Yellow Cake Share Discussion Threads

[kinbasket] 12/10/2021 12:21

Finland lobbies nuclear energy as a sustainable source

....the Finnish government will lobby the European Union to declare nuclear power as a sustainable energy source....

As reported by the Finnish Broadcasting Company (YLE), the government’s alignment to lobby nuclear as a sustainable source marks a near U-turn within the Green Party sitting in the current five-party cabinet. Traditionally the party has been fiercely anti-nuclear and has resigned from previous governments over the issue. Its views have become more pragmatic, and the Greens now claim to have a technology-neutral attitude when it comes to fighting climate change.

[jonwig] 12/10/2021 09:30

FT has another informative article on the uranium market. Snippets;

Funds such as Ben Melkman’s New York-based Light Sky Macro, Anchorage Capital and Tribeca Investment Partners have been positive on the outlook for the raw material, as a global energy crunch highlights the role of nuclear power in a transition away from fossil fuels.

“We’ve been patiently waiting for something to happen for a long time,” said Ben Cleary, of Tribeca Investment Partners in Singapore, whose fund is up 345 per cent net of fees this year. “Clearly there’s speculative money coming back into the sector, there were massive price moves in September.”

Canadian asset manager Sprott has catalysed the price rise with significant buying of uranium, but investors say the broader energy transition is highlighting the key role of nuclear — a low-carbon source of baseload power.

The rapid rise in natural gas and coal prices to fresh highs this month has exacerbated an energy crisis in Europe and China, and has “placed uranium back in the spotlight”, said Rob Crayfourd at CQS New City Investment Managers.

“The political fallout of this energy crisis will be a greater willingness in the west to extend the life of the existing reactor fleet,” he said. “It has focused governments on the benefits of secure supply of energy from the nuclear fleet. We expect that to lend support [to prices].”

Light Sky’s founder Melkman, who was previously a partner at hedge fund Brevan Howard, has gained more than 5 per cent this year, said a person who had seen the numbers.

“Light Sky Macro sees an immediate and sizeable opportunity in the uranium sector, making it one of our highest conviction views for 2021,” he wrote in a note to clients, seen by the Financial Times, earlier this year.

A drawdown of inventory during the coronavirus pandemic has compounded tightening supply, while demand is expected to surge in the coming decades, added Melkman, who has been investing in the sector since 2018.

“The growing focus on ‘green energy’ at a political level and the growing demand for [sustainable] assets in the investment community should turn uranium into one of the most asymmetric trades for the coming years,” he wrote, meaning that the possibility of potential gains far outweighs the risk of losses.

Also profiting is Sean Benson, founder of London-based Tees River. His uranium fund, which buys equity stakes in uranium miners, is up 115 per cent this year.

Benson argues in an investor letter, seen by the FT, that a deficit of supply relative to demand and a “very supportive” climate change agenda mean that “the current uranium cycle is better than the last on every fundamental metric”. His Critical Resources fund, which invests about one-third of assets in uranium, is up 44 per cent this year.


NB. "Better than the last" - and that was $136.

[jonwig] 10/10/2021 11:26

Tropical cyclones are caused by equatorial warming. Global stilling by the temperature gradient between equator and poles. The two are perfectly consistent with each other.

[7kiwi] 10/10/2021 11:14

Wind will always be intermittent that requires backup or expensive storage.

But don't pay too much attention to the climate change crusties. They simultaneously believe in "global stilling" and increased frequency and intensity of tropical cyclones.

They're just trying to deflect from the fundamental deficiencies of wind to run a modern economy.

[jonwig] 10/10/2021 10:13

The FT has an article on "global stilling" - wind speeds across northern Europe have been as low as 50% of average for much of this year. This explains a part of the current energy crisis, as renewables can't take up the load. Our UK gov't is unlikely to spell out that our renewables contribution to energy supply is far below expectation.

The phenomenon is thought to be caused by the poles warming by more than the equator, reducing the temperature gradient. If so, it won't be just a passing phenomenon.

Personally, I'll be divesting from any renewables trusts which hold significant wind assets in their mix, but the most obvious implication is for nuclear energy to be a larger and more urgent contributor.

[hpcg] 03/10/2021 21:22

I got the total from here at the end of the day on Friday, when I posted:

I find all those calculations unconvincing because it implies a significant component of our consumption goes into building generation, when we know very little does. In the UK our oil consumption is almost all for transport, and gas not used for electricity is used domestically for heating and cooking. Yes we've outsourced energy consumption now, but not a lot of plant was built.

Also I find the space element bemusing; I think this is a function of being in England which makes us think everywhere is crowded when even in Europe most places are open.

- search it on satellite.

And it is all really a waste of time, because what matters here, especially for further decent games, is the money Sprott, and possibly Yellow Cake, can raise to buy Uranium Oxide.

[7kiwi] 03/10/2021 09:47

I've done a bit more digging on EROI calculations. It seems to me that the EROI depends on who is doing the study.

First, there's this one,

It puts wind at 16 (without storage) and 4 (with storage). It doesn't seem to differentiate between onshore and offshore wind. Solar PV at 4 (without) and 2 (with storage).

Nuclear is 75. With gas and coal at 28-30.

Then there's this study which turns that on its head:

This puts wind at 20 and solar at 6.

Then nuclear is 5. Natural gas is put at 7 and coal at 18.

So, depending upon your source, you can make any argument you like.

[7kiwi] 02/10/2021 00:42

Looks like we've moved back to a bit of a premium.

[7kiwi] 02/10/2021 00:41

hpcg,

I think there might be a bit of exaggeration in there. But the underlying messages that:

a) The Energy ROI of wind and solar is low and
b) The energy density of wind and solar is low and
c) The land/sea area intensity required to produce wind and solar is high

are all true.

And they produce intermittent electricity. Solar is pretty predictable. But the basic physics are that it produces most during the day in the summer when demand is low and nothing at all during winter evenings when demand is high. Wind is highly unpredictable. The wind fleet produced virtually nothing for several weeks just recently. So, back-up fossil fuel generation is required. Running those fossil fuel plants only to back-up wind destroys their economic model.

And you are exaggerating too. 411Gwh, would mean an average of 17GW for the whole day. Looking at gridwatch, it looks about 10GW on average for Friday. From an installed capacity of ~24GW (iirc).

[7kiwi] 01/10/2021 21:30

The case for nuclear. And why wind and solar are not worth bothering with

[the white house] 01/10/2021 08:27

Oklahoma adding again, previous 2 major announcements other US also adding

[quepassa] 30/9/2021 19:18

Global sentiment - for two decades staunchly against- is rapidly turning back in favour of uranium as a major source of acceptable and reliable power generation.

Smaller reactors and modular reactors are being developed alongside the major stations.

There is still a lot further to go for U3o8.

COP26 will put a further nail in the coffin for coal and as a consequence fundamental demand from end-users for U308 will soar.

ALL IMO. DYOR.
QP

[j4ckthehat] 30/9/2021 10:29

https://flipboard.com/article/next-china-coal-crunch-knocks-out-the-lights/f-2c5d066f18%2Fbloomberg.com

[bpdon] 30/9/2021 08:22

Sterling weakness against USD (now 1.343) is helping support the NAV which is still at a small discount.

[weaverbeever] 29/9/2021 21:41

I found this on money week. Its based on when the share price was 3.60. But it's decent information (apologies if this has already been shared) The safest way to play uranium right now is through betting on the spot price of the metal itself – it's less racy, but your risk is lower. London-listed Yellowcake Plc (LSE: YCA) has been set up with this purpose in mind. It is, basically, a uranium holding company – you buy the shares and hope that the value of its uranium stockpiles increases.It is currently trading at £3.60 which gives it a market cap around $550m. It has 13,855,601 pounds of uranium. At $45/lb that's $624m, plus another $90m in cash and assets, so $714m. At a $1.36 exchange rate that gives us a net asset value (NAV) of around £455m. So it's trading at a premium.There are times when it trades at a discount, so personally, I'd wait. But the downside of Yellowcake is considerably less that of a miner, so maybe, if you don't own any, it's worth a nibble.You want to own some uranium in your portfolio; nuclear's potential is enormous. But I've seen what happens with uranium stocks – fortune favours the patient.

[7kiwi] 28/9/2021 10:18

New YCA investor pres out:



In August, SPUT in its own bought more than the entire spot market volume in July.

[bpdon] 25/9/2021 10:54

I have just been referring to old notes and trying to think through some factual context to the Sprott buying spree.

According to YCA in 2020 the total spot market volume for the year was 92.2M pounds. Assuming a 260 trading day year, that is an average daily volume of about 350,000 lbs.

According to Brandon Munro (Bannerman), the average daily volume on the spot market between 1 April and 31 July 2021 was about 250,000 lbs. That's 84 trading days and circa 21 million pounds in total.

Going by @theAlexW data, over 25 days Sprott bought an average of 412,489 pounds per day for a total of 10.3M pounds.

Even if Sprott bought nothing more until the end of the year (another 67 trading days), in their 25 day spending spree, they would still have gobbled up an average of >110K pounds per day which is a third of the total daily spot market in 2020 and nearly a half of Brandon Munros 2021 daily spot numbers.

Investor/speculator momentum has burst for now and I think we have to wait for a new catalyst i.e. a new wave of capital chasing a cyclical and/or seasonal move. Such frantic surges followed by silence on a thin market will create volatility though.

[7kiwi] 24/9/2021 23:03

Bpdon, I was just going to say similar, but you beat me to it.

I make the premium 2.4% with spot at $45 as per Numerco. Bit the BAP is $43.63, which would take it to a discount

[bpdon] 24/9/2021 19:14

According to numerco spot has now drifted to $45 unfortunately. So the YCA discount is currently nearer 3%.

[7kiwi] 24/9/2021 17:07

rota,

Yes, that's the inconsistency in the Cannacord report. $80/lb would equate to c. £6 NAV for YCA, but their target is £5.05. Go figure. I think their target is based on their long term price of $65.