Uranium market comments and an update from IsoEnergy

March 26, 2020

The recent announcement out of Cameco shutting down operations at Cigar Lake for at least 4 weeks has brought renewed attention to the Uranium sector.

Craig Parry, President and CEO of IsoEnergy (TSX.V:ISO) joins me to first outline the significance of the Cameco announcement for the supply side of the Uranium market. We also discuss the recent high grade drill results from the Hurricane Zone at the Larocque East Property. The Company continues to build on it’s discovery from a couple year ago with very high grade U3O8 results.

Click here to visit the IsoEnergy website and read over the recent news.

    Mar 26, 2020 26:10 PM

    Uranium: The Other Yellow Metal to Glow During A Darkening Crisis. Part 1: Supply impacts

    “In this three-part series, Brandon Munro explores why uranium offers a value safe harbour during the unprecedented COVID-19 global crisis. COVID-19 will have a profound and lasting impact on many aspects of industry and commerce as consumer habits change, economies restructure and geo-politics rebalances. The series will consider supply impacts, short term demand impacts and effects on the long-term outlook for uranium.”

    “Part 1 considers the disruption to uranium supply from COVID-19 in light of the suspension of the Cigar Lake uranium mine.”

    “Prior to COVID-19, the uranium sector was already running a deep deficit after unsustainable prices forced supply disruptions in 2018. After allowing for secondary supplies, the 2019 global production of U3O8 was 20Mlbs less than the consumption of uranium in nuclear power plants. Put another way, the sector was running a deficit of more than 10% for a material that has no substitutes and is responsible for 11% of the world’s electricity production. However, this situation defied economic rationale and the uranium price did not respond, setting the scene for lower production in the medium term. The reasons for this price inertia largely consist of two factors: (a) nuclear power utilities choosing to under-buy their requirements, instead drawing down on inventories and (b) utilities preferring to invest in downstream nuclear fuel products such as UF6 and EUP (enriched uranium product). ”

    Mar 26, 2020 26:23 PM

    Uranium spot price had it’s first little tick up in a while on the news from Cameco shuttering its Cigar Lake mine and the last major production of North Amercian production, barring the small amount still produced by Energy Fuels and U-Energy.

    Maybe the first green shoots?

      Mar 27, 2020 27:19 AM

      Now the production supply has been further crimped as the Rossing Uranium Mine in Namibia, that belonged to Rio Tinto for decades before it was sold last year to to China National Uranium Corporation Ltd. is suspending production due to Covid-19.

      27 March 2020

      “Given the outbreak of the COVID-19 pandemic, the Government of Namibia declared a state of emergency and has put certain measures in place that are aimed at stopping the further spread of the virus in Namibia. One of the measures is partial lockdown period for the Khomas and Erongo Region – the Rössing Uranium mine is located in the Erongo Region. As a responsible business CNNC Rössing Uranium is supporting the Government and the people of Namibia in their initiatives to contain the spread of the virus.”

      “As from 28 March 2020 the Rössing Uranium mine will discontinue normal mining operations and enter a period of minimal mining operations. As a safety measure critical maintenance work will continue. Our key personnel will work from home.”

        Mar 27, 2020 27:32 AM

        Uranium spot pricing has moved up to $27.40 as a result of this news.

    Mar 27, 2020 27:39 AM

    Switching gears in the energy space, I sold my XLE earlier today for a profit, but am concerned that the Oil patch has more carnage to come, but it’s unclear which companies will get investor attention or survive.

    Mar 27, 2020 27:51 AM

    Here’s a small Oil/Gas producer I’ve taken a punt on – Delphi Energy.

    Delphi Energy Corp. Provides an Operations Update

    by @nasdaq on 27 Mar 2020

    “Completion operations on the Company’s first three Montney wells (3.0 net) in the 2020 drilling program have concluded, with all of the wells expected to be placed on production by months end. These 3 wells are drilled in liquid-rich West Bigstone, in close proximity to existing pipelines, minimizing the tie-in costs.”

    “Delphi’s realized prices for condensate and NGL in 2020 are well protected by WTI crude oil swap contracts for an average volume of 1,021 barrels per day (“bbl/d”) at an average price of $82.23 per barrel (“bbl”) and Conway propane swap contracts for an average volume of 100 bbl/d at an average price of $43.23 per bbl. In addition, the Company has purchased a put option for an average of 686 bbl/d in 2020 at Cdn$78.00 per bbl and has sold a put option for an average of 686 bbl/d in 2020 at Cdn$58.00 per bbl. ”