Value Microcaps Junior Miners

[Bobwins]

Uranium..... will another rally finally come? Uranium has been rallying lately, with spot rising to $65/lb. We are entering the normal season when utilities contract for medium term supplies. There is a guy named Justin Huhn who runs the Uranium Insider newsletter. He posts videos on youtube and I have been following him for the past year. He says that utilities have been taking advantage of old contracts that were done when uranium was under $20. Those contracts included clauses that allowed utilities to upsize the amount of uranium they take by 25% when they are close to delivery. Since U has gone up so much, it's like free money. Obviously this reduces their needs somewhat but it also soaks up any remaining supplies.

He maintains that there isn't much supply left and utilities, especially US utilities, need Uranium fuel after 2027 quite badly. Last time U surged in 2007 I missed most of it and tried a few flyers but was unhappy with the resulting cow pasture miners that I ended up with.

This time, I stuck with the bigger names in Uranium. I have been holding LEU since the 30's and it's now $54.91. They have the contract to build and produce HALEU, which will be used in existing as well as newly designed nuclear reactors. US is woefully short of both U mines and enrichment facilities. Our smart legislators choose to buy enriched fuel from Russia so we don't have any US based plants operating now. LEU will build the first plant in decades.

I recently bought CCJ, Cameco, the second biggest producer of U in the world. CCJ is the best known U stock and will benefit from the recent price rise and any future rallies. I also bought a little URNM, which is a uranium ETF to get some diversification. LEU gets some supplies from the Russians and the market has been worried about that supply evaporating at some point, especially if the WEST puts uranium on the list of Russian items that are sanctioned. They haven't so far because they don't have enough alternative suppliers to make up for Russian sales to US and other utilities.

Bottom line, I believe the time is near when utilities will have to bid against each other for medium/long term Uranium supplies. There aren't many uranium mines in the process of being built due to the low prices over the past 20 years and these mines take a long time to find, permit, finance and build. There was some surplus supply but Sprott has a fund that has been buying up those supplies and holding them. The Chinese are building reactors as fast as they can and Japan is turning it's mothballed reactors back online. Nuclear is truly zero carbon and the world is finding out that getting off fossil fuels is harder than they thought.