Goldtent TA Paradise

Ux

1. Buck says:

   February 2, 2024 - 9:14 am at 9:14 am

   Typically, when some company announces significant drop of planned production, stock drops. But in this case, Kazatomprom stock shoot up 10%:

   https://stockcharts.com/h-sc/ui?s=KAP.L&p=D&b=4&g=0&id=p97833976158

   Reason is, there is such a mismatch between demand and supply that uranium shoot up almost 6$ on this news: https://numerco.com/NSet/aCNSet.html

   And whole uranium sectors was of course up, here is sample of 12 stocks:

   https://stockcharts.com/freecharts/candleglance.html?CCJ,KAP.L,NXE,SRUUF,PALAF,UUUU,DNN,UEC,YLLXF,LEU,GLATF,BQSSF|B|0

   Kazatomprom produces about 20% or world production. This smaller production will impact already strained supply. Oh they announced smaller production for 2024. But their planed production for 2025 is much much higher, not in line with previous years. There is no way they can meet that one. Which means there will be in the future another announcement about how they will not be able to meet 2025 production goals.

   First they said they can’t get hands on enough acid. Many didn’t believe this excuse. It just doesn’t make sense. Rick Rule always praised management and being one of the smartest.

   So, there are some cynics, who are speculating, they are deliberately reducing production, since this way uranium price is going higher and they get more money for less uranium.

   Whatever is the real reason, who cares, they will produce less uranium. Others are reducing their planed numbers as well. Orano, Cameco, Rosatom…

   I’m looking forward to see, how this all ends. Current world production is lower than current demand. Demand is rising. More nuclear power plants are being build. They are extending life of existing one. While demand is for last few years bigger than demand. And it is only getting bigger. There were some reserves, some secondary supply which is also now mostly gone. To solve all this, uranium prices will have to go higher.

   There is enough uranium in the ground. But not enough produced. Development takes time. Finding big enough reserves, permitting, finding proper extraction technique that works for that particular geology, building the mine… All this takes time, especially in the west. 10-15 years. Africa is faster.

   I’m comparing this with lithium which is this year bottoming out and there may be some good entries for making some money. But with lithium one plays on future demand. Uranium on another hand has current demand problem.

   This all being said, we are not at the beginning of uranium cycle. Many stocks are already up multiple times. But we are not at end either. And until supply manages to meet demand… there should not be top in place. We should have years ahead of us.

2. Buck says:

   February 2, 2024 - 9:18 am at 9:18 am

   > Kazatomprom produces about 20% or world production.

   Hmm, can’t recall now proper numbers. Maybe Kazatomprom produces 16% of world production and whole country produces 25%. Regardless, it is by far the biggest uranium producer with the lowest cost of production. Any significant change at Kazatomprom will affect uranium market.