As a "STEM" professional, and knowing a lot of STEM professionals, all that I know who do investing consider the idea that volatility = risk to be stupid. Maybe you were thinking of the wannabe-STEM people.
Not at all. I was speaking recently to the AI team of a big audit company, and they all assess risk as volatility. Apologies anyway for the generalization Steve, I’m sure a lot of you understand the concept of risk like I do. When I was studying a mathematics degree at university, they also considered risk the same as volatility, which didn’t make sense to me back then either. All the best, thank you for the comment.
No need to apologize, but appreciate the gesture. And when you describe those sub-groups, your comments makes sense. No need to go down that rabbit hole. But as you studied at least a little math, you will get this - it is actually possible to set up the modeling of risk based on how you and I would define it. (Not worth the work to me!)
No disagreement with your nuclear thesis, but LCOE is pretty flawed and so the Rijksoverheid chart included is not very supportive. That is both a comment on its validity and the numbers shown.
It would be nice if society could get past the silly "waste" debates and actually have discussions on depletion - re-enrichment realities.
You put a lot into this piece - it is appreciated.
There has been considerable effort in modeling, but models do not equate to reality. Of the models, COVE at least tries to incorporate the effects of intermittency, but to really apply it requires a fair bit of data and it is (properly) location dependent. So it could be applied to a given location.
To illustrate the problems of intermittency and location, let's consider two locations and solar only. In the U.S, the average is about 25% loading for solar. That is, on average, over the year, six out of 24 hours solar is effectively being converted into electricity with a good system. But base load is needed 24 hrs, and so the common argument is that to get solar to provide base load, the system would need to have a capacity 4x base load needs, with an associated storage capacity to compensate. Now this thinking badly under-estimates the problem, but let's go with it for the illustration. Let's imagine two locations in Washington. Eastern Washington is sunnier and drier, coastal Washington is overcast and drippy. They are not both at 25% solar loading. If Eastern is at 25% and coastal is at 20% (I don't know what the actual numbers are in Washington, again this is just to illustrate) then instead of 4x, coastal Washington would be at 5x. That is 25% more solar plant, 25% more storage required. Take a look at that chart again - think about the variation in costs resulting. (BTW I think Germany has about 12% solar loading.)
It doesn't make sense to compare costs for base load to something that can't provide base load. It can be done sensibly for adding onto an existing system, at a local level.
The cost measures that represent reality are either delivered electricity costs, or utility-level generation costs (including transmission).
A una valoración < $0,05 EV/lb con una ley promedio de > 1400 ppm
El accionista mayoritario es China Uranium Development Co una de las 2 únicas compañias china con autorización del gobierno chino q puede exportar y importar uranios a 🇨🇳
Lleva un +40% en el último mes y capitaliza muy poco
Tiene proyectos muy pequeños y por lo tanto poco probable que se desarrolle. Lo de China es más bien un pasivo que un activo tal y como están las cosas con el gobierno australiano y China
Very good article. I also believe it makes no sense to own uranium miners at this point. On the other hand, there are many opportunities to get multiples of what physical uranium can offer at this point too. I also believe DMX offers the best value here.
You are not alone in DMX, by the way. Some of the greatest investors of all time have not publicly disclosed their positions there, but you can tell they’re involved with this company by some of the comments they’ve made. I believe they got in during the last private placement on February 1st.
What percentage of your portfolio have you allocated to that position? Something close to 3%?
Isn’t Yak likely to get shut down? “I have on many occasions noted that there are tax and regulatory reasons why we cannot be a publicly traded business where the primary assets are marketable securities. Therefore, we MUST purchase over 25% of an operating business in the very near future. Unfortunately, we have not been able to identify any attractive opportunities and have started to lose confidence that we will be able to identify a sufficiently attractive opportunity. If we cannot find a suitable acquisition in the near future, we will likely choose to liquidate this Company, so as not to burden shareholders with the costs of a public company.”
Hi Kyle. I think its very small, as Rick Rule says "a big mine is as risky as a small mine", so why bother with the small players. I agree with that view. Back in 2017-18 when I started in uranium the CEO of WUC was very vocal (on a CruxInvestor interview, Im sure you can find it) about how they had all the permits already and it seemed to me like something hard to believe. Im not sure I trust him. Hope it helps
What are your thoughts on playing physical uranium via Uranium Royalty Corp? Also, would YAK be considered a PFIC for the tax purposes of a US investor like SRUUF or URNJ are?
No idea about the PFIC question, sorry. Regarding URC, I dont like the company´s valuation, more so considering the conflict of interests it has with UEC. A few of their royalties are most likely never going into production
Just FYI, URNJ is not a PFIC. Its ISIN is US85208P8086, registered in the USA.
I have tried playing UROY as a substitute for physical Uranium given that it now owns 2.5m pounds of physical, but it seems to behave much like a commodity CEF that is perpetually valued at a significant discount to NAV.
Thank you Gamboleer. I have posted your comment in the chat so others can read it too. I hope that is okay with you, if not, let me know and I will delete it. Thank you for the comment and information
There actually is a way URNJ could become a PFIC despite being registered in the USA, which would be if 50% of its market cap were in non-USA companies that had only passive / investment revenue, e.g. DNN from its U308 holdings. But it is nowhere close to this threshold.
Excelente trabajo Alberto, una vez más gracias por compartir tus conocimientos y tu labor altruista en divulgar información de calidad. Respecto a este artículo, ahora ligeramente comprendo el papel entre RR y el Uranio, a través de SMR. Respecto a esto último, considerando los fundamentales del U308 tanto en la actualidad como a largo plazo, ¿Qué opinión tienes respecto a los SMR en virtud de la necesidad innegable de producir - almacenar - transportar combustible nuclear? (desconozco el estado del arte actual, sin embargo y por ejemplo, NANO Nuclear Energy?) Gracias de antemano! Un saludo
Gracias Andy. No conozco a fondo NANO pero creo que es muy complicado saber que empresa tendrá un diseño de SMR exitoso. $SMR ha tenido muchas turbulencias en bolsa debido a sus diseños y permisos. Respecto al almacenamiento: no creo que sea un gran negocio, el uranio tiene una densidad energética altísima, y por lo tanto en poco espacio puedes almacenar mucho uranio. Un saludo
1. Cameco is losing money at these prices, do you see operational leverage there?
2. We need twice the production of Kazakhstan by 2035 to meet demand. The US or China do not have that kind of reserves or output potential in any reasonable time frame
I´m really impressed about your work. Well done! Congratulations !
As a "STEM" professional, and knowing a lot of STEM professionals, all that I know who do investing consider the idea that volatility = risk to be stupid. Maybe you were thinking of the wannabe-STEM people.
Not at all. I was speaking recently to the AI team of a big audit company, and they all assess risk as volatility. Apologies anyway for the generalization Steve, I’m sure a lot of you understand the concept of risk like I do. When I was studying a mathematics degree at university, they also considered risk the same as volatility, which didn’t make sense to me back then either. All the best, thank you for the comment.
No need to apologize, but appreciate the gesture. And when you describe those sub-groups, your comments makes sense. No need to go down that rabbit hole. But as you studied at least a little math, you will get this - it is actually possible to set up the modeling of risk based on how you and I would define it. (Not worth the work to me!)
No disagreement with your nuclear thesis, but LCOE is pretty flawed and so the Rijksoverheid chart included is not very supportive. That is both a comment on its validity and the numbers shown.
It would be nice if society could get past the silly "waste" debates and actually have discussions on depletion - re-enrichment realities.
You put a lot into this piece - it is appreciated.
You are welcome Steve! What cost measure do you think would better represent reality?
There has been considerable effort in modeling, but models do not equate to reality. Of the models, COVE at least tries to incorporate the effects of intermittency, but to really apply it requires a fair bit of data and it is (properly) location dependent. So it could be applied to a given location.
To illustrate the problems of intermittency and location, let's consider two locations and solar only. In the U.S, the average is about 25% loading for solar. That is, on average, over the year, six out of 24 hours solar is effectively being converted into electricity with a good system. But base load is needed 24 hrs, and so the common argument is that to get solar to provide base load, the system would need to have a capacity 4x base load needs, with an associated storage capacity to compensate. Now this thinking badly under-estimates the problem, but let's go with it for the illustration. Let's imagine two locations in Washington. Eastern Washington is sunnier and drier, coastal Washington is overcast and drippy. They are not both at 25% solar loading. If Eastern is at 25% and coastal is at 20% (I don't know what the actual numbers are in Washington, again this is just to illustrate) then instead of 4x, coastal Washington would be at 5x. That is 25% more solar plant, 25% more storage required. Take a look at that chart again - think about the variation in costs resulting. (BTW I think Germany has about 12% solar loading.)
It doesn't make sense to compare costs for base load to something that can't provide base load. It can be done sensibly for adding onto an existing system, at a local level.
The cost measures that represent reality are either delivered electricity costs, or utility-level generation costs (including transmission).
excepcional . gracias por compartir!
Hey Alberto, many thanks for this highly appreciated article. With GLO currently sitting at 0.47 CAD, are you tempted to buy?
No
Qué opinas de Energy Metals $EME
A una valoración < $0,05 EV/lb con una ley promedio de > 1400 ppm
El accionista mayoritario es China Uranium Development Co una de las 2 únicas compañias china con autorización del gobierno chino q puede exportar y importar uranios a 🇨🇳
Lleva un +40% en el último mes y capitaliza muy poco
Tiene proyectos muy pequeños y por lo tanto poco probable que se desarrolle. Lo de China es más bien un pasivo que un activo tal y como están las cosas con el gobierno australiano y China
Hi Alberto,
Very good article. I also believe it makes no sense to own uranium miners at this point. On the other hand, there are many opportunities to get multiples of what physical uranium can offer at this point too. I also believe DMX offers the best value here.
You are not alone in DMX, by the way. Some of the greatest investors of all time have not publicly disclosed their positions there, but you can tell they’re involved with this company by some of the comments they’ve made. I believe they got in during the last private placement on February 1st.
What percentage of your portfolio have you allocated to that position? Something close to 3%?
Thank you John, Im glad we agree. I bought DMX a while ago and Im up quite a bit. I think its like 5% of my portfolio at the moment.
ASPI is my preferred way to invest
Uranium tech firms are out of my circle of competence, so I much rather watch from the sidelines. Thank you for the comment
Well done!
This work deserves recognition. You've got a new subscriber.
Thanks for sharing!
Thank you Adrian!
Isn’t Yak likely to get shut down? “I have on many occasions noted that there are tax and regulatory reasons why we cannot be a publicly traded business where the primary assets are marketable securities. Therefore, we MUST purchase over 25% of an operating business in the very near future. Unfortunately, we have not been able to identify any attractive opportunities and have started to lose confidence that we will be able to identify a sufficiently attractive opportunity. If we cannot find a suitable acquisition in the near future, we will likely choose to liquidate this Company, so as not to burden shareholders with the costs of a public company.”
Considering it trades at a discount and the liquidation would probably imply a ROC (tax free), I would be very happy with that outcome
Buenas tardes Alberto
Me gustó mucho la guía, he quedado atrapado hasta que la he terminado de leer (igual que la de PGM's, la de oro). Es muy interesante, muchas gracias.
Gracias a ti Fernando
any thoughts on Western Uranium & Vanadium (WUC)?
Hi Kyle. I think its very small, as Rick Rule says "a big mine is as risky as a small mine", so why bother with the small players. I agree with that view. Back in 2017-18 when I started in uranium the CEO of WUC was very vocal (on a CruxInvestor interview, Im sure you can find it) about how they had all the permits already and it seemed to me like something hard to believe. Im not sure I trust him. Hope it helps
thank you, I appreciate the response. I agree with your take, I like George but hard to tell if he's spinning webs or if he is just wildly ambitious.
No problem! Any other questions don´t hesitate to ask
What are your thoughts on playing physical uranium via Uranium Royalty Corp? Also, would YAK be considered a PFIC for the tax purposes of a US investor like SRUUF or URNJ are?
No idea about the PFIC question, sorry. Regarding URC, I dont like the company´s valuation, more so considering the conflict of interests it has with UEC. A few of their royalties are most likely never going into production
Just FYI, URNJ is not a PFIC. Its ISIN is US85208P8086, registered in the USA.
I have tried playing UROY as a substitute for physical Uranium given that it now owns 2.5m pounds of physical, but it seems to behave much like a commodity CEF that is perpetually valued at a significant discount to NAV.
Thanks for the clarification
Thank you Gamboleer. I have posted your comment in the chat so others can read it too. I hope that is okay with you, if not, let me know and I will delete it. Thank you for the comment and information
Sure, that's fine. I think more awareness of PFICs would benefit the commodity investing community in general.
Thank you Gamboleer
There actually is a way URNJ could become a PFIC despite being registered in the USA, which would be if 50% of its market cap were in non-USA companies that had only passive / investment revenue, e.g. DNN from its U308 holdings. But it is nowhere close to this threshold.
https://www.pewresearch.org/short-reads/2024/08/05/majority-of-americans-support-more-nuclear-power-in-the-country/
Excelente trabajo Alberto, una vez más gracias por compartir tus conocimientos y tu labor altruista en divulgar información de calidad. Respecto a este artículo, ahora ligeramente comprendo el papel entre RR y el Uranio, a través de SMR. Respecto a esto último, considerando los fundamentales del U308 tanto en la actualidad como a largo plazo, ¿Qué opinión tienes respecto a los SMR en virtud de la necesidad innegable de producir - almacenar - transportar combustible nuclear? (desconozco el estado del arte actual, sin embargo y por ejemplo, NANO Nuclear Energy?) Gracias de antemano! Un saludo
Gracias Andy. No conozco a fondo NANO pero creo que es muy complicado saber que empresa tendrá un diseño de SMR exitoso. $SMR ha tenido muchas turbulencias en bolsa debido a sus diseños y permisos. Respecto al almacenamiento: no creo que sea un gran negocio, el uranio tiene una densidad energética altísima, y por lo tanto en poco espacio puedes almacenar mucho uranio. Un saludo
You should probably say that Kuppy's hedge fund exploded in 2008 and he lost all the money..
1. Cameco is losing money at these prices, do you see operational leverage there?
2. We need twice the production of Kazakhstan by 2035 to meet demand. The US or China do not have that kind of reserves or output potential in any reasonable time frame