Geiger Counter Share Discussion Threads

[steve73] 21/7/2018 11:39

Thanks tonsil... just to make the link clickable, although you've C&P'd the entire text.

[tonsil] 21/7/2018 09:47

article by the GCL managers in FE Trustnet

hxxps://www.trustnet.com/news/824813/the-scarce-metal-few-people-are-talking-about?utm_source=Trustnet%20Newsletters&;utm_campaign=45bd457b6e-EMAIL_CAMPAIGN_2018_07_18_04_15_COPY_01&utm_medium=email&utm_term=0_2314bd04ee-45bd457b6e-75468653

The uranium market looks poised to recover strongly after a 10-year bear market, following production cuts by the world’s largest producers. Uranium has lagged other commodities into this cyclical recovery but that looks likely to change.
The demand growth side of the equation is the easiest to understand with a clear build-out of new reactors led by China. China is focused on reducing emissions and improving air quality, so remains motivated to add power generation with zero emissions. Globally, there are currently 50 reactors in construction and 447 that are currently operating. These new reactors are typically larger than the existing fleet and also require three years' worth of material on their initial loading.

The extended prior weakness in the Uranium market can be attributed to two main factors. The Fukishima reactor accident in 2011 saw the uranium price fall 67 per cent to $20/lb, or 85 per cent from the 2007 peak, after Japanese reactors were shut in, removing 12 per cent of global demand. Secondly, since 2004 Kazakhstan undertook huge expansion in production from 8Mlbs [millipounds] to 60Mlbs per annum, and now produces 31 per cent of global supply.

This situation is now reversing with Japan having restarted nine reactors, with plans to restart more of the facilities from over 40 that could return to operation. Meanwhile Kazakhstan is showing supply constraint, cutting production 10 per cent since the beginning of 2017 and having announced plans to reduce production by an incremental 7 per cent in 2018. This is motivated by Kazatomprom’s intended IPO later this year, with similarities to the intended IPO of Saudi Arabia’s Aramco, as they look for an improved commodity price. Kazatomprom’s influence over primary uranium supply is comparable to the whole of OPEC in the oil market.

Futhermore, the world’s largest listed producer, Cameco, mothballed their MacArthur river mine in Canada, which reduced global supply by 8 per cent. Additional cuts by Rio Tinto and Paladin have also tightened the market.

The best solution to over supply is low prices and this has certainly proved to be the case. With the uranium spot price at $23/lb there is no motivation to bring any mothballed or new projects on line. Cameco have indicated they need long-term contracts around $40/lb before they would consider restarting MacArthur River, which is one of the highest grade projects in the world.


The market is now firmly in deficit, with no sign of new supply on the horizon unless we see a meaningful improvement in uranium prices. In July this year the launch of the UK-listed Yellowcake physical uranium ETF further tightened the market, effectively locking up over 8Mlbs, or 5 per cent of global demand, that would have otherwise been available for the spot market.

Uranium is only a tiny proportion, around 3 per cent, of the overall power generation cost for utilities. Consequently, there is very low price sensitivity to end demand once a reactor has been constructed. It is also important to differentiate between the growth in renewable relative to nuclear power. Nuclear reactors provide a steady base load source of power, which is different from the variability of solar and wind power. We are already seeing some power grids struggle to cope with this rise in variability.

The Chinese are also able to construct reactors far more efficiently than in the west, in part due to the cookie cutter process they have applied in building larger, standardised designs but also through cheaper financing availability for these high capital expenditure projects. This is in contrast to the likes of the UK’s Hinkley Point which is significantly more expensive.

The uranium sector offers investors a deep value sector uncorrelated to the wider market, which has seen a significant fundamental improvement that looks likely to drive material improvement in the commodity price and respective producer equity valuations going forward.

Rob Crayfourd and Keith Watson are co-portfolio managers of Geiger Counter. The views expressed above are their own and should not be taken as investment advice.

[quepassa] 18/7/2018 10:24

True. Spot on. These guys are expensive fund managers and I do not necessarily believe that they are worth the high fees they charge, nor merit them through the lacklustre performance of the fund.

As an example,selling a good part of their Cameco holdings recently which have since rocketed look to me like a bad, ill-informed, ill-judged and ill-timed decision and not having their finger on the market pulse.

I know a genuine story about a bona fide shareholder in GCL who left several calls with several members of the top management in their London office over several days just to ask some general questions and no-one at GCL even had the courtesy to return the calls.

For the massive fees they charge, you would expect a far more professional approach to shareholders, shareholder communications. And their flimsy monthly updates and lacklustre performance leave a LOT to be desired.

I hope their Chairman and Board take these points on board because the running of GCL is not just expensive but in my opinion leaves room for improvement on many fronts.

I continue to hold GCL for the uranium sector which I strongly believe in but if there were a different fund manager in this sector in GBP, I would jump ship.


ALL IMO. DYOR.
QP

[makeamillion1] 18/7/2018 09:47

Should see a nice move through the day and tomorrow.

Investors should beware of the charges as they are significantly higher than etf URA they charge 0.69% and pay a massive December dividend.... however GCL is focused on top Uranium mine plays but ooch the fees when these take off are very very very high especially any outperformance, IMO I expect a major rally in USA Uranium mines. I see analysts report that US mines will require a spot price going from currently $23 to $60-$70, the last time this happened some of the stocks held by GCL were 6-10x higher, compare to June 2007 and to a lesser extent Feb 2011 :

From GCL Fact Sheet:

Management Contract & Fees:

The Investment Manager receives an annual fee equal to 1.375% of Net Asset value after adding back any accrued performance fees and bank borrowings. payable monthly in arrears based on the mid-market value of the assets at the month end. The Investment Manager is entitled to a performance fee at the rate of 20% of outperformance above an 8% per annum hurdle with high watermark provisions. The Management Agreement may be terminated by either party giving to the other not less than 12 months' notice.

Good luck all I am heavily invested in Uranium and IMO we could hit a year high today in the spot price and a significant breakout could occur when the BPA spot price exceeds $26.12

[quepassa] 18/7/2018 07:04

Important news

[dogberry202000] 18/7/2018 00:02

Some major surges, especially in US based uranium companies after hours tonight on news of a US probe on the security of uranium supplies. URG up around 26% at one point now just 16%. There should be some volatility tomorrow.

[mustbefunny] 12/7/2018 14:02

Also reduces the dilutive effect of the sub shares and increases the value of the sub shares when in the money

[bmcb5] 12/7/2018 10:13

The Company announces that an application to The International Stock
Exchange for an extended offer facility (the "Extended Offer Facility")
for an unlimited number of new ordinary shares of no par value in the
capital of the Company (the "New Shares") has been approved for a period
of 12 months.

They know that demand for these shares is going to rocket. Dilution not an issue. I'd be happy enough to see many more shares in issue, and a more liquid market.

[bmcb5] 09/7/2018 09:31

I've just pocketed a load more subs. They're well bid this morning

[bmcb5] 05/7/2018 10:05

Yellowcake (YCA) launched this morning. I've created a thread here:

I'll try to add to it over coming days/weeks

[bigtbigt] 22/6/2018 18:03

I agree dog... I am expecting 30p or so in the next few weeks

This thing is clearly coming back to life

[bigtbigt] 22/6/2018 18:03

deleted - duplicate post

[dogberry202000] 22/6/2018 13:51

Is that a five month or so cup with handle on the chart? If so, that's a positive sign. I don't think that GCL will act as it did last year with the small pull back in NAV. Things in the wider market could change in days or weeks. Yellow Cake's IPO is not far off and there are two big entities going to float by the second half of the year. July onwards looks promising.

The utilities are reported as having suspended buying, at least in the US, until the Section 232 issue is resolved. There are at least two time scales there. Then there could be a rush to buy from the utilities and pent up demand could affect the spot price for U. The opaqueness of the market in uranium over the last few months has provided good buying opportunities for GCL and for its investors. I think this opaqueness could clear from early July until the first quarter of next year.

[dogberry202000] 20/6/2018 16:03

I've used this opportunity to add a few here. GCL's holdings have great potential and I'd expect them to add some Yellow Cake at the IPO. The money being raised by selling new shares is most likely coming from institutions who want to get on-board. The problem is GCL is rather small for them - indeed, the sector as a whole has been miniaturised, so it's hard to pick up decent stakes.

[briggs1209] 20/6/2018 11:36

I'm out of here again the premium is too high. Will return when we drop back down

[kenmitch] 19/6/2018 22:07

Jimbox. No dilution from he sub shares unless they are exercised and finish in the money. That, sadly, is beginning to look doubtful. Uranium’s long promised recovery never seems to come! And at present Geiger Counter is overvalued.

[kenmitch] 19/6/2018 22:07

Jimbox. No dilution from he sub shares unless they are exercised and finish in the money. That, sadly, is beginning to look doubtful. Uranium’s long promised recovery never seems to come! And at present Geiger Counter is overvalued.

[jimbox1] 19/6/2018 20:41

The premium to NAV is ridiculous, especially when you look at other mining-related investment trusts like BRWM, which is at a discount. No surprise that the company is cashing in by issuing more shares. There will also be dilution from the subscription shares, in due course.

[matt123d] 18/6/2018 22:36

Large transactions at a premium.

[brugen] 15/6/2018 22:54

What stunning big buys at the close, adding up to 1.5m plus. Bullish!

In its RNS today the company said "The Company announces that, conditional only on Admission becoming effective, it has allotted, by way of a new issue in response to market demand, 1,410,000 new ordinary shares of no par value (the "New Shares")
for cash, at a price of 23.1p per share, a premium to the Company's net
asset value."

If the purchaser had wanted to buy the shares on the open market the price would have been between 23.25p and 23.4p. Of course a buy of this magnitude would have blown the price up considerably.

Our management have allowed someone to buy 1.5m shares at the price you and I could only sell at.

This has been a recurrent theme over the last few weeks so I thought I'd take a look the company documentation. It says "New Ordinary Shares may be issued only at a premium to NAV, at the Board’s discretion and providing
relevant shareholder issuance authorities are in place."

I'm not sure what the relevant shareholder issuance authorities are but intend to find out.

As far as I can see the management are issuing new shares to their own benefit and to the detriment of existing shareholders.

Am I missing something?

[dogberry202000] 14/6/2018 19:15

What stunning big buys at the close, adding up to 1.5m plus. Bullish!

[bmcb5] 14/6/2018 18:18

Well that's quite a chunky buy at the close today

[bigtbigt] 13/6/2018 11:57

FYI...
A new uranium investment vehicle, Yellow Cake, is listing on AIM next month with plans to raise $160m at IPO

[quepassa] 12/6/2018 15:36

"The Uranium Bull Market Just Reached an Inflection Point and Has Officially Started"

A great headline and a great read by Katusa Research.

Convincing.

Let's hope they're right...


hXXps://katusaresearch.com/the-uranium-bull-market-just-reached-an-inflection-point-and-has-officially-started/


Elsewhere, sector bellwether Cameco continues leading the sector , up by 50% to C$15+ since its Feb nadir at $10m. - And another fundamentally strong sign in many ways is that Geiger have issued several tranches of new equity which underlines buoyant investor appetite for the sector.

ALL IMO. DYOR.
QP

[dogberry202000] 11/6/2018 16:42

GCL trying to raise some cash. It's not hard to guess why they want it.