One to consider for #gold bulls..

The aggregate market cap of ALL listed #uranium co's equates to ~30% of Barrick Gold's market cap (!).

Gives an idea of the small window that capital has to flow into if a U bull erupts.

U bull will make gold bull look like Sunday picnic.

The price of #Uranium to a power plant makes up ~4% of its overall cost after factoring in large upfront sunk capex and opex. So, even if the price of uranium triples from here, there is virtually no impact on the end consumer’s profitability (consumers very price inelastic).

Spot #uranium purchases are often made on a 12-month forward basis.

Means traders may end up caught short if they offered to sell physical pre-COVID supply squeeze. Spot market could get short squeezed as $KAP and others flag “severe” production outages in H2.

Now imagine if Yellowcake $YCA take up option with $KAP to deliver physical, just as $KAP’s production profile falls off a cliff in H2 (due to lagged nature of production from in situ recovery mining methods). $KAP have already stated they have begun buying on the spot market.

Hence, the two largest producers ( $KAP and $CCJ ) have now begun buying into an illiquid spot market. What happens if this persists for another 3+months as traders scramble to cover short positions and supply is further squeezed?

There have been endless calls for a #Uranium bull fall on deaf ears over the past few years, but we may be about to get it now just as investors are blindsided by the impending #gold bull.

I'm with $BMN , $DYL , $YCA