Morning Guys,
For those interested in finding out more about Vanadium as a by product of U mining, Energy Fuels (UUUU) is a good place to start looking. UUUU is a US domiciled producer with a Vanadium angle. They have materially outperformed their peers in recent times, although I am not sure whether this is due to their Vanadium exposure exclusively.
PDN's presentation was interesting IMO and three things that I took special note of were:
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Whilst those following closely know:
(1) Ranger is winding down and will certainly close in 2021
(2) Rossing is non-core for RIO and a high cost mine that will lose huge money once its contracts roll off
(3) Husab is Chinese owned and whispers suggest that its production is potentially structurally impaired
(4) Kazatomprom may not be able to sustain current production levels and could see a fall in production of 40% by 2030 (John Borshoff, citing an unnamed Russian Report in the recent interview).
... I don't think the wider/ generalist market is remotely aware that more mine closures are likely in the next couple of years or production estimates will need to be revised lower.
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The above is just what we were discussing in recent days in regards to a major source (26%) of total fuel supply for the Sector.
We were wondering how much this source may shrink by in the forward years ... PDN have provided us with an estimate:
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As per Fightinggreed, it looks like this will drop from the current estimated 48m lb p.a. (UxC est.) for 2018 to just 20m lb in 2022 - a 58% reduction in Secondary Supply ... or 15% of Total Supply.
That's the equivalent of a further 6 LHM's leaving the supplyside in the next 4 years (in addition to the actual mine supply reductions estimated by PDN in the top slide).
This sector is a very skewed risk-reward set up. Whilst the ride will no doubt be bumpy and investors need to have sufficient liquidity to avoid being forced sellers if something temporary comes out of left field (e.g. general market weakness), this sector has to be a great place to invest LT capital with a 3-5 year time horizon.
Cheers
John
(20min delay)
