Is there finally certainty for the uranium market?

After 18 months (that felt like dog years), President Trump finally ruled on the Section 232 petition on U.S. uranium imports. 

The president had wide latitude on his ruling… He could have chosen the Department of Commerce’s recommendations, come up with his own solution, or opted to do nothing at all. 

The petitioners were hoping for a 25% quota… But the commander in chief rejected the petition—against the recommendation of Commerce Secretary Wilbur Ross.

As is often the case, the headlines don’t depict the whole story. 

Rather than imposing restrictive quotas, the president commissioned a working group to conduct a thorough review of the whole nuclear fuel cycle… 

The group’s findings could have many implications for the uranium market.

 Arthur Hyde, a partner at Segra Resource Partners uranium fund, joins me today to discuss the implications of the Section 232 ruling and our thoughts on the working group [10:57].

Transcript

The Mike Alkin Show | 66

Is there finally certainty for the uranium market?

Announcer: Free and Clear, the Chatter from Wall Street. You’re listening to Talking Stocks Over a Beer hosted by hedge fund veteran and newsletter writer, Mike Alkin who helps ordinary investors level the playing field against the pros by bringing you market insights, and interviews with corporate executives and institutional investors. Mike sifts through all the noise of mainstream financial media and Wall Street to help you focus on what really matters in the markets. And now here is your host, Mike Alkin.

Mike Alkin: We’re in the dog days of summer. It is July 15th, 2019. I don’t know where you are, but where I am here in New York and parts of northeast, it’s hot, sticky and humid. We just call that regular summer. I got to experience that full on this weekend as my son played in a lacrosse tournament in Hershey, Pennsylvania, the home of Hershey Park, the home of Hershey candy, Reese’s peanut butter cups. And what was supposed to take three hours and 47 minutes when we got in the car on Long Island, Waze said three hours, 47 minutes to Hershey Park, PA. We were driving, heading right by New York City, around it because it’s an island. Long Island is an island, so 120 miles long it’s… I don’t know, at its widest it’s seven miles, but it’s narrow, a couple of ways in, a couple of ways out.

To get out if you’re going to New Jersey or Pennsylvania, you either can go south over the Verrazano Bridge or you can head up north and go over the George Washington Bridge, and you know when you come to these things, just settle in. Just because you’re going to go two miles an hour for an hour. You just accept it, the infrastructure in New York is a calamity, it’s grotesque looking. It’s a shit-show. But you just say, okay. Take a deep breath and do it.

The one thing you always want to avoid is, if you know the New York geography, the island of Manhattan, which connects to Long Island… to get to Jersey, which would then get you to Pennsylvania. You could also rather than going through those bridges, go through Lower Manhattan and go through the Holland Tunnel and a little bit further north on the island is the Lincoln Tunnel, but you don’t typically want to do that because getting from one side of the island of Manhattan to the other, which is… I don’t know, a mile, can be a calamity, so you always try to avoid it. You just settle in; say I’m going to the Verrazano or I’m going to the GW and you just deal with it and you move on.

As we’re getting to the point driving on the highway, where we were supposed to go to the George Washington Bridge, Waze had a traffic rerouting, and it said, “Okay, we want you to go over the Williamsburg Bridge in New York and in Brooklyn and it will take you into Lower Manhattan and then you’ll go through the Holland Tunnel.” I looked at that and said, “That’s not going to work. On a Friday afternoon with people trying to get out of the city, I am not going through Lower Manhattan.” I then decided, “Let me check the alternative routes,” because we were in traffic, heavy traffic, and it had all the alternative routes were saying Holland Tunnel. I said, “Wow, there must be something going on.” I tried to find out if there is an accident on the GW, is there something I’m missing. It said no. I was driving, I had to make the cutoff decision. What do I do?

I said, “Always trust in Waze.” Remember last week I talked about Waze, and I said my wife is smarter than Waze. Well my wife wasn’t in the car, she wasn’t there, and she would have told me, take the GW. You know this better than Waze. Even though last week I said I believed her after all that time I finally believed she knows better than Waze. I said, I’m going to trust Waze. So we went through the Holland Tunnel. We went over the Williamsburg Bridge in Brooklyn, got into Lower Manhattan. We had to go at the tip of the island there. It’s not even a half a mile… three hours and 15 minutes later we got out of the Holland Tunnel. We literally sat in a parking lot for three hours and 15 minutes. My trip, the three hour and 47 minute trip wound up taking seven and a half or so hours to get to Hershey, Pennsylvania.

By the time we got there I was… let’s just say frayed, and I can’t think of the last time a nice cold Guinness went down, so quickly and nicely. And as a matter of fact, three of them did. But Hershey, if you’ve not been to Hershey, it’s interesting. The whole town of Hershey is built by Milton Hershey, the founder of Hershey and he set up a school for under-privileged children years ago. And they’ve got the factory, the town smells like chocolate, but the streets are Hershey-type names, and the street lamps are Hershey Kisses. That’s what they look like. Obviously, it’s all about the Hershey Company, but it’s also near Amish Country, so it’s beautiful farmland. But the fields that they played on, I don’t know how many teams were there, one two, three… I’m guessing 50 teams came in.

Lacrosse is big now in the whole country in the US, but the hot bed is the northeast and mid-atlantic, Virginia, Maryland, Long Island are really where it’s at. So, teams converge from all over, and they converted this farm field into a beautiful complex. But you sit out there all day. The team has a tent in between games, but the kids will play three, sometimes four games in a day when it’s 95 degrees, and it’s cooking out there, so you’ve got to keep them incredibly hydrated. But you don’t realize, you just sit out there, and you’re there and my son’s a goalie. Being a goalie parent is tricky because it’s either, hey, great save or oh, God. They walk away after he’s let up a crappy goal. But that was my weekend. On the drive on Friday it was a lot going on. There was a… you laugh sometimes, you just say, you’ve got to be kidding me in terms of how timing works out, but we were well prepared, so it didn’t matter at all.

Friday was the day that press release rumors came out about Section 232. For those of you who follow uranium over the last 18 months two US miners filed a petition with the Department of Commerce called the Section 232 filing, which is an arcane petition that allows industries or companies to petition the Department of Commerce when they believe that the industry they’re in is under threat from… and the US national security is at risk due to foreign competition and imports. There was a filing 18 months ago by two US companies, and it created quite a stir, so there was a lot going on.

Friday there was a rumor that finally the Department of Commerce had ruled back in April and now President Trump was going to give his findings and Friday rumors came out, and extreme volatility in the uranium space. We were positioned, Sachem Cove, the fund I run was positioned quite well for it so we were fine. I was keeping up on the news this weekend. My evening was spent at… Saturday night, Saturday after the game, came back to the hotel, kids ran around, they did whatever they did, and I did some work. And then Saturday night I went to Hershey Park, and if you haven’t been to Hershey Park, it is like going to Disney. The kids have such a great time, but it is the greatest people watching in the world. It’s unbelievable. You just sit there, and it’s hard to explain the cross-section of people, and you listen to conversations, and it just makes the time go by.

But they had these big turkey legs. If you like big turkey legs, god bless you. But I notice it’s always the people who maybe should mix in a salad that are walking around with these monster turkey legs and 64-ounce Cokes, drinking it. And you say, my goodness, gosh, no wonder why the healthcare costs are so high in this country.

Anyway, busy weekend. Lacrosse, Section 232. But we’re going to get right into it today. We’re going to talk about Section 232 and to do that I’m going to bring on a good friend of mine and also another uranium hedge fund manager who lives in the uranium world like I do, he and his partner. I’m going to bring on Art Hyde. You probably know him as Arthur Hyde, but those who know him well call him Art and he is the co-portfolio manager and partner at Segra Capital Management and Segra, like Sachem Cove, focuses on uranium and that’s it. We’re going to bring Art on, and we’re going to kick around 232, and we’re just going to sit. I’m going to drink my diet Coke and Art’s going to have his cup of coffee. We’re going to get him on the phone, we’re going to talk uranium. So, without further ado, let’s get Art on.

Arthur, AKA Art Hyde, Segra. How are you?

Arthur Hyde: Hey, good morning Mike. How you doing?

Mike Alkin: Good. Doing well, Art. Thanks. My nerves are a little frayed, I was telling the listeners before I got you on that what should have been a three hour and 47 minute drive to Hershey, Pennsylvania to go to a lacrosse tournament wound up taking almost seven and a half hours on Friday. Driving around the east coast to play lacrosse sometimes can fray your nerves in the traffic we live in here. As you know all too well.

Arthur Hyde: Well, a seven hour drive after the market on Friday must have been a lot of fun for you. I can imagine.

Mike Alkin: Big news… really big news Saturday, but the Friday the rumors came out on Section 232 where there were no quotas placed by President Trump on the US utilities to have to buy US uranium, but a lot came out of that so why don’t we… What are your thoughts as to what the ruling was and how you see this starting to play out? We’ll just kick it around. We’ll wing it.

Arthur Hyde: Sure, I guess I’d first like to say I know it’s an unfortunate result for the petitioners and I know them well and I know that they’re great guys, very hard working. They put a ton of effort into this, and I’m sure it was a bit disappointing to see the headlines out on Friday morning. I know there was some silver lining in the release that came out later that night and I’m sure we’ll talk about that. But I think those guys have all the right intentions and worked very hard to put this in place so that’s unfortunate. I would say, with that said, the note that we put out to our investors on Sunday morning was 232 decision flash note, an optimal outcome for our uranium thesis. I don’t think we’re being hyperbolic there.

From our standpoint, from a patriotic perspective it is unfortunate and very sad that the US is losing its place in the global fuel cycle. I think if you just think of the commodity itself, the outcome of 232 could have been a real headwind had a full quota system been put in place. [crosstalk 00:13:40].

Mike Alkin: Talk about that a little bit more. Drill down on that.

Arthur Hyde: It’s very simple math and this is where I think, we’ve talked a few times, I think a lot of the pundits and individuals on Twitter, et cetera, they have been out saying a positive decision for 232 is going to be a huge catalyst into the bull market. We’ve been very skeptical of that thesis. We haven’t really understood it. What would clearly been positive for US producers, from a global standpoint, it’s adding 10-12 million pounds of relatively unaccounted production into a market that’s in the process of healing from an extreme bear market. So, no matter how you cut it, those 10-12 million pounds likely would have pushed the thesis back a bit.

We’ve been of the view, similar to you, that a resolution is prudent no matter what. Getting past this, giving some sort of regulatory certainty to buyers that they know how to plan for the coming decade is clearly positive. That being said, a 232 [inaudible 00:14:55] would have been unmitigated negative for the broader uranium thesis and I don’t know why many individuals couldn’t grasp that. Again, while we’re sorry for the petitioners [inaudible 00:15:09], I think if you’re a uranium bull and you think that we’re close to a turn in the cycle, you should be all the more excited this morning.

Mike Alkin: You know, Art, we long held our view at Sachem Cove, my view publicly has been, like you said, good guys working hard and from a patriotic standpoint. We see the fuel cycle in the US is a calamity, and do think there is risk there, but had this petition not been filed price discovery would have occurred a long time ago.

Arthur Hyde: Correct.

Mike Alkin: And both of them, the US guys, because I don’t want to speak for you, I’ll let you speak. We think there’s a massive deficit right now and that keeps getting bigger. And the utilities don’t recognize that, we think consensus is wildly wrong. We think the consensus is made up of a handful of entities and we think that during price discovery and the significant quantities in the term market, that would be recognized and it just delayed everything. Had 232 not been filed, the petitioners would be getting contracts like everyone else would be getting them. What’s your view on that?

Arthur Hyde: I think, and I think in our first discussion I stated that had 232 never come to the fore, Cameco’s decision to shut down McArthur River would have had a much larger impact when you talk about the physical market and you talk about contracting. And so it’s been an interesting year and a half or so. I think generally what you’re seeing is continued supply disruption or supplies taken offline. I think you’ve seen relatively positive demand headlines since the petition went in and when I think about demand, I think about both the reactors being announced in the emerging markets also the new generation of reactors coming on grid in China, which I think was a big question mark for the demand side of the thesis and that’s now kind of out of the way. The answer is I think it’s given us a year where price discovery has been paused, everybody stood back and it’s allowed the fundamentals of the thesis to improve without stock prices reflecting that.

So if somebody has been trying to put a fund in place to take advantage of the cycle, it’s been a real gift. I think you feel somewhat similar on that. But if you think about how hard this would have been to implement, I mean our worries were maybe less about the 10-12 million pounds, because I think again, those pounds would not have changed our thesis one iota given how we see supply and demand shaping up in the future. And more just would have been a timing issue. So to the extent that these quotas that they haven’t put in place just the regulatory, the compliance factor making sure that these utilities had a good grasp around what the requirements were, how they were going to track pounds, putting a global tracking system in place, understanding how this impacted not just the uranium portion of the fuel cycle but conversion and enrichment, it’s a complex process.

There was a lot of cooks in the kitchen I think at the government level. It wasn’t just Commerce, it was the DOD, DOE. And so, I think if the decision had gone the other way, you could have seen six to 12 months of just getting our arms around how this is going to be carried out. And again, it just would have delayed the thesis a bit more. And so, today we sit here with relative certainty about what the regulatory framework looks like. I know there’s this 90-day working group in place. That may have some impact, but I think broadly we have a much clearer picture of what the future looks like and that’s good for the thesis.

Mike Alkin: Let’s talk about the working group. We view it as positive for the US nuclear power industry because we think what will be revealed or uncovered when they really analyze it is what you have been saying, we’ve been saying. It’s been decades of decay in both nuclear power. Obviously it’s been hurt by natural gas. It’s been hurt by wind and solar subsidies, but it’s a very burdensome regulatory environment. But also on the fuel cycle itself where uranium production has just imploded to basically nothing in the US. There’s only one conversion facility. Enrichment, a very important stage where you have to enrich the uranium.

There is no domestically owned enrichment capabilities in the US. So, we think that whether it leads to some sort of relief for the nuclear power plants, and who knows what shape or form that could take, or less burdensome permitting for the miners or maybe some enrichment opportunities, we think net-net, it’s a positive for both the US miners, but we also think for nuclear power in general, which by extension is good for uranium miners. Because we think there is a chance. In our modeling going out forward, we take out several reactors in the US over a period of time, and now there’s a possibility to see a little bit of relief there. How do you guys think about this?

Arthur Hyde: I think that was kind of the surprise in the announcement that is definitely net positive. I think the mining side… We’ll see, if I’m being honest, I think the petitioners went down the road of 232 primarily because it allowed the Trump Administration to act unilaterally, and really just make a decision. The extent that the working group is successful in whether it’s a shift in permitting or something else that helps US mining, I think the question is what process they have to go through to carry out. So does this get wrapped up in Congress. I think the picture is just a little less clear, and so while I think versus the simple no, it’s definitely a positive. I can’t really handicap how that impacts their business models in the short to medium term.

What I would say is for the thesis in general it’s great. The US needs a complete restart when it comes to nuclear power. How we think about it, how the government is involved, how we incentivize new technologies. And I think the Trump Administration has been positive, but this is the clearest signal that they’re really going to get to work and try to solve some problems. And so, from my standpoint, I agree. Consensus takes out 12, 15, 17 reactors in the US by the middle of the next decade. I think that’s big into most estimates. To the extent that we can extend the lives of our current reactor fleets, to the extent that the ground [inaudible 00:22:42] support we’re seeing at the state level for things like general emissions credits and subsidies can gain some steam, that’s terrific. I think that represents an upside to consensus and that’s before you build in any sort of right-tail risk like small modular reactors or something of that nature.

So if the US can really get a game plan together, bring the relevant industries together and start to focus on the nuclear industry as one unit, fuel cycle, utilities, et cetera, clearly positive, so we agree there.

Mike Alkin: Pretty amazing though when you think about how asleep at the switch, and actually President Trump talked about it in the release that they put out on Saturday with his ruling, is just over how many decades, this period of time the fuel cycle has been allowed to implode, and it doesn’t matter what party has been in power. It is stunning to see how this happens and has unfolded right in front of their nose for something that when you think about the dependency on nuclear power for the US electric grid at 20%. And you think about the role of nuclear weapons from the largest and greatest power the world’s ever seen in terms of military presence. And the role that nuclear plays. And the role it plays in the Navy in powering so many of the vessels.

When you really dig deep and drill down into what has happened, to me it’s staggering that it has been allowed to get to this point. I don’t know what the history books will eventually show, but how this has happened is almost unforgivable from a US prospective.

Arthur Hyde: I think we can go down …

Mike Alkin: A rabbit hole.

Arthur Hyde: [crosstalk 00:24:41] an easy hour on what’s gone wrong in the US to get us to this point, but we wholeheartedly agree. I think you are starting to see a shift in sentiment certainly relative to a few years ago. There are guys like Michael Shellenberger out making the case for nuclear relative to renewables and how incorrectly stated that argument is in the general press. And when you look at things in an apples to apples basis, I think that’s incredibly important and competitive. I’m hopeful that that shifts, but I think the biggest shift for the industry at large is that there’s no natural advocate.

If you look at oil and gas, the greatest trick the devil ever pulled was convincing the world that natural gas is clean, but it was good marketing. It was a well-funded career campaign to say that this is a friend of the environment. Whether or not it’s actually accurate, it did shift public opinion, and you don’t have that same kind of well-funded marketing presence from nuclear, and the entities that should be advocates, utilities, can’t exactly sit there and point the finger at natural gas or coal, et cetera because they tend to have diversified [inaudible 00:26:03]. There’s not that many sure nuclear utilities out there.

That lack of a natural advocate, I think the WNA does a terrific job trying to market the space, the technology, but at the end of the day in the US it’s battling a much better funded lobby from the other side. And so, until either common sense prevails, and we understand how important this resource is or you start to get some sort of funding, I think it’s a bit of a tough battle, but I’m hopeful that changes.

Mike Alkin: Well, the opponents of nuclear have played the fear card. They play the nuclear waste card, the play the Chernobyl card, and they play the safety card which ironically, nuclear, statistically is the safest form of generation. But also, in the US [crosstalk 00:26:55]-

Arthur Hyde: Well, what’s nice is for once… Sorry to interrupt, but for once what’s nice is we have the counterpoints. We have Germany. We didn’t have that eight to 10 years ago. We have the examples of what happens when you shift away from this resource. So I think the positive, and you look at what Macron is saying in France, and what a lot of nuclear power advocates are saying across the globe is generally when these units go offline, it drives up the cost of power. Drives up the carbon footprint, makes the grid less efficient, and to the extent that that resonates with people, which I believe it’s starting to. Again, given where consensus is for units in the US specifically, I think most of the risk is to the right tail.

Mike Alkin: Yeah, totally agree. I totally agree. You know, in the US it’s interesting because nuclear power that’s owned by the utilities, it’s not the only form of generation they have. They have other forms of generation, so it’s not as though they’re coming out and marketing nuclear power as though it’s the end-all be-all. They have wind and solar and they have gas-fired, and they have coal, and so they competing interests, the nuclear reactors, the nuclear utilities themselves. So there were really is not that sound message. I spoke in October at the NEI Conference, Nuclear Energy Institute and Mike Shellenberger was in the same group as I spoke, and he laid it out. He showed going back years and years how they market nuclear power, and it’s always with a gas mask. It’s always fallout shelters, and they tie this message to fear, but then they say it’s clean electricity. It’s like, okay, great.

Let’s talk, we said had they not done this petition that we’d get price discovery and there are deficits, so let’s talk about that. The market, obviously you have Segra Capital, I have Sachem Cove, we believe there is a material difference between our view and consensus view and we believe that… And we’ve, like you, have painstakingly over the last few years, several years now gone country by country, reactor by reactor, political atmosphere in each country, appetite for nuclear power, appetite against nuclear power. And we’ve gone through the sources of primary supply, and the sources of secondary supply, and the inventories. And we come up with, my goodness, there is a massive deficit, and it’s only going to get bigger.

But consensus is so different, what’s your take on that? Are we just two kooks, and a handful of other people that are out there just banging our heads against the wall or how do you think about it?

Arthur Hyde: I think what we tend to spend a lot of our time on is looking at the incentive structure and markets from the buyer and seller side trying to figure out whether we can create a differentiated view by doing on the ground diligence meeting with both sides of the aisle. I think that’s one thing that investors do a terrible job of with this thesis specifically. I’m not going to rag on Twitter too much, I think I’m probably already relatively disliked in that space, and people can blame me. Adam probably does 10% of our tweeting so it’s at the extent that we’re engaging with somebody, it’s probably me, but I would say-

Mike Alkin: By the way, I notice you signed off on one of your recent tweets with Art to let people know, so I assume that was Adam saying, “Listen, you take credit for that one.” For when you get the [crosstalk 00:30:51]-

Arthur Hyde: From my end we probably should just have our own Twitter accounts and do our own speaking, but from my end I think Twitter is an amazing news resource. People had it up on Friday. They got to see all sorts of real-time reactions, to price action, to the release from the Australia news outlet. It’s a fantastic resource and people should use it. I think the worst thing to do when investing is creating an echo chamber that reinforces your current beliefs, and your current positions and doesn’t allow you to hear outside perspectives that may disagree with your own. I think the issue with Twitter is that the vast majority of folks on there, especially in this trade tend to just tweet back and forth how much they agree with each other.

You see fights here and there on single names when somebody’s popping a stock or something, but in terms of a real academic dialogue about what’s driving the space, I don’t see much of it. I think another major issue is investors may talk to management teams on the uranium mining side but I think very few people actually take the time to connect with utilities, talk to people within the fuel cycle, talk to Urenco, talk to folks from maybe other parts of the world.

I think what we’ve tried to do at Segra and I think you guys have done something similar. We went out and we joined the WNA. We go to every conference. We keep very regular dialogue with a lot utility participants at the fuel buyer level. We’re trying to figure out what’s driving the trade from both sides, and I guess I’d say just generally when I react to folks on Twitter it’s because I think if you’re talking to a bunch of guys that agree with you, you can come up with a completely plausible story for what’s driving the market and be completely incorrect about that. And nobody’s going to tell you otherwise because you’re not talking to the right folks.

And so, one thing I say, and not to take this in another direction, I know we can talk about we agree with the deficit, but one thing I’d say Twitter should have paid attention to a little more was the counterpoint by utilities on this 232 petition. I mean, people were on there berating the [inaudible 00:33:09] Twitter account, which I thought was hysterical because generally you don’t speak poorly to your supply chain. This is one connected industry, there should be a symbiotic relationship between miners and utilities. They are their customers.

I just found it hysterical that people get on and berate these utilities as if they were intentionally trying to drive the market lower. I think generally that’s not the case. There are issues with 232 that I thought made a lot of sense where if this is a national security threat, why are we funding it? Why is my rate payer in this district funding a national security threat? Shouldn’t this be something the federal government takes on? Shouldn’t this be something the federal government writes a check for or figures out how to finance? I thought that was a good point that they made.

Another point is just that, hey these are relatively short asset lives. These are generally not 20 or 30 year mines, and so to the extent that you force us to go out and find seven to 10 year contracts, we might be signing a contract that extends beyond the life of the current producing asset, meaning that we’re taking development risks at the utility level which maybe outside of our business mandate. My only point is just to say that there was a lot of argument that the other side was making that complicated the topic, and I think that’s a lot of the reason you got the result you did. And if you’d spoken to utilities, you might have expected it… or at least seen that this was not a no-brainer. This was not simply protecting a US industry. This was also potentially imposing some pretty difficult requirements on utilities, and it’s not just economics. Some of them were logistical.

Mike Alkin: You know it’s interesting [crosstalk 00:35:08]. You know that rate payer point is a good one. I think too, but the whole nuclear industry is interesting in that regard. If you think about there’s a nuclear waste fund that was established in the ’80s that was contributed essentially by rate payers that is $40 billion. When Yucca Mountain and all that was established back in the early ’80s and they were going to do it there. I think they called it the Screw Nevada Bill when they established it, and obviously Yucca Mountain, where it was supposed to be a nuclear repository has not come into play There’s $40 billion in that. There was supposed to be $40 billion.

It was collected and it was rate payer funded, and there’s nothing in that fund now because that was taken by Congress to go pay for other things outside of the nuclear space. The utilities are sensitive to that because here they are, they charged their rate payers in those specific regions to the tune of $40 billion, and then Congress came in and raided the kitty, that should have been taxpayer funded. To your point, there is a sensitivity on that front because they’ve seen this happen once before, so why do their rate payers have to fund $40 billion for nuclear waste cleanup that now has nothing left in that fund.

Arthur Hyde: Let me be clear because I don’t want people to think that I was completely against the petition. I know the petitioners well, and also had been a shareholder. So, it’s not as if I don’t believe we should defend these assets. I think the petitioners made great points as well. I think the largest point is that once these shut down the regulatory framework is such that they’re very hard to run back up. You do have a loss of intellectual knowhow. And I think the idea that we’re just going to be able to turn these on when we need them is incorrect.

I think they made a great point there. And the broader point that right now, the market’s uneconomic for almost everybody. I mean, I think the idea that, this is a potential blip, where we have very, very low prices, which are forcing even the best assets globally to shut down. To the extent that you allow this down market to effectively close the industry in the US. Once that shifts back, it’s going to be very hard. We’re going to have effectively had a short term issue with pricing, potentially permanently impair our ability to participate in the fuel cycle.

And so, that’s where I think it’s really the federal government’s job. I mean, if I was the person making the decision, I think the argument would be, it’s just not a big dollar amount to save this industry. Whether you do it through subsidies, whether you do it through a strategic fund that buys uranium from US production using federal facilities. There are a lot of ways to do it, that don’t soak utilities, but also allow us to retain our position in the mining space. I think there are just maybe better ways to skin the cat. But I don’t want to come off as one sided or potentially pro utilities. I think they both made great points.

I mean, the scariest point for me is, again, just going back to thinking logically, what happens if nothing changes. I asked this to the guy at the UxC quite a bit. [inaudible 00:38:33] analysts too, and I’m always interested in the responses. If we stay at 25 or so for another couple of years, another few years, what do we think happens? I think that’s what market participants should be asking themselves. Some people I think have taken a view that we stay on here then at some point, McArthur has to come online because Cameco is getting squeezed. I think that’s crazy. I think if anything, you’ll see the opposite. McArthur will not come back online. You might even see Cigar shot, to the extent they can’t replace the contract-

Mike Alkin: I’m going to cut you off for a second. Just for those who are just getting up to speed on uranium. So, what Arthur is talking about McArthur is McArthur River, and Cigar is Cigar Lake, and those are the two highest grade uranium mines and largest uranium mines in the world owned by the Canadian mining company Cameco. Each produce about 18, 19 million pounds of uranium, and the grades of uranium are by orders of magnitude. The highest grade in the world, which means, in theory, they’re the most economical, because you have to move less rock, and because of the higher grade that you get out of each ton of rock.

McArthur river was shut down, put on care and maintenance over a year now, because Cameco could not make the money that they needed to make to keep that mine running at these uranium prices. And what Art’s referring to on Cigar Lake is Cigar Lake reserves run out in 2027. And to get to the next phase, they need to spend huge amount of capitals with a B attached to it. Dollars Bs, billions, to get that to where they need to be. Then the market thinks that at some point in time, McArthur has got to come back online. So, that’s what Art is referring to. So, didn’t mean to interrupt you there Art. Just wanted to [crosstalk 00:40:36]. Go ahead with your point in that.

Arthur Hyde: I sometimes get that there’s a lot of lingo in this industry. What I’d say is, and I’m not talking about Cigar coming off in 2027. I have no knowledge of exactly how Cameco thinks about it. But if I were in their shoes, and I had something like two and a half, three years of contracts left, which you can see their contract book, they publicly disclose it. It rolls down pretty hard. I wouldn’t be waiting till 2027, and selling in the spot market for the last four or five years of that asset. I would probably proactively shut it down the way they have McArthur.

The reason I would do that is because let’s think of the globe. Once that asset is offline. You would now have no production from Canada. You would have the Kazakhs, who… who knows, maybe they ran but it’s a $25 environment. We’ve met with them many times. I see no indication that you’ll see that. So, they’ll continue to producing you know around what they are today. You’ll have byproduct production mainly out of Australia. You’ll have Namibian production, which with the sale of Rössing will go pretty much exclusively to the Chinese. Then you got production out of Niger, which if you just follow headlines around Toronto maybe coming down. It’s not going offline completely due to both the economics, and the fact that the quality of the mines are deteriorating there.

I guess globally, you’re sitting there saying, Niger could become impaired. Namibia goes directly to China. You have byproduct out of Australia, and then you basically have Kazakhstan and Pakistan. And so, I think you have to think, do utilities in the US, utilities in Europe want to have basically all of their uranium production coming from Eastern Europe and Central Asia, or byproduct production out of Australia? I just don’t see that happening. I think it would be extremely shocking. And so, I think either the price has to go up and incentivize those towns coming out of Canada. Or you face a really scary situation in the uranium market. And so, most of the time when I go down that line of reasoning, nobody really has a good answer for me. For what else could occur.

Mike Alkin: Yep. Let’s talk about let’s talk about Kazakhstan. Let’s talk about state owned entities. Let’s talk about supply demand. We put out in our flash note, by the way we both called it a flash note, and we did not coordinate that. So, in our flash note, consensus thinks that tier one assets, and state owned entities will be able to fulfill the production gap. And we think that’s just flat out wrong. There’s not enough capacity and production to be able to fill the deficit that we see. How do you think about the existing tier one production, lowest [inaudible 00:43:57] production, state owned entity production, and its role in filling the supply gap? And its role as this market evolves?

Arthur Hyde: Well, I guess I’m just trying to make sure I understand which assets specifically you’re referring [crosstalk 00:44:13]-

Mike Alkin: Well, let’s first start [crosstalk 00:44:14]. Yeah, let’s off with the state owned entities that most people will point to, and they’ll talk to Kazakhstan, and they’ll go to China with who [inaudible 00:44:25].

Arthur Hyde: Yeah, talk about [crosstalk 00:44:25]-

Mike Alkin: And obviously, Uranium One, which produces almost all of their production out of Kazakhstan.

Arthur Hyde: Yes, so well, I mean, listen, I actually think the Kazakhs get a bit of a bad rep. I’ve spent a lot of time with them. I think they have changed their tune. I think they are focused on value over volume. I think the IPO of that entity is incredibly important. If you look at other entities in Kazakhstan that would like to go public over the coming years. So, I think they’re the real deal. I think they are going to hold the line, we’ll see. I understand there’s a lot of skepticism given their past in this space. But I would just say that most sell side models have them ramping back up to or close to their peak production even though they’ve got a projection of uranium prices at 30 bucks. And I just don’t see that. I very much believe that when you speak to them, their confidence in the long term of this market is extremely strong. And I don’t believe that they’re willing to sell the family jewels at the loads.

Anyway, I’m relatively confident that they are steering the market in the right direction. They’re being both a responsible counterpart to their utility clients. And from at least what we’ve seen so far, kind of a good corporate entity when it comes to uranium mining space. And so, I think, do they have the ability to ramp back up some pounds? Sure. Do I think… even by their estimates, it comes anywhere close to filling that demand and supply gap. It doesn’t. I think that’s what leads them to their long term confidence in the sector.

Mike Alkin: That’s the thing. It’s so much of this is putting a mosaic of information together. I see so often, whether it be Twitter or people who reach out to me and say, but the Kazakhs can ramp production to 72 million pounds, and I say, “Who cares?” I don’t think they will. I think to your point, they will be value over volume. I also think that they have not spent what they need to spend to be able to do that, and I think Kazatomprom has been more of a foreign currency play the last several years because of the dramatically depreciated Tenge. I think they’re competent. But I think there’s been a lot more going on than just, hey, them taking massive market share. I think they’ve benefited from a really strong dollar and a really weak Tenge. But people will say, “Well, they can ramp production.” But in the global landscape, when you put it together doesn’t matter. Let them produce that, there’s still a deficit.

I think that there’s both a combination of they’ll have to spend a lot of capital. They also have a large commitment on a dividend depending on where their debt levels are. A big portion of their free cash flow has to go get paid in a dividend. So, we think there’s a number of moving parts there from this largest miner in the world that… or largest producing country in the world, that’s not such a no brainer. But even if they do produce it the rate that people think they can that it still doesn’t solve the problem. What’s your view on Chinese production? A lot of people point to China, and they’re going to ramp up Husab, and that’s in the numbers. How do you think about that?

Arthur Hyde: I think not that it doesn’t matter. It certainly does. It’s incremental supply, and I think that they’ve shown that they’re willing to try to ramp up to the extent they can. I thought last year’s production number was impressive. We’ll see if they can sustainably operate the mine at that level. But I would point back to, and I kind of do this a lot. It’s already in consensus. I believe that to the extent that Husab gets scaled, that would just be fulfilling what’s already in supply and demand projections. So, I don’t really view it as a risk. I would also say that those towns again, just don’t come back out in the market. We certainly talk with entities in China. And while they may trade pound back and forth [inaudible 00:48:48] on a net basis, that’s going one direction.

Now, if that ever changes, maybe that asset will impact the global market a bit more. But as of now, that goes directly into China. So, I don’t think those are for sale for US or European utilities. And so again, if they were going to go out and develop three new Husabs on economic prices to show that they could, that would be one thing. But given where it’s producing now versus its stated capacity, even if they ramp it to full, which obviously there’s tons of skepticism on, and I won’t comment what our view is and what our projections are. But even if they were, I just don’t think it really shifts the thesis all that much.

Mike Alkin: And so, as you go through state owned entities, how do you guys think about, there’s the primary mine supply we just talked about McArthur and Cigar, and you think about other new projects that are needed. One of the things in our view is that when you look at demand, nuclear power is a growth business. There is, as you mentioned earlier, there is that sentiment shift towards nuclear power, you know, maybe we do need this stuff. And, you see it too. I think a lot of people forget that we talk about wind and solar. And absolutely, wind and solar is growing, and it’s growing significantly around the world.

I mean, over the last decade, you’ve seen massive amounts of capital spent in it, but because of the intermittency, and as you mentioned earlier Germany is a great example of this where as long as storage costs are prohibitive, when you are at a grid scale. And you are replacing one reliable fuel source, with wind and solar in the case of Germany, you take out nuclear, and you add a lot of wind and solar, but now you need backup, and that backup is coal in many instances or natural gas. And so, you don’t see that carbon net carbon reduction.

When we’re talking about demand we see that there is a steady state demand for nuclear power around the world. When we see that we look at these, we look at it from the supply side, that there are obviously the state owned entities, but we see demand growing in… We can see it growing one and a half plus percent a year. If you catch a few things right we can see it’s a growth business. So, when you guys are doing your modeling, and you’re thinking about it, and we go draconian on closures in many places, but how do you guys come fall on the demand side of the equation?

Arthur Hyde: I think we’ll probably stay away a little bit from our specific projections only because we tend to be a bit tight lipped about it. I would say that we model everything reactor by reactor. I think similar to what you’re saying. We certainly have draconian assumptions around closures of current units. Again, I think most of the surprises in that category will be to the upside over the coming years. Because given our current assumption based, it would be hard to just point lower. But I think what I can talk to you is what people should look at. The supply side of this market has driven commentary for a while, and that makes total sense.

The demand side, if you really want to focus on it, China’s five year plan, you’ll probably see draft out at the end of this year, maybe early Q1. Their last plan was clearly very pro-nuclear. It set out some very lofty goals. And well, listen, this industry has gone through such a down cycle that you tend to get a lot of skepticism and gallows humor, even if you’re at the conferences. You talk to the fuel buyers, you talk to industry participants, everybody’s a bit skeptical that anything’s going to work out. I think that’s just a recency bias that the industry tends to have. And so, when they refer to China say, “Yeah, well, but they’re probably going to miss their 2020 target.” And the answer is, they’ll miss it by a very small margin on a relative basis.

What China has been able to do in this space, over the last decade, over the last 15 years, is nothing short of amazing. If you compare it to what the rest is of the globe has done with nuclear power. And so, I think focusing on that five year plan, getting to see how they’re updating their targets, looking to see if they specifically focus on one technology or another, looking to see if they update the schedule for potentially putting plants inland, which is obviously a key for the build out schedule. That will be chock full of information. And so, what we spent a lot of our time doing is trying to talk with consultants and individuals and country getting a sense for what’s happening both at the central government level, because she is obviously pro-nuclear, but also trying to get a sense for what’s happening at the local government level.

So, which sites are being cleared? How realistic we think new builds are in various locations over the next three to four years, I think there’s a lot of work to be done on that front. And I just don’t think that’s the type of work most investors in this space are spending their time on. You can say demand is a given, but you’re going to make all your money by understanding the minutia on that side. And so, my only point would be, there’s a lot of work to be done. This is an emerging market story. That’s why we’re involved in it. I would say that your average investor, you can talk to companies about their mining presentation, what holes they drilled yesterday, but the thesis is going to work or not work based on the more macro characteristics. And that’s where people can really get smart.

Mike Alkin: It’s all macro. I mean, if you don’t… I don’t want to speak for you. But I will say one of the things several years ago when we started really drilling down into the numbers, and when I started talking with uranium companies I was surprised at how few of them not all, but many don’t. Were really driven by consensus macro uranium numbers. They could tell you every drill hole and every dollar spent there. But few really had taken the time to understand the macro story. And like you just said, this only works if you get the macro right. Because otherwise the macro will drive, will keep prices down. And that was part of with our thing to 232 petition was if this thing was never filed, prices are going to go higher anyway, because they have to because there’s a gap between supply and demand. And there’s not enough inventory to fill it, mobile inventory. And there’s not secondary supply is going to come off. So if you don’t get the macro right, it’s all it’s all noise anyway.

Let’s… so, demand you [crosstalk 00:55:40]-

Arthur Hyde: But I’d say one point on that, Mike. I would just say that I think choosing the right company that was where you get your whole [crosstalk 00:55:47].

Mike Alkin: Oh, 100%. [crosstalk 00:55:49].

Arthur Hyde: The macro is very important, but we’re not of the view that you buy a basket-

Mike Alkin: Oh, God no.

Arthur Hyde: … of kind of everyone. You get a little bit in this jurisdiction, you wait. I understand if you’re a retail investor, and you have somewhat limited ability to have contact with companies. And so, your single main work is just limited by your position that you are where you are. But I think the value is going to be created by understanding the assets that need to come online into the next cycle. [crosstalk 00:56:18]. The assets that utilities are going to want to contract with. I mean, that’s something that people don’t spend much time on. But your average utility doesn’t want to contract with somebody for a few hundred thousand pounds. I think there will be core companies that drive this next cycle.

Understanding who they are, and why they have a pathway to production, and value realization is the key. Because there are some companies in this space that I don’t care almost what price you give them, I don’t think they’re worth a dime. And some CEOs may really dislike me for saying that. But to the extent that people like something, because it’s got a low market cap, or it’s cheap on a per pound basis, or some insane metric like that, I just think you’re setting up to either being deluded into… I just think, we’ve spoken about it before, there’s a ton of snake oil in this space. There’s a ton of lifestyle companies. You need to understand what you’re getting into. And understand what you own. And people may think they’re doing that, but I’m not sure it’s always the case.

Mike Alkin: Yeah. We couldn’t agree more. I mean, that for sentiment, you see, you’re like us. We don’t comment at all publicly about companies. Once in a while if on the podcast I have a guest who’s the CEO of a company, I’ll say whether or not we own it. And if we do, I say, don’t buy it because of us, because it could be a tiny position or a big position. Please don’t own something because we own it. We could have completely different reasons for owning something. But we don’t publicly comment on it. And when I see some of the… And this is where you talk about Twitter being a great news platform. When we look at and follow some of the companies, and some of the people that promote themselves, or people who are talking about what’s working, what’s not. We do deep dives on the assets, as do you.

It’s in the mining business. It’s tough, it’s promotional. And people need to recognize that especially during a bear market for companies to survive, they’re always doing capital raises. And look, we get that. We’re not worried about where the capital raises were, we look at the share account today, and what we think the projects could… the enterprise value in the future based on the projects they have, and we take into account dilution, future dilution that’s going to be needed to bring a project online. But there really is a lot of snake oil, so you got to be real… In the whole mining industry. Right. And so you have to [crosstalk 00:59:14]-

Arthur Hyde: Well, the whole industry around it, right? Not to go [inaudible 00:59:17] too many enemies, but there’s a huge industry around whether it’s newsletters or cap intro, et cetera. There’s a massive industry around basically selling blue skies, selling hope to some retail guy, so that a company can continue to exist, and pay itself. I mean, people that have been in mining forever, not news, but I think if you’re new to the space, and you’re coming over either as a generalist or you’ve never really done much investing. Understanding how perverted the mining industry can be, is the first lesson.

I mean, you’ll learn it the hard way a couple times. But at the end of the day, if you get offered, hey, I got a warrant that’s 15% above worth trading now, and it’s good for a couple years. And, you know, blah, blah, blah, blah, blah, what could go wrong? Well, what could go wrong is that you’ve got a four month hold on that, and all these companies go up 20 or 30% on the raise. And they’re almost always lower by the end of that four month hold. So, anyway, I’m not trying to pick on anybody. I’m just saying that it can be a tough space.

And so, having a quality lens, understanding how the management team operates. You might have… there’s just different kinds of CEOs. There’s the CEO that’s always trying to sell the M&A angle. He’s like, these guy is in the data room. You’d be surprised by what kind of guy is in the data room, and it’s kind of like once you’ve had a few of those meetings, you understand that, that could all be just his personality. And you treat everything with a bit of a grain of salt, I think you’ll have a better view of the market.

Mike Alkin: So, Art, so here we are. Obviously, you know we don’t give our numbers out. You don’t give your numbers out. We think there’s deficit, you think there’s a deficit. Obviously, we think that primary supply and secondary supply won’t be enough to meet the numbers. So, we won’t get into the nitty gritty on those details. That’s proprietary to Segra. It’s proprietary to Sachem Cove. We maybe throw a little bone out there and just say what our view is. And people need to do their own work on that. So, now we have this 232 mostly behind us because there is this working group, and you never know what comes out of it. But for the most part, I think utilities will feel that hey, [inaudible 01:01:43] or at least that they think right now.

How do you see this market unfolding? Now that we have a little bit more certainty involved here where do you see over the next if you were to… I don’t want to pin you to a timeframe, but hey, we have to put capital to work like you do so. So, over the next six to 12 months how do you see this market evolving? And that’s the first stage, now where do you see the market going over the next couple of years?

Arthur Hyde: The next couple years is a great question, and I wish I had a crystal ball. I would say, again, I think this is a big event that’s now out of the way. I think it’s certainly positive. But I want to kind of maybe caution folks that think they’re going to see a headline next Tuesday about all this [inaudible 01:02:27]. I just don’t think that’s really how uranium works. And I think poor expectations has hit this market before. And so, my argument would be over the next three to six months, you’re going to start seeing a meaningful shift in utility sentiment. And I mean, trying to go out and figure out where to contract and at what price.

Part of the problem is just that I actually think some of the current price indicators might be a bit misleading. So, you’ll see a $32 long term price posted. But I think when I talk to most market participants it’s not real. There’s not really pounds for sale there. There isn’t really long term fixed contracts being done anyway, a lot of it is market related. And so, I don’t think anybody really knows what a pound should be worth in 2025. I don’t think it’s very clear where sellers are. And so, that price discovery has yet to take place. I expect it to in the relatively near future. But I don’t believe the utilities turn around and start contracts tomorrow. If anything, today’s a sigh of relief.

But here’s what I would say. When I spoke with utilities a year, a year and a half ago, and I started talking about security of supply and making sure they had a contract book that protected them from a rise in price over time. If I did that a year and a half ago, they would laugh at me. I remember they’d say, you know, hey, we’re pretty well covered. We’re in kind of peak delivery years here from the previous contracting cycle. And we don’t really need to go out and get active. What I think section 232 has done is allowed them to sit there and say, “Okay, where is our supply really coming from?” They’ve been thinking about kind of nonstop for the last year and a half.

And so, I do believe that for them, it would be a huge relief just go out and contract some of their pounds. The issue is, and we’ve talked about this before, they need cover to do so. We’ve talked about the psyche of sitting in a fuel buyer seat and saying, “Okay, well Cameco tells me the price is 45 or something. And I see the market price on screen is 25.” Who’s incentivized to go out and tell their boss I think we should lock it in? It doesn’t compute. It’s not the role of these fuel buyers. And so, I think you need to see the market start to tell them that higher prices are needed, whether that’s through a much higher in spot, which I think we could certainly see in the fall. Whether it’s maybe a couple of contracts getting done higher than that 32 number saying that people are willing to start to cross the bid offer.

But I think for your average fuel buyer, they need to cover to contract. I mean, it was even brought up in Lisbon at the World Nuclear Fuel Conference. Scott Melby asked a representative from Exelon, are you budgeting for your fuel cycle to be filled with $25 uranium? Because if you’re doing that, I think it’s maybe a bad assumption. And this is in front of 200 people at a large event. And she basically said, “Listen, we’re not saying that we think 25 is correct. We just don’t necessarily think that today 65 is.” So, it’s a question of what initiates that price discovery. How quickly does it occur? Do they tend to move together? Yes. But do they have an incentive to be the first one out of the gate, nobody does.

Mike Alkin: And to that point on [crosstalk 01:06:22]. Today at 25, you don’t know that 65 is the right price. But when you look back historically, and we put this out in our letter with the behavioral psychology is of the fuel buyer, considering security of supply is their number one thing, when you get to 50, or 65, you don’t know that 50 or 65 is the right price. What comes into play is to make sure you have that supply. And what drives it from 25 to 50 to 60 is price discovery.

And so, when security of supply is your number one thing you’re going to do what you need to do to secure supply. Again, it’s all at a point in time, because to your point, who wants to run out at 25 and do that? Now there will be a fuel buyer or two or three where they don’t have to take it up to the C suite. And they can buy that uranium contract and 45 or 50, whatever that price may be, and you start to get a few of those and you start to see it starts to take hold. And it’s a water cooler business. They want to know they’re paying the same as everyone else pays, and when word starts to get out that leaks out there, and they can start to see that stuff. So we… yeah.

Arthur Hyde: I agree. But the only other thing I’d say there is, let’s also just think about how difficult a decision that is today in that seat. I just think, again, this is what investors haven’t done a good job of, which is putting themselves in a fuel buyer seat and seeing what’s driving the decision making process. It’s very hard to sit down today and saying, “I’m going to be the one that decides to pay 100% premium with the market because I think this secures a place, you could be that big a deal down the road. Versus if you’re sitting in the seat towards the peak of the cycle, and you have spot at call it 85 or 90 bucks, and you have term at 65. Spot is overshot term. You can go to your boss and say, “Hey, I know spot is 85. I’ve got a deal to get a $20 discount and lock in 10 years.” It’s a no brainer.

That’s an easy argument to make to the room. You say, “Hey, I’m getting a discount, and I’m locking in for a long time. Who knows? This thing has gone wild, and I don’t know where it stops. I mean, I think that, yes, they operate in herds. Yes, they tend to once prices move, and again, the market gives them the okay that it’s the right time to start contracting they tend to. But it’s also just in one case, you’re locking in a discount from period of time because you judge the end spot. In the other you’re locking in a premium at a point where nobody else is locking anything.

Again, I’m not saying that, that’s not a bearish comment. That’s a comment to say, why has it gotten to this point? I think a lot of people that first approach, say, “Oh, well.” If it’s a relatively small percentage of their cost then uranium is looking like it’s bottoming, and we know that most of the production curve is losing money at these levels. Why not lock in some? The answer is because to really lock them in, you’ve got to go so high in price with the current producers if you want a fixed price contract, that you really have to stick your neck out, and that’s what’s been hard to do.

Mike Alkin: Yeah, that’s good point. I think someone did, though. I mean, Cameco added to their contract book, and I don’t think they would have done it around these levels.

Arthur Hyde: No, I agree with that. But that’s the question, right? People have asked, “Well, why didn’t that get reported to UxC or why didn’t UxC include that in their contract?” And the answer is because Cameco’s reporting structure is relatively straightforward. It’s their counter parties option to disclose the contract or not. And again, I don’t want to speak for Cameco. Everybody can do their own diligence, and talk to the team if they’d like. From my understanding they don’t do selective reporting. They think from a regulatory standpoint, that’s a bad business model, and I agree with them. So, to the extent that their counter party wants a trade or a contract reported to UxC, they report it to the extent they want it confidential, they keep it confidential. And the idea that most of these didn’t find their way into UxC updates after that Q1 release shows me that whoever is willing to go out and stick their neck out and contract a little supply doesn’t want other people knowing it’s them.

Mike Alkin: That’s right. But if you think about just when you step back and just put yourself in your mind’s eye and look down on the room and the chessboard, Cameco basically said, we signed a contract, and it’s at a price that we were okay with. And we know what prices they’re okay with. It’s not these levels. So, when you start to get… it takes… That’s what you say it doesn’t happen overnight, but it’s one foot in front of the other, and then someone else does that. And somewhere along the way, it has to start getting reported, and people start to get a sense for what’s going on.

Look, it’s one of the most opaque market… It is the most opaque market or one of that I’ve ever seen, and it’s a funky reporting system. It’s a funky structure. It’s opaque. And these things take time. It’s a game of cat and mouse. It’s a game of chess, but at the end of the day in our view is there’s a deficit and eventually that will get caught. That will get captured in price discovery.

Arthur Hyde: We completely agree. Listen Cameco got stuck with… I mean, not to talk about one company. It’s probably not the point of the podcast. But I fully believe that they thought that they would have a very large up move in their stock price the day that they announced this contract. The idea that utilities are willing to cross that bid offer and start to lock in supply is a huge positive for the space. And I believe that the team expected the space to recognize that. Unfortunately, there was a couple headlines about what I think are unimportant Japanese sales, and a couple comments around it being a buyers’ market. And so, it wasn’t realized. But I think on the whole, especially the 232 behind us, the idea that those contracts are being struck is extremely positive. I would hope that in our next call, you see more of the thing.

Mike Alkin: Yeah. Agree. Any final words of wisdom for the listening audience?

Arthur Hyde: I guess I’d all say is just to reiterate my point. One, I think this decision is a really, really huge positive for the space. I think people that disagree with that reach out to me directly. I just-

Mike Alkin: Careful what you wish for.

Arthur Hyde: [crosstalk 01:12:55] viewpoint. Yeah. So, I think it’s huge positive for the space. I’d say the primary beneficiaries are ex-US either developers or [inaudible 01:13:05] assets that certainly move forward in the line of potential pounds out of the ground. And I think that the 90 day working group will be extremely interesting. My expectation is that the benefit probably is for the broader sector in general, and I would hope to see further headlines in that in the coming days. But I think almost the bigger catalyst in the horizon now is actually China’s five year plan. So, I would encourage folks to maybe do a little diligence there, and start to focus on the end of the year.

Mike Alkin: Great point. As always buddy, great catching up.

Arthur Hyde: Thanks a lot, Mike.

Mike Alkin: Well, I hope you enjoyed the chat with Arthur Hyde from Segra. Art and Adam who run Segra, and we speak to them. We’re friendly with them, good friends with them. And for many years we’ve shared a similar view on the uranium space. And so, I hope that added a little… shed a little light on our views on 232. And where the market overtime is headed, and we’ll be back next week. Take care. Thanks.

Announcer: The information presented on Talking Stocks Over a Beer is the opinion of its hosts and guests. You should not base your investment decisions solely on this broadcast. Remember, it’s your money, and your responsibility.


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