti-on cuts have relieved the market in the short term as part of a
261、 cyclical fluctuation and supported the spot price.This was because,due to interruptions in production,renowned producers were no longer able to cover their delivery obligations from their own uranium production,but only with purchases on the spot market.This was a welcome contribution to the desire
262、d stabili-In summary,despite the current political and military uncertainties,from a fundamental perspective,the medium-term outlook for producers in the uranium market has continued to improve.“24world-class development and mining pro-jects.These are particularly interesting if they can significant
263、ly advance their projects in the time window of the expected supply gap.They will then be able to benefit from a correspondingly attractive performance of their projects.In addition,these assets should have the necessary size to also qua-lify as takeover targets.After all,we assume that a wave of co
264、nsolidation will take place on the uranium market once the price tur-naround has occurred and that mining companies from outside the sector may also want to position themselves in the ura-nium business.This would make sense not least because of the low cyclical sensitivity and the comparatively high
265、 visibility of ura-nium demand.For example,the companies NexGen Energy“,ISO Energy“or Deni-son Mines“can be assigned to this group.What advice do you have for investors in-terested in investing in the uranium sec-tor?As discussed,the prospects of promising uranium stocks are promising.On the other h
266、and,the volatility of these shares is ext-raordinarily high due to their low market li-quidity and implicit project risks.Those who put all their eggs in one basket in this spe-culative constellation are therefore playing high poker possibly even too high.The use of a fund or ETF that invests divers
267、ified within the investment theme seems reason-able to us.In addition,we recommend a staggered build-up of positions.core of the portfolio.If our view is correct,the supply gap in the uranium market will be filled via a rising uranium price.Sprott Phy-sical Uranium Trust and Yellow Cake Plc.should t
268、herefore be the first and most im-mediate beneficiaries of this price recovery.The third pillar focuses on the shares of ura-nium producers or standby“producers with approved and/or realized projects that are not currently in production.When uranium prices start to rise,the producers who can place s
269、ignificant uranium production on the market will benefit.Only those who produce can also deliver.To be on the safe side,we focus on companies that have low producti-on costs on the one hand and a good order book of long-term supply contracts on the other.Significantly represented in the port-folio a
270、re the two industry leaders Cameco“and,due to the current environment,with some restrictions Kazatomprom“.Both companies have a broad portfolio of first-class production sites.This group is supple-mented by investments in companies to which we would give the status of standby producer“.These are com
271、panies that have a portfolio of approved production sites and processing capacities.Production could be launched within a foreseeable period of time as soon as the economic conditions(i.e.a higher uranium price)are met.We include,for example,Paladin Energy“,Global Ato-mic“,Uranium Energy“,enCore Ene
272、rgy“or Energy Fuels“in this group.Under the fourth pillar,we focus on explo-rers and developers who are advancing 25You manage the Uranium Resources Fund(ISIN LI0224072749)of LLB Fundservices AG in Liechtenstein.What strategy are you pursuing and what does the fund ac-tually represent?The investment
273、 strategy of the Uranium Re-sources Fund is based on our investment hypothesis that the existing supply gap in the uranium market will be closed over the next three to five years.This will only suc-ceed if a significantly higher uranium price provides the incentives for new production capacities or
274、those temporarily shut down for economic reasons to find their way to the market.The Fund holds 25 to 30 positions in the portfolio and is suitable for the long-term oriented investor who wishes to participate in the interesting prospects of the uranium sector.The assets are invested worldwide in co
275、mpanies that have a direct link to the uranium sector,in accordance with the principle of risk diversification.The invest-ment strategy aims at absolute value growth.Due to its risk profile,the Uranium Resour-ces Fund is suitable as a supplementary component in a diversified portfolio and not as a b
276、asic investment.The Fund is licensed for public distribution in Liechtenstein,Ger-many and Austria and is tax transparent.In Switzerland,it is open for subscription to professional investors.What selection criteria do you use when choosing fund stocks,and what are your current top performers?After a
277、 long bear market,the uranium market has bottomed out and made a sustained upward turn.In view of the growing supply gap and the further improving fundamental data,there are good prospects for a conti-nuation of the bull market despite the price gains to date.However,interim setbacks and high volati
278、lity remain a feature of this tight market.We intend to consistently ex-ploit the profit opportunities that present themselves,while accepting controlled risks!Against this background,our portfolio stands on four pillars.The first pillar is our strategic liquidity ratio.This ensures our ability to a
279、ct at any time.In this way,we take advantage of attractive entry points that regularly open up due to the volatile price performance of many uranium shares.With the second pillar,we want to participa-te directly in an improvement in the uranium spot price.Without higher uranium prices,a sustainable
280、recovery of uranium producers is difficult to imagine.That is why two inves-tment companies,which have invested their funds mainly in physical uranium,form the Performance of the Uranium Resources Fund in Swiss Francs(Source:incrementum.li)After a long bear market,the uranium market has bottomed out
281、 and made a sustained upward turn.In view of the growing supply gap and the further improving fundamental data there are good prospects for a continuation of the bull market despite the price gains to date.“Performance of the Uranium Resources Fund in Swiss Francs2627Interview with Scott Melbye CEO
282、of Uranium Royalty,Executive Vice President of Uranium Energy and Ex-Advisor to the CEO of KazatompromYou have been in the uranium and nuclear energy business for 38 years now.Can you share with our readers your path to get here and observations on how this time compares with other periods in the ur
283、anium market history?It has truly been a pleasure to be engaged in this incredible industry throughout all these years.The mid-1980s had me tra-ding uranium commodities with the German company,Nukem Inc.in New York,follo-wed by my time as a nuclear fuel buyer for the Palo Verde Nuclear Power Station
284、 in Arizona.The next two decades were devo-ted to Cameco,from the time of their mer-ger out of Canadian Federal and Provincial Crown corporations,to becoming the lar-gest publicly listed uranium miner,opera-ting the worlds leading operations in Sas-katchewan and selling over 34 million pounds of ura
285、nium annually to all of the worlds nuclear utilities.Among many ama-zing experiences at Cameco,important new markets in China and India were ope-ned up during this time.The early part of the last decade had me leading the marke-ting efforts of Uranium One,the global ura-nium production subsidiary of
286、 Russias Rosatom with extensive experience in Kazakhstan,the United Arab Emirates,and China.Finally,I embarked on my current leadership positions at Uranium Energy Corp.and Uranium Royalty Corp.Mixed in there were consulting roles with the ma-nagement of uranium activities at Sprott Physical Uranium
287、 Trust-forerunner,Urani-um Participation Corp.and as Advisor to the CEO of Kazatomprom,assisting in their transition from state-owned-entity to pub-licly traded company.With all these experiences behind me,in-cluding all the highs,and some very chal-lenging times for our industry,I can say that I ha
288、ve never been more optimistic about the prospects for nuclear energy and uranium in the coming months and years.Uranium Prices have recently been tra-ding around$50 per pound but reaching as high as$63 earlier this year.This is up significantly from the bear cycle lows of$17.70 per pound in November
289、 2017.What is behind this bull market move in uranium prices?Uranium prices have indeed been on a dra-matic recovery which can be attributed to a number of basic supply and demand funda-mentals,in combination with a mix of global mega-trends and geopolitical develop-ments.Firstly,we have been talkin
290、g about the re-balancing of supply and demand factors for some time,and recent events have only ac-celerated that development.Following a period of uranium over-supply brought on by the impacts of Fukushima,global urani-um producers began to take steps to ratio-nalize their production plans around t
291、he time long term contract hedges were begin-ning to roll out of supplier portfolios.Despi-te falling prices throughout the decade,glo-bal production had increased and peaked in 2016.From 2017 onward,however,we finally began to see supplier discipline translate into reduced production levels and the
292、 shut-in of mines around the world.In fact,over the past 6 years,global pro-duction has lagged global uranium con-sumption by roughly 40-60 million pounds per year.This has had the impact of drawi-ng down global secondary supplies to help bring the market more into balance.Some producers,like Cameco
293、,not only shut-in production,but entered the market as buyers to backfill their substantial long term contract commitments.A couple of major developments came along to throw gasoline on the fire.The CO-VID-19 pandemic,for one,impacted roug-hly 50%of global uranium production at its peak,yet fortunat
294、ely spared the nuclear po-wer plant,uranium-consumers who opera-ted reliably as essential services throughout Scott Melbye is a 37-year veteran of the nuclear energy industry having held leadership positions in major uranium mining companies as well as industry-wide organizations.Through to June 201
295、4,Melbye was Executive Vice President,Marketing,for Uranium One,responsible for global uranium sales activities.Prior to this,Melbye spent 22 years with the Cameco Group of companies,both in the Saskatoon head office and with their U.S.subsidiaries.He had last served as President of Cameco Inc.,the
296、subsidiary responsible for marketing and trading activities with annual sales exceeding 30 million pounds U3O8.Melbye was formerly the Chair of the Board of Governors of the World Nuclear Fuel Market and President of the Uranium Producers of America.He also currently serves as Executive Vice Preside
297、nt of Uranium Energy,was VP-Commercial for Uranium Participation Corporation and was Advisor to the CEO of Kazatomprom,the worlds largest uranium producer in Kazakhstan.Melbye received a Bachelor of Science in Business Administration with specialization in International Business from Arizona State U
298、niversity in 1984.this time.As such,uranium demand was unimpacted while major mining operations,like those in Kazakhstan and Cigar Lake in Saskatchewan,Canada,saw their output decreased,even beyond the discretionary mine cutbacks.Additionally on the produc-tion side,the uranium market is experien-ci
299、ng the end-of-mine-life of a number of key operations including the Ranger mine in Australia(which ceased operations in 2021),the Akdala mine in Kazakhstan,and the Co-minak mine in Niger.Additionally,the deca-de of low uranium prices did very little to incentivize the pipeline of new projects or enc
300、ourage the restart of idled mines.This will dramatically impact the production res-ponse in this emerging supply squeeze as mines are not permitted,licensed or de-veloped overnight,and in fact,can take 6-10 years to accomplish(with no guaran-tee of success).Market observers should also not ignore th
301、e impacts of global inflati-on on the price thresholds of mine restarts and development.There may be a general misperception of the level at which uranium prices will incentivize new mines.With this sort of production/consumption gap prevailing for so long,have we finally made a dent towards drawing
302、 down the over-hang of global inventories?Yes,most definitely.These voluntary and involuntary reductions in global mine pro-duction provided the opportunity for the market to fully draw on,and deplete,the over-hang of inventories which built up from the effects of Fukushima and,frankly,over-producti
303、on throughout the first half of the decade.This has been dramatically accele-rated through the purchasing activities of non-traditional uranium buyers.Such cate-gory of buyers would include producers,like Cameco,backfilling contract commit-ments from the open market,junior pro-ducers,like UEC and ot
304、hers,opportunisti-cally establishing low-cost inventories at near the bottom of the cycle,and pure spe-culative purchasers.These speculative,or financial,buyers have included Uranium Royalty Corp.,Yellow Cake Plc.,and Sprott Physical Uranium Trust(SPUT)who are accumulating holdings of physical urani
305、um on behalf of their shareholders who are seeking price exposure to the underlying commodity.Similarly,we have seen hedge funds make direct purchases of spot urani-um in which they hold to realize capital appreciation of the assets.Collectively,the-se categories of buyers have had a pro-found impac
306、t on the rebalancing of the ura-nium market having purchased almost 90 million pounds in the past two years.SPUT has been the major player in all this having raised$1.7 billion from its at-the-market fi-nancing vehicle since August 2021.While I am reluctant to describe these develop-ments as“catalys
307、ts”,preferring to reserve that term to the major underlying supply and demand fundamentals,I would clearly describe these events as a major tipping point in the market re-balancing.Our rather thinly traded and inefficient uranium market was already heading from over to un-der-supply from both tradit
308、ional supply and demand trends,however,the magnitude of spot buying has perhaps accelerated for-ward the market recovery by a couple ye-ars.The significance being that the urani-um market is transitioning from being in-ventory-driven,to one more reliant on the cost and timing of production from new
309、and restarted mines.What impact has societys desire to decar-bonize our economy had in terms of nuc-lear growth on the demand side for urani-um?Just as the global uranium industry was fo-cusing on the rationalization of production in light of low market prices that were below global extraction costs
310、,we have seen an unprecedented embrace of nuclear power for the role it can play in a lower-carbon fu-ture.For the first time in the modern history Corp.utility being the buyer).Not only can this advanced reactor make a clean energy transition,but it can also connect into exis-ting grid infrastructu
311、re,and jobs can be preserved in the impacted fossil fuel sector.Central Europe is proving to be a promising market for this technology as these coun-tries are facing a number of energy challen-ges.While historically dependent on co-al-fired power generation,they are being pushed towards lower carbon
312、 alternatives by the European Commission.At the same time,they want to avoid the dangerous reli-ance on Russian natural gas.Large western reactors and SMRs are proving to be the desired fit between these competing objec-tives.In that regard,how is the Russian invasion of the Ukraine impacting the gl
313、obal urani-um market?If the supply and demand rebalancing,CO-VID-19 impacts,and non-traditional urani-um buying was not enough,the appalling and unprovoked invasion of sovereign Uk-raine by Russia may prove to permanently reshape the uranium market in a number of ways going forward.The Rosatom urani
314、um enrichment complex represents 45%of global installed capacity,and closely aligned Kazakhstan has become the worlds largest uranium producer.In the United States for example,20-25%of the enriched uranium comes from Russia and close to 50%of natural uranium supplies are sour-ced from Russia,Kazakhs
315、tan,and Uzbekis-tan.These Russian fuel purchases amount to close to US$1.3 billion in hard currency per year towards Putins war efforts.Wes-tern Europe would have similar levels of re-liance.We would be correct in pointing out the risk management folly of putting that many eggs in Putins basket,but
316、the reality faced today is not whether to move away from Russian fuel reliance,but how quickly can this be achieved without harm to the nuclear power plant consumers.Not only of nuclear energy,we are seeing broad sup-port for nuclear power from the political Right and Left,the investment community,a
317、nd both environmentalists and industria-lists.Whether one values the clean energy benefits of this leading green-energy tech-nology,or it is a prioritization of the reliabili-ty and affordability of 24/7,baseload power,nuclear energy delivers both.It is as car-bon-free and safe as wind and solar yet
318、 runs 95%of the time versus 30%for inter-mittent renewables.Moreover,its ener-gy-dense uranium fuel serves as a price hedge against volatile fuel costs compared to fossil-fired generation.It is not surprising then that in the past 9 years the world has seen 64 large,modern nuclear power plants conne
319、cted to the global electric grid and 54 more commence construction.Furthermo-re,we are now seeing very exciting de-velopments in the deployment of small mo-dular,or advanced,reactors(SMRs).The-se are not the 1500-megawatt massive power stations that we have become ac-customed to,but rather smaller 5
320、0300-me-gawatt units that can be constructed in a factory with lower up-front capital,shipped on site and built in a scalable,modular manner.Once these innovative plants can get past the first-build hurdles,they promi-se to be affordable and flexible clean ener-gy sources that can adapt well to larg
321、e grids already burdened with substantial intermit-tent renewables,present viable alternatives to retiring coal fired power plants,or serve as a main source of power to remote com-munities,or for uses in industrial or mining applications.Whether it is GE Hitachi in Ca-nada,Rolls Royce in the United
322、Kingdom,or X-Energy,TerraPower or NuScale in the United States,these SMRs and advanced designs are receiving substantial commer-cial interest and boosted by strong govern-ment support in terms of their initial deploy-ment.In a significant announcement last year,the U.S.state of Wyoming will see a Bi
323、ll Gates,TerraPower,Natrium reactor constructed on the site of a retiring coal-fi-red power station(Warren Buffetts Pacific 2928are these supplies potentially subject to sanctions(the U.S.Congress has proposed a complete ban on varying timelines),they could also be subject to a Kremlin export embarg
324、o knowing how strategic these energy supplies are to the West.Yet other companies have remained true to their mo-ral and ethical values and have voluntarily ceased Russian purchases(Swedish Vat-tenfall having made this decision on the first day of the invasion).Other utilities will face mounting pre
325、ssure to act from shareholders and customers,like the protests we have seen at EDFs headquarters in Paris.Cent-ral European utilities face a more daunting task in refueling their Russian designed VVER reactors with western fuel,including the fabricated fuel designs now being ma-nufactured by Westing
326、house for the Ukrai-nians and Czechs.Having said that they,and other neighboring countries,are fully committed to the transition given the first-hand perspective of Russias carnage and the exodus of refugees.From a supply and demand perspective,we have to assume perhaps a permanent shift away from R
327、us-sian uranium fuel reliance.While this may have dramatic on uranium prices in the near term,it should signal a strategic shift to-wards more geopolitically stable suppliers that are not under the influence of Russia or China.How has this Russia/Ukraine conflict im-pacted nuclear power in global na
328、tional energy policies?The humanitarian catastrophe that is the Russian invasion of Ukraine will impact so-ciety in many ways for years to come.Per-haps the most lasting impact on global energy will be the renewed and keen aware-ness towards energy independence and se-curity.Energy Ministers from ar
329、ound the world are reassessing how their energy is produced and from where it is coming from.No longer will it be acceptable to outsource strategic energy supplies(and other critical The humanitarian catastrophe caused by the Russian invasion in Ukraine will affect society in many ways in the years
330、ahead.Perhaps the most lasting impact on global energy supply will be the renewed and pronounced awareness of ener-gy independence and security.“3130minerals,goods and services)to countries that do not have shared values and inte-rests.Multinational cooperation will still exist,but a much greater em
331、phasis will be placed on domestic control of strategic re-sources.Nuclear energy has a very import-ant role to play in this societal shift.Nowhe-re has this become more evident than with the failed energy policies of Germany over the past 15 years.The Merkel approach of“Energiewende”promised abundan
332、t clean and affordable electricity though billions of Euros invested in green energy renewables,and a very deliberate and unequivocal pha-se out of nuclear energy.The result has been quite the opposite.Germany has ins-tead“succeeded”in achieving electricity prices 60%higher than neighboring nuclear
333、France,while making very little progress in its carbon reduction goals,losing their lar-gest source of carbon-free energy(nuclear)and instead increasing reliance on dirty lig-nite coal.However,the most disturbing re-sult of this policy has been the overwhel-ming reliance on Russian natural gas from the Nord-Stream pipelines.The latter cau-sing not only supply shocks to the German economy but confl