Wall Street Unplugged
Episode: 953September 29, 2022

The simple solution to the world’s energy crisis

Amir Adnani

Amir Adnani—president, CEO, and co-founder of Uranium Energy Corp. (UEC)—returns to the podcast to discuss the “no-brainer” fix to the world’s energy problems: uranium. He shares how Russia is weaponizing energy (after all, sanctions are a two-way street)… the two megatrends behind the uranium bull market… and how the U.S. could end up the big winner here.

Inside this episode:
  • Russia’s impact on the uranium industry [3:25]
  • The supply/demand imbalance is bullish for uranium [9:03]
  • How the US could reap the rewards of the uranium bull market [16:20]
  • Details of UEC’s latest acquisition [21:00]
  • How high uranium prices could go [33:30]
Transcript

Wall Street Unplugged | 953

The simple solution to the world’s energy crisis

Announcer: Wall Street Unplugged looks beyond the regular headlines heard on mainstream financial media to bring you unscripted interviews and breaking commentary direct from Wall Street right to you on main street.

Frank Curzio: How’s it going out there? It’s Thursday, September 29th. I’m Frank Curzio, host of the Wall Street Unplugged podcast, where I break down headlines and tell you what’s really moving these markets. There’s a great interview set up for you today with Amir Adnani, founder, CEO, and president of Uranium Energy, UEC. And uranium is an industry extremely bullish on over the next six months to at least the next three years or longer as prices are about to surge, which you’re going to hear in a minute. I’m not talking about $50 a pound where they are right now. And Amir’s not talking about $75 a pound. He’s talking at 100 to $200 a pound. He’s positioning UEC to be one of the biggest beneficiaries, which includes acquiring two major companies he’s going to talk about.

Frank Curzio: Amir’s a very, very close friend, someone I travel with often. I visited his processing facility in Hobson, Texas, where I was holding uranium, and it was really, really cool. Really, really cool. But I know him for a very, very long time. He’s someone that’s a straight shooter. He’s a CEO that takes investors’ calls, goes above and beyond, someone that I trust. And if you’re an investor in uranium right now or if you want to know why I’m super bullish right now at this moment, definitely give a listen to this interview. And here’s Amir right now. Amir Adnani, thanks so much for joining us on Wall Street Unplugged again.

Amir Adnani: Hey, Frank. It’s always a pleasure. And it’s great to connect to talk about our favorite topic, uranium.

Frank Curzio: Definitely. Again, lots of questions. And I don’t think… I’ve had you on the podcast, but I don’t know if we really dug into uranium as much as we do with gold and things like that. But you’ve been in this market longer than almost anyone that I know to the point where, what was it? 2005? What was UEC? Is that when it started?

Amir Adnani: That’s right.

Frank Curzio: Or earlier than that?

Amir Adnani: No, it was around 2004 that I started writing the business plan for what became Uranium Energy and launched the company in 2005.

Frank Curzio: Talking to you and even our listeners out there, it’s important because you’re not talking about crypto a couple years and people getting experience. And yeah, they got a couple up and downs. You’ve been through everything possible within this, the massive booms, the big bus after Fukushima, and everything going on now. I want to talk about the Russia-Ukraine war and what has that done to uranium, because we’ve seen uranium when it comes to climate change, that it’s deemed like this ugly, terrible thing. And now, we’re seeing people dial that back. And I wanted to get your thoughts on it because now, you’re seeing more and more countries. Not only are they turning you in. They’re actually turning to coal. How is Russia-Ukrainian war compared to other events? Because to me, this is a game changer where I think Europe just realized, “Holy cow, man. We can’t rely on this much energy from one person, especially when we don’t have great relations with them.” But what have that done for the uranium market?

Amir Adnani: Uranium market, first, we’ll work backwards. Just talking about the Russia-Ukraine issue, Russia has weaponized all of these energy commodities, and uranium is no different than that. And what it’s done with the Nord Stream, for example, gas pipeline going into Germany, is that it becomes political leverage when a country like Russia decides to weaponize what is basically energy. And energy, as we know, is life, and it can cause all sorts of havoc. I’m talking to my friends in Germany who are worried that with winter coming, that their monthly energy bill is going to be higher than their monthly mortgage payments. That’s just a really human side of it.

Amir Adnani: And what’s actually interesting to take a look at is that there are protests in Germany right now where people are actually protesting the government putting sanctions on Russia. And they’re saying, “Fuck it, we don’t want sanctions. We just want cheap energy. Bring us cheap energy back.” The problem with that is it’s not even so much Western politics anymore. You may have sanctions, but one of the reasons a couple of weeks ago the Nord Stream pipeline went down is because Russia said, “Oh, it’s down for maintenance.” Russia can turn the pipes off if they decide to. They can have counter sanctions. They can have embargoes.

Amir Adnani: And where it’s a bit different in uranium, Frank, is that unlike gas and gas-fired power plants, the natural gas makes up a very large percentage of the overall cost to run a gas-fired power plant. And the nuclear reactors, it’s totally different. If uranium price triples from where it is right now, people aren’t going to be protesting on the streets saying, “Oh man, we just want to get that cheap rush in uranium. Please bring that back,” or, “Electricity bills are too high.” No, uranium is less than 5% of the cost in an existing nuclear reactor to operate. And so the argument around uranium and we should really consider having our own uranium and not be so dependent on Russia is quite legitimate. And I’m not worried that it’s going to have a bottom line impact on everyone’s electricity bill to get their electricity from nuclear power.

Amir Adnani: So stepping back, we have a vulnerability. We’re depending way too much on Russia for uranium in America. And throughout the world, they’re a big supplier of uranium just like they are of oil and gas. And we have a number of things that have happened recently that you got to pay attention to and say, “Should we really be worried?” Well, the White House a few weeks ago came out and was seeking emergency funding. I repeat, emergency funding, let’s underline the word emergency, of $1.5 billion to buy LEU, low-enriched uranium. That includes uranium enrichment conversion. Why on earth is the White House seeking emergency funding for $1.5 billion? Because they see what’s happening.

Amir Adnani: The issue is we don’t mine any uranium in the US. Uranium that is supposed to come here from Russia from the Port of St. Petersburg, there’s now issues with transportation. Shipping companies don’t want to go Russia anymore and bring material up. Insurance companies don’t want to insurance cargo coming out of Russia anymore. How are you going to get uranium out of the Port of St. Petersburg and on the Eastern sea market? These are all the issues that we’re dealing with. And on top of that, you got the threat that Russia might force US utilities to pay for uranium in Russian ruble. You’ve got the threat of the realities around again, embargoes and sanctions. And so it’s a very complicated mess.

Amir Adnani: But before I hand it back to you, because I covered a lot there, I would really strongly remind everyone before Russia’s invasion of Ukraine, before Russia’s weaponization of its energy resources, including uranium, before all of these, we had a world where we consumed more uranium. The consumption of uranium, the demand for uranium, was way more at 200 million pounds per year compared to 130 million pounds of production. So we came into the Russia-Ukraine situation with already a significant supply deficit. And that supply-demand fundamental was due to an over a decade of underinvestment in uranium coupled with demand all a sudden surging, because anyone that has a policy now towards net zero or wants to decarbonize or increase electrification is including nuclear power in their plants, the Europeans, the Japanese, even here in the US. And so we have to remember that before this issue with Russia-Ukraine became front and center at pinch point of supply, we already were in the best market, at least in the 18, 19 years I’ve been doing this, that we’ve seen for nuclear power and uranium.

Frank Curzio: Could you put numbers behind it and simplify it for people listening, because some of it, it gets confusing. But as we get into 2025, like you said, the supply-demand and balance is why so many people saw uranium as a great opportunity over the past two years. Now, with Russia-Ukraine, could you talk about… Because when I look at the charts and I look to 2035, it seems like it’s a long time. It’s not that far away. But even 2030, 2035, as you go further out, talk about the numbers behind it in terms of how much we use, how much supply we need? Because I think when you put numbers behind it, people are going to get blown away.

Amir Adnani: Well, we need to go look at demand on a reactor-by-reactor basis, when then, it’s one of the best parts about the whole uranium investment thesis. Demand is very predictable. Demand is for electricity generation in a nuclear reactor. And so, when we talk about 200 million pounds of demand annually, that’s because there are over 440 operable reactors in the world today in over 30 different countries. So think about that for one second, over 400 reactors today.

Amir Adnani: Now, China alone wants to build 150 reactors in the next 15 years. That’s China alone, 150. There’s currently over 400. So, demand just from that 200 million pounds per year is expected to grow and rise towards 250 million pounds. And beyond that, as India builds more reactors, as Japan that experienced a very difficult situation with nuclear because of Fukushima in 2011, they’ve come back recently. And then, a major pivot on their energy policy saying they will go back to nuclear energy, restarting their reactors and building new ones. US, we’re seeing a revolution with small modular reactors led by Bill Gates’s company, TerraPower. When you think about how many reactors are under construction, there’s over 60 reactors under construction right now as we speak. And again, it’s not just the China, India story. European Union has changed its taxonomy to include nuclear power and natural gas alongside it, which means more financial incentives to build reactors, small ones or large ones, in Europe. South Korea, Vietnam. In United Arab Emirates, they brought four new units on, two recently, in a very oil-rich, hydrocarbon-rich country.

Amir Adnani: And so again, we have a situation where you see very predictable growth in demand, again, led by two mega trends. You got to remember the mega trends of electrification and decarbonization have placed nuclear energy at the center of energy policy, playing a very important role moving forward for any major economy. Any modern economy or country that wants to address the issues of decarbonization, while at the same time, advancing forward is going to want to basically have nuclear power in its energy mix. So, all of that means, we have very predictable demand profile today and growing.

Amir Adnani: And when you look at that, then you look at the supply side and say, “Is the supply side as predictable in its growth?” It’s currently at 130 million pounds of supply coming from mining, 130. Demand’s at 200 and growing, approaching 250, approaching 300 million pounds. Where does the supply come from? And the supply side is not as predictable because we had zero new uranium mines built in the last decade of any significance. There’s currently no significant new uranium mine under construction. The art and science of building uranium mines has almost been forgotten. One country, Kazakhstan, under major influence by Russia, almost half of the mines in Kazakhstan are controlled by the Russians, led all the production growth in the last 25 years in the uranium industry. And they’re like a single-nation OPEC. Over 40% of global supply is coming out of Kazakhstan today for uranium.

Amir Adnani: But even if that didn’t change, even if you said Kazakhstan is just going to keep selling uranium, so what? That’s only amounting to a supply picture that is still well below where the demand is and where the growing demand is. Where are we going to build the next generation of uranium mines? Are we going to go build them in Russia and Kazakhstan with everything that’s going on and everything we’ve learned? Absolutely not. Are we going to go build them in safer jurisdictions, US and Canada? That’s certainly my view, and that’s basically where we’ve been making our investments with uranium energy. But as you know, it’s not afflicted to switch exercise. Mining takes a long time with permitting. You got to bring in the people. You got to replenish the human capital, and that side of it can take a long time.

Amir Adnani: So my feeling is, Frank, the reason why the bull case for uranium is so positive and tangible is because the supply demand is very clear to see and understand, and it’s very clearly bullish. And we’re going to have to see uranium prices that are multiples higher than where they are right now to have this sustained bull market so that we can see sustained growth on the supply side of uranium from mining.

Frank Curzio: How in the hell is it possible that we have zero uranium mining taking place on US soil, and we’re the largest consumer of it? To me, is it politics? And I know you have Spencer Abraham on your board. I know he’s, again, just the amount of work that he’s done for you and just within politics as well. And you talked about US Secretary Energy from 2001, 2005 and the contacts. Are we going to see more production here? Because now, it looks like Europe’s like, “Okay, we need to turn this back on. We really need to go at this.” It just, to me, it’s mind blowing of how we’re not even thinking of it. We weren’t even thinking about producing.

Frank Curzio: How is it on US? Let’s go US now. I know there’s a couple things that have passed. I know that you’ve been very involved in the political aspect of it in terms of producing. But when do we see this changing? This has to change. It’s going to be a major, major source of energy. Now, we realize the power of some of these countries of how they can control it in other places. But it makes all the sense in the world to actually get this up and running, at least in the US first.

Amir Adnani: Originally, when it was all given up in a way, when domestic capabilities were given up, there was something else being gained, which was really the demilitarization of Russia. What am I talking about? When the Cold War ended, the US was motivated to see the nuclear arsenal that Soviet Union, the former Soviet Union, held get dismantled. And so, the US entered into a treaty with Russia called the Highly Enriched Uranium Treaty where they took a highly enriched uranium from Soviet era warheads that used to be pointing towards the US, and they blended the uranium down from highly enriched to low enriched. And that uranium then got sold to the US market.

Amir Adnani: That went on for 15 years, and it was the largest source of uranium entering the market from early 2000s until 2014. That in essence oversupplied the market, and it drove a lot of US uranium miners out business. But it did something else. It took a lot of missiles and warheads out of Russia and got rid of them. And that was perhaps you could argue the political outcome that was desired. But someone paid a price, and that was the domestic uranium mining industry.

Amir Adnani: Around the time I showed up to the scene as an entrepreneur and wrote the business plan to start Uranium Energy, I saw this and thought to myself, “How could the US, the biggest consumer of uranium in the world moving forward, not regain domestic capabilities?” That was ’05. By 2010, we were mining uranium in South Texas. That was of course before Fukushima happened. But you fast forward to today, today the reality is everyone says nuclear energy is key in playing a central role to meet our energy needs while reducing greenhouse gases moving forward, including the US. One and every five home in America’s powered by nuclear energy. And we don’t mind any uranium domestically, and we’re dependent on Russia, Kazakhstan, Uzbekistan. That doesn’t make any sense.

Amir Adnani: US government agrees it doesn’t make sense. That’s why for the first time since the 1950s, they’ve set up this national uranium reserve to purchase uranium for the governments to town and stimulate the domestic industry. Spencer Abraham, the chairman of my board, former US Energy Secretary, he believes it also doesn’t make sense. Just to use oil as a parallel, when he was Energy Secretary, the US was importing 50% of its oil requirements, and no one ever thought that could change in a big dramatic way. Then, we had the Shale Revolution, and we all know what happened there. Tens of thousands of jobs were created, millions of wells were drilled. The US became not only self-sufficient in oil and gas, but it’s actually become an exporter as well.

Amir Adnani: The same can happen in uranium. We have significant uranium deposits and potential in the US. The US used to lead the world in uranium mining in the 70s and 80s. After the end the Cold War, we gave that up because of the HEU Treaty that I talked about, and now, we’re in a different world. Now, we’re in a world where we can’t sit here and pretend that we can just depend on Russia or even China.

Amir Adnani: Russia and China, according to the Department of Energy’s own reports, cornered the market on uranium and cornered the market on nuclear technology in the last decade or so. They used predatory strategies with their state-owned companies to corner the market. Their objective wasn’t bottom line in profitability. My company would be, UEC would be… We’re a market-based company, where we’re running the company based market-based fundamentals. Chinese and Russian state-owned companies weren’t doing that, Frank. They were just simply looking to grab market share, drive everyone else out of the business, use subsidies to justify mining uranium even when mines should have been shut down because we had an oversupply situation after Fukushima.

Amir Adnani: So the reality is, there is definitely politics involved in this business, in nuclear. It’s a very important geopolitical energy tool and technology. But I think we definitely have more bipartisan support today in supporting domestic capabilities. Again, the Obama White House, the Biden White House, the Trump White House have all agreed on one thing, which is we got to regain our domestic nuclear capabilities and uranium capabilities.

Amir Adnani: And so, I think there’s definitely one of those areas where after 18, 19 years of pounding the table on this, I would say two things are true. It does move very slowly in this industry. Perhaps, nuclear is such a long-term infrastructure play that the supply-demand issues you and I are talking about take a long time to play out, but they are starting to accelerate now. And perhaps certain events, like the Russia invasion of Ukraine, are those catalysts that inject a bit of velocity and create that step change to happen. And I think it certainly occurred here.

Amir Adnani: Bottom line is that you’re seeing companies like ours get out there and say, “You know what? We’re making a big bet on the US and North America. We’re going to get bigger.” And you are seeing the market actually embrace that.

Frank Curzio: It’s not just the US. And you’re not just talking here because you just made, I want to say, one of the largest acquisitions of your career. I could be wrong on that, but you talk about US but this one’s in Canada. And just a little bit of the back-and-forth, and I think you guys finally agreed to deal. I’m not too sure if it’s fully closed, but could you talk about the UEX-UEC deal? Because the footprint it gives you now in Canada, in Athabasca Basin, it’s really incredible. I think it’s just changing the landscape of your company. But for you to come on here, you see CEOs talk all the time and say, “Well, this is going to happen this is what…” I mean, this acquisition is taking place. I don’t know if it’s full, if you finished it or it’s still going through the final stages.

Amir Adnani: Yep.

Frank Curzio: But I know there’s agreed upon price. But this is something you’re putting your whole company on with saying, “Okay, we need to expand right now.” Talk about this because this seems like a game-changer.

Amir Adnani: Well, we’ve been saying we need to grow and expand for the last year. In the last 12 months alone, we’ve done close to half a billion dollars in acquisitions. We acquired Uranium One, in fact, from the Russian government. That was the deal that we closed before Russia’s invasion of Ukraine. Uranium One, very famous company. A lot of people wonder how did the Russians own these humongous uranium deposits in the US. It goes back to the Clinton days, the Obama days. But it was something that was always a humongous opportunity. We acquired that from the Russian government, repatriated those assets. That was one of our acquisitions. We acquired a lot of physical uranium, over 5 million pounds of physical uranium that’s US warehoused that we’ve either contracted for or taken possession of. We were busy doing that when uranium prices were in the 30s. They’re approaching $50 a pound now.

Amir Adnani: And then most recently, to your point, we got into a bit of a bidding war, but we’re very convinced that we should acquire this company UEX that had a portfolio of resource stage, advanced stage projects in Canada’s Athabasca Basin and grow the company also into that region. Why did we want to do that? At the end of the day, when you look at the uranium market and the uranium business globally, you do have the opportunity in the United States to develop very low cost in situ recovery projects.

Amir Adnani: In situ recovery projects are solution mining. It’s what the Kazakhs do. This is targeting low grade projects, so projects where the grade of the deposit is much lower, but it’s situated in a geologic setting where you can use solution to dissolve the uranium and recover it back to surface. So, your mining cost ends up being much lower than strip mining or conventional mining, which is open-pit or underground. And so, we always felt that the advantage to be in the US was to be leading the way with low cost in situ recovery, and we knew that it was scalable, and we’ve really made significant investments there with Uranium One acquisition and with our Texas and Wyoming business.

Amir Adnani: Frank, when it comes to conventional mining, when it comes to open-pit or underground mining, Canada’s Athabasca Region has grades that are a hundred times higher than the average grade of uranium anywhere else in the world for conventional deposits. So, if you were in the oil and gas business, you want to be in the Persian Gulf. Canada’s Athabasca Region is like the Persian Gulf of uranium, very high grades and very strong deposits for conventional mining. So, our vision was that look, we want to be in geopolitically stable jurisdictions, Canada and US. We want to be in mining-friendly jurisdictions for uranium, Texas, Wyoming, and Saskatchewan. We want to be a category leader when it comes to in situ recovery, so that’s solution mining. You have to be in the US for that. And we want to be a category leader when it comes to conventional mining. And that’s the high grade deposits of Athabasca.

Amir Adnani: It’s taken 18, 19 years to complete and to get to the point we are now to realize this vision as an executed business, but it’s happening. And UEC was in a position fortunately to make these acquisitions. These are some of the biggest acquisitions in my 18, 19 years as CEO of UEC. But Frank, these are also more acquisitions that we’ve made with UEC in the entire uranium sector of any company over the last year or two. So, we’re by far the fastest growing company in the sector, but we’re also putting our money where our mouth is. We’re saying, “Yeah, here’s the vision. Here’s the problem we see with Russia, Kazakhstan. We’re building a business that’s looking to address that, and we’re going to be a large diversified North American-focused mining company.” And to answer your point, we did close the acquisition of UEX, and I’m very pleased that we did that. And so, we now have full control of this portfolio in Canada, and our business in the US is ready to go.

Amir Adnani: And look, we’re still looking for a uranium price that it’s not there yet. We’re going to need to see a uranium price especially with the inflation that we’re seeing out there. We were, in previous discussions you and I had pre-COVID, the whole industry was looking for $50 a pound uranium to restart mines. Today, post-COVID after all this inflation, after all this supply chain problems, that number’s probably closer to $60 per pound. Today at $48 per pound, we’re not mining uranium at $48, but we’re very close. And when that happens, the assets that we acquire, we can restart, we can be in production in matter of months, and that is faster than 99% of companies out there. So that combination of fast, ready-to-go production restarts in the US combined with these very high grade uranium deposits in Canada, that’s a one, two punch that I’m really excited about.

Frank Curzio: The amount of assets you add on your balance sheet, because I saw some of the negatives. People were like, “Well, it’s dilutive.” Every transaction most of the time is dilutive. And again, it will be great eventually and not too long from now. But also they were saying, “You paid up for these assets. It’s a lot higher.” When you look under the hood though, and this goes for gold or oil, so that there’s different metrics. The spot price of gold, whatever it is today, let’s say 1600. I’m might be too short. It’s around there. But when you have it in the ground and it’s not produced, there’s a number. You say if it’s $20 for gold in the ground, that’s what it goes for. And that’s how an apples-to-apples comparison, of course, based on grade or whatever.

Frank Curzio: But when you’re looking at this and the grades that you’re talking about of 20 on assets, five of which in advanced resource stage for this company UEX, you were selling Uranium Energy, it probably trades, if you look based on an EV to pound base, let’s keep it simple, here’s around a little bit over $6. You’re still purchasing UEX assets per pound at less than $1. Is that right to say? Because for the analysis and guys that like to look at things like that and say, “Okay, listen,” it might seem like you’re paying a lot. But it’s so depressed, this industry, and these assets are so depressed right now. If this thing does go to 65, 70, $80, this could be the steal of the century here. Have you looked at it that when it comes to valuation? Is that something you look at? Because when I see this, UEX trading under $1, well under 90 cents actually, for the price that you’re purchasing this per pound right now, it seems like a steal to me.

Amir Adnani: Well, listen. That’s exactly how we look at it. And for anyone that says, “Oh, it’s dilutive,” I’d like to know what they mean by that and what their analysis is, because I lay my analysis out, and we’ve talked about it in our press releases. When you’re buying projects that, as you said, are not producing, and there’s future production, but you still need to value something today, you got to pick your valuation methodology.

Amir Adnani: The way we’ve looked at it, and we’ve expressed as well as we said. We came into this equation with UEX, where we held 150 million pounds of uranium in our portfolio.” UEX had another 150 million pounds themselves. So, by acquiring UEX, we basically doubled our resource base and grew the company to 300 million pounds while also massively increasing the average grade of our resources. What did we pay? We paid about a $1.30 for a pound in the ground, the 150 million that we bought. Where were we trading? We were trading at north of $5 a pound ourselves.

Amir Adnani: And so, said differently, we acquired a company that doubled our resources. But what did we give up in dilution? We gave up 14%. If you’ve given up 14% dilution or in pro forma ownership, our company owns 86% and they own 14%, yet, they’re bringing half of the total new resources of 300 million pounds going forward. That’s a very accretive deal. That’s what we mean when we say you want to do an accretive transaction. I hate to say it was a steal. No, because it’s a win-win deal. We paid a premium to get the deal done. There was a bidding war for this asset. Another company really badly wanted it as well. They saw the value in what we recognized, so clearly that validated the deep… They got the value that we saw there. It wasn’t just us. There was real competition for these assets.

Amir Adnani: But look, at the end, we prevailed. And at the end, we got a very attractive valuation for our company. The shareholders of UEX saw a public bidding war for their company and ultimately came to us, and they’re now happy shareholders of our company, so everyone wins. But the reality is, is this still an ideal environment for uranium? No. We still need a higher uranium price. Is this the environment where uranium assets are still trading at a discount and you can find deals? Absolutely. That’s why I am as busy as I am, still making acquisition, still growing the company. Because my view is that the moment the uranium price gets to $100 a pound and it will, and mines are being built and companies like ours and others are generating free cash flow from mining and selling uranium, uranium assets are going to be recognized by all investors, generalist investors. And they’re not going to be trading at a discount to replacement value. They’re not going to be trading at a discount to net asset value. They’re going to be trading at a premium.

Amir Adnani: Right now, uranium discounts that uranium projects, companies, and assets are still trading at a discount. Even Uranium Energy, when you look at our valuation, yeah, we’re trading at $5 a pound, but we’re also a very advanced company with two fully built processing plans, where we’re trading on a price to net asset value. We’re trading at a 30% discount to net asset value. And so typically in mining, and you have a bull market, every company’s trading at one and half times or a 50% premium to its net asset value. When things are trading at 30%, 40% discount to net asset value, it shows you there’s still are opportunities to be had.

Amir Adnani: I certainly see it that way. When we acquired Uranium One from the Russians, Frank, it also involved dilution. And the dilution, there was about 10%. But even in that deal, we doubled our production capability. We doubled our total fully permitted resources. So, as long as dilution occurs, while you massively gain value on a pre-shared basis, be it resources on the ground, be it for future production capability, then really that is not dilution. That’s an accretive acquisition, and that’s how you grow the value on a pre-shared basis. That’s been our model. And frankly, that’s one of the reasons you see us, in fact, one of the better performing uranium stocks here today is, we’ve done deals where no one else has, and we’re being rewarded for it in the marketplace.

Frank Curzio: Yeah, this is great stuff. Amir, first of all, I want to thank you. And hopefully, we’re not boring investors here, and listeners, we’re going over the macro picture. It’s important to understand the macro picture of why that this supply-demand and balance was significant. Where some of the smartest people that I know, hedge fund managers that are brilliant, brilliant, see trends coming ahead of everybody else. Usually, they’re a little early. They’re investing over three years ago, really going crazy, going all in on uranium. This was before the war. And like you said, these catalysts are just accelerating this trend where countries are saying, “Okay, we need to get this back up and running. We need to get more energy that we’re not dependent on other countries for.”

Frank Curzio: So, to see what you’re doing, position yourself in here. I guess the last question, what everybody wants to see, is when? Do you see prices going higher to the point where you guys are going to be producing where, maybe it’s not 60 because we’re 65, because you don’t know where it’s going to be two months from now, but what is the price? Where do you see this going? Because it’s significant. I know it’s always tough for the future. And you ask for a price prediction, it’s hard. But things have clearly changed. It’s a war. So, do you have a prediction of what you’re seeing? Because to me, I would think it’s short-term that you think it’s going to go to 70. And when I say short-term, 12 months, 18 months because of the acquisitions that you’re making right now. But what is your projection going into say one-year and three-year? Where do you see prices going in a current environment based on a macro factors?

Amir Adnani: The last time we had the market achieved equilibrium where supply was catching up to demand and people were buying and selling uranium was 2010. It was right before Fukushima. And in 2010, the uranium price was around $72 per pound. $72 back then was the price that started to create equilibrium. $72 adjusted for inflation, and not even bothering with supply chain stuff, just adjusting it for inflation, today would be about $100 per pound. And in 2007, when we had the big bull market in uranium, again, lack of supply and it had to stimulate growth, price got to $140 per pound. And adjusted for inflation, that today would be $200 per pound.

Amir Adnani: As I mentioned at the beginning, if the uranium price is 50, 100, or 200, it’s less than 5% of the cost of a nuclear power plant that’s already operating. So, it makes zero difference to their bottom line. It makes a very insignificant difference, I should say, to their bottom line what the price of uranium is. But it’s more costly if they don’t have the uranium because Russia decides not to ship the next load, and they have to shut that nuclear power plant down. That’s way more costly than it is paying up for the uranium to make sure that you have security of supply. And security of supply is the name of the game moving forward given that clearly, ideologically, geopolitically, we don’t agree with Russia. We don’t agree with China in many things, but to some extent, this is a realization that’s not changing supply chains of many vital commodities like uranium moving forward.

Amir Adnani: So, I genuinely believe that we need a uranium price environment somewhere around $100 to $200 per pound. That’s the range between which you’re going to see interest, capital. People come back into the sector. There’s a shortage of all of that right now. Combined market capital of all uranium companies today is still very small. It’s still around $20 billion.

Frank Curzio: Wow.

Amir Adnani: That is nothing. It used to be in ’07 around 120 billion, but none of the major macro things that we have going on right now, trends that we have going on right now, where at plain ’07, I believe the trends today for this market are way more profound than they’ve ever been in the last 20 years or in the history of nuclear power. The role that nuclear power is supposed to play alongside renewables and meeting governments and companies, net zero pledges, we never had net zero pledges and previous board markets. We never had all these other dynamics like electrification. In ’07, when-

Frank Curzio: EV, yeah.

Amir Adnani: We saw other, EVs didn’t exist. In ’07, Tesla was a two-year-old company, and we had a uranium bull market where uranium went to $140 per pound. So, these incredible trends that are putting even more demand on electrification that we have today have never existed in previous uranium bull markets. There have never been these many reactors that planned or designed or being built or operable as we have today. And we’re coming into all of this in a 10 plus-year bear market in uranium, when no one did anything in terms of exploration development. That really sets the stage up to get to a uranium price that will stimulate and incentivize new builds. And that ain’t 50. It ain’t 60 or 70. It’s $100 plus.

Amir Adnani: And that’s when you’re going to see a healthy industry where again, people need to come and join the workforce, be here for long-term. We’re going to create lots of great, well-paying jobs. I’m helping a lot of companies and guys that want to get into drilling for uranium. We’re helping them get into drilling. We’ve got drillers in South Texas that we’ve helped employ this year to develop our Burke Hollow project, helping them out where we can to get rig. We’re doing the same thing up in Wyoming. The industry needs people, Frank. There’s a shortage of people. There’s a shortage of suppliers that are focused or dedicated to uranium mining. You cannot see significant supply side expansion without human capital.

Amir Adnani: And so again, we can be all theoretical about it and say, “Oh, here’s a supply. There’s x number of mines,” that feasibility or pre-feasibility. How are they all going to come online when there’s a shortage of people?

Frank Curzio: That one, mm-hmm.

Amir Adnani: Not just to go build uranium mines. It’s a shortage of people at airports. There’s a shortage of people at coffee shops. These are all issues that need to be addressed. It gets addressed, but it gets addressed at a certain uranium price that really incentivizes people to want to get involved and companies to be able to pay up. And like I said, that is the price we need to think about, and I think that price is something we’re going to see in the next few years. I don’t know which month, but that’s in the cards. And Frank, it’s in the cards because demand is at 200 million and supply’s at 130. It’s a when not, if-

Frank Curzio: It’s inevitable.

Amir Adnani: Equation. It’s inevitable.

Frank Curzio: It’s inevitable. And how could you be bullish on EVs, which the whole world is what, did we produce 6 million, I think, last year on EVs, and not be bullish on uranium? How are we going to power all this where it’s supposed to go, what, 25 to 30 million in six, seven years? Just it beats me.

Amir Adnani: We will talk about EV and lithium, and ion batteries like lithium batteries in EVs charge themselves. If you’re bullish on that stuff, how are you going to charge it? Something’s got to charge it. It doesn’t charge on its own.

Frank Curzio: Yeah, it is a fact.

Amir Adnani: You need this source of electricity. If you’re bullish EV, if you’re bullish lithium, it only makes common sense to be bullish uranium, which is this source of the electricity that needs to charge and recharge the battery over and over and over 24/7. It’s really beautiful because the demand is incredibly scalable, and it gets consumed all the time in terms of electricity. But the world has a really easy time getting its head around the EV and the battery, but not where the electricity’s going to come from.

Frank Curzio: Maybe it’s the coal mines.

Amir Adnani: It just blows my mind.

Frank Curzio: And that’s great for people investing right now. Not only that, guys, just to put this in perspective before I let Amir go, because this is a funny stat. You said 20 billion is a market cap. Roblox is bigger, has a higher market cap, than the entire uranium industry. Think about that for a minute. If you think that you’ve missed the whole-

Amir Adnani: I’m thinking about-

Frank Curzio: That’s insane. That’s insane. I didn’t know.

Amir Adnani: What’s that company? Adobe. Adobe just bought a company that I’d never heard of for 40 billion cash for something ridiculous, I think. That get-

Frank Curzio: It’s a private company for 40 billion across the stock.

Amir Adnani: Yeah, so a private company that has designed websites for 40 billion. It’s just like, that’s twice the size of all the market.

Frank Curzio: Oh, I hear you. So listen, hopefully, I’ll see you soon. We haven’t seen each other in person a while. I’m great friends, if you guys don’t know it, Amir, for a very long time. I don’t get paid for this company at all or whatever, but I have visited his plant, Hobson plant in Texas. He showed me around where I was actually holding enriched uranium, which I don’t think you were holding it. You’re like, “Hey, Frank. You hold it. Go over there and hold it, and then we’ll take a picture of you.” But it was a lot of fun, man. Then it was really, really cool. So hopefully, I see you again soon, my friend. Really looking forward to it.

Amir Adnani: Well, and just before I go, we haven’t talked about this, but I’m going to do this now on this interview so everyone can hear it, and that way, you have to make time for it. I’m extending an invitation to you to come visit our newly acquired projects in Wyoming, the Uranium One assets that we acquired from the Russians, because you’re going to also be blown away by the size and quality of what we now have in Wyoming. You’ve seen what we have in Texas. You got to come to Wyoming. You got to visit me in Wyoming, and you got to come toward the projects, meet our people.

Amir Adnani: And so, I really appreciate this interview, Frank. We’ve known each other a long time, and you’ve always been very interested to cover the uranium story. Sometimes you’ve been skeptical, but I think you’ve always been fair and balanced. And I really want you to think about the invitation to come visit our new newly acquired Uranium One assets in Wyoming. I think there’s a story to be told there, and I think we got to let the world know. We got to let the Americans know of what we have there and what we were able to repatriate from Russia on US soil.

Frank Curzio: I definitely will. I’ll bring the cameras with me so everybody could see it, subscribers and stuff like that. I’ll take that invite, man, and I’m looking forward to seeing you soon, definitely.

Amir Adnani: Thank you.

Frank Curzio: Got a pretty cool invitation from Amir, and he knows that this is what I love to do. So, if you’re new to this podcast or Curzio Research in general, I don’t just sit behind a desk or a microphone just reading research reports or telling you about them here. I’m a boots-on-the-ground guy, and I love to go into the field. I love to meet executives. More importantly, employees. I love to see the facilities for myself.

Frank Curzio: I’ve hopped on rigs in the Permian, Eagle Ford in 2011, learned everything I can about fracking early on when everybody said, “It causes earthquakes and you’re going to die,” and all this crap. And we found out a lot of that is bullshit and just environmentalists going crazy. We were able to make a lot of money in that trend because I was there, because I decided to go there. And I was surprised. I thought I was going to see dead animals everywhere. I was going to be crazy. And you’re doing that with Cactus Schroeder, who is a 40-year-vet, wild catter. He sold one of the biggest oil wells in the Permian. I think it was 2012 or ’13, I believe, at the time.

Frank Curzio: I recently went to John Hopkins to meet with several department heads, and this in Baltimore, about this new drug that has a potential to really compete with Humira and maybe even replace Humira, since it’s a pill format, not an injection. I’m very familiar with this. My daughter has Crohn’s. But Humira’s the number one selling drug in the world to treat autoimmune disease. It’s a pretty big deal. So, I want to meet with the CEO, certain department heads which are there, which you never really see that at Johns Hopkins, that just they’re going through phase 2 studies, and I want to get a closer look at this and hear their opinions as well, people who are in the field.

Frank Curzio: I’ve traveled to China, Europe, South America. You guys know I go to the Consumer Electronics Show every year. I try to do that live for you guys and post everything for you, probably 9, 10 years in a row. I lose count. I think there was one year where it was canceled from COVID. And the next year, a lot of them canceled later. It was about 1,500 companies and about half of them canceled. This was last year. This year, I think it’s going to be insane. You’re going to see… It’s usually over 3,000 companies there, and it’s the second week in January every single year. And these companies, all the biggest in the world, technology all over the world, not just in the US, this is where they showcase their new technologies. They go into release over the next few months, and it really gives you a jumpstart in some of these innovative trends, which we’ll be able to invest in so many different names and make money just by going places like this.

Frank Curzio: So, I love it because it keeps me young. And not only that, I’m always interested in learning something new, and that’s a driver here for me. It’s just, that’s why even if you’re just talking to so many people and learning. I think as you get older, and I’m 50 now, and I say this a few times, where when you’re in your twenties, you’re supposed to be arrogant and you know everything. And then you get to your thirties. And when you really get to your forties, you realize you don’t know shit. You’re like, “Oh my god,” because you really meet so many brilliant, brilliant people, and so much you can learn from them. And you just check your ego at the door and you’re like, “Wow, man.” There’s a lot of smart people just in different areas of things that you never knew before, and it helps you expand.

Frank Curzio: And having my expertise in stocks and knowing companies and companies’ structures and who’s going to benefit allows me to bring you lots and lots of new ideas. And that’s why I’ve been doing this for a long time. And some of those ideas don’t work out, but some of them do. And we’ve seen unbelievable massive gains. We’re in crypto extremely early, yet it’s ugly now, and a lot of people got in late. But if you got in early, it was a time where our portfolios, the average position of portfolios of 600%. Over 600%, the average position. I know it’s gotten annihilated since then.

Frank Curzio: But going to these meetings and meeting people face-to-face, it’s very important for you to understand. I know it’s a lot different now with COVID years and post-COVID, but this is where I get my best ideas. And a lot of times, it isn’t even the reason why I went to these places in the first place. If I’ll go someplace and I want to see a mining facility, there might be five or seven guys that I know, like Frank Holmes or something, or just Pierre Lassonde and something, just very, very big influential people that know a lot of people. And we’ll go out to dinner and have some beers and drinks and laughs and joke around. We just talk about different ideas. They ask me what I do and they’re like, “Hey, I’m looking into this or this company,” and a lot of times, that company turns out to be an idea that I’ll research. I’ll be like, “Holy shit, this is really, really big.”

Frank Curzio: And you only can get those ideas if you’re in the room, if you’re in the circle. And you have to put yourself out there. You have to go out there and build your contacts, and go out there and meet people. And people love talking about themselves. You just have to sit. Just go there, ask a couple questions, and listen. Don’t do the talking. Just listen. If they want to know about you, they’ll ask. If not, it’s okay. But your job is to extract as much information and give you an edge out there. And that’s something I pride myself on, where I’ve made some amazing friends. I’ve met people. There’s people I meet that are very arrogant that nobody likes them but are brilliant, and they just discount and say, “Why do you talk to that guy? That guy’s an asshole,” or whatever. And yeah, you’re right. But it doesn’t mean he is not brilliant in certain areas where I’ve gotten great ideas from them.

Frank Curzio: So for me, my job is just to bring new ideas and invest in new ideas. A lot of ideas I do bring, I invest in personally. For me, that’s the job. That’s what I love. It just motivates me. I’m always learning about things. I think it’s funny when I’ll meet someone at a party or something and they’re in a crazy industry, and I feel like I know more than them because I’ve studied this industry, whether it’s immunotherapy and getting into pharmaceuticals, or biotechnology and stuff. And they’re like, “How the hell you know that?” Well, it’s because we research so many companies. Even when on Kramer, we had to know every single company in every single industry when I worked for Kramer, which is a pain in the ass. But that was the job and it helped me research 2,000 companies a year. And one day, he’s like, “Hey, go out and meet these guys at some dinner.” And it was top guys in uranium, that I just go to New York Stock Exchange or to ring the opening bell with another company.

Frank Curzio: You put yourself out there and you just start meeting more and more people, and that’s how you open yourself up to new ideas. Because there’s people that are smarter than you, a lot of people across the board. They’re going to be smarter than you in another subject and something else. And it’s amazing, even. That’s how I was able to bring you the metaverse. The metaverse is NFTs over a year ago. I’ve been talking about this. How big is it now? Before 170 billion has flowed into the sector just this year alone during arguably recession where very few projects are getting funded, no IPOs are coming out, SPACs are dead, all this money flowing into this industry that we were in. We were able to purchase prime real estate in an area. And I love when people are like, “Oh, virtual real estate is worthless and it’s terrible.” Well, it depends where you buy it. We’re buying it in one of the best open metaverses that now I’m taking a big role on the board.

Frank Curzio: And just to see the amount of companies that are coming in and talking to TCGs where we bought this, you don’t do that unless you get out there. And that was simple. I met someone at a conference that I was going to. It was a marketing conference. Me and a couple friends in the industry and some other kid, they wanted to know how I structure my security token because everyone’s always looking to raise money. And I give away equity in my company and a lot of you, investors. And some kid knew about crypto and came up and said, “Hey, I know a couple of companies that’s gotten TCG,” and whatever, and that’s how I found out about TCG. And next thing you know, I’m investing $5 million in it. And that’s how it happened.

Frank Curzio: So put yourself out there, especially if you are young. Travel. Go out there. Just bust your ass. Drive where we have to go and just go out there, talk to as many people as you can and listen. Don’t worry about going to this Delivering Alpha conference. I actually went to these a couple times, but now, they’re broadcasted and they’re going to report everything on Twitter, the second day report. Don’t waste your time on something like that. You don’t need to. But go on a Consumer Electronics Show and the contacts and take in those tours where they’re going to tell you, “Hey, these 25 boots, these smaller boots, just paid a lot of money to get in late.” Meaning, they have technology that they really, really want to show. That’s interesting to me. You’re not going to hear that anywhere unless you have certain contacts.

Frank Curzio: So even with Amir, when I met him, I flew down New York City, which I lived all my life, but I was in Florida at the time. I think it was 2012, 2013. And I met, he was a vice president of Brazil who became president. And I also met one of the richest, most influential people in Brazil, Mário Garnero. You could look him up. You’ll see. He introduced ethanol to the countries. He’s one of the most influential people. He has every single president in the US on speed dial, great contact. But that’s what I love about this job, just meeting new people. And hopefully, anyway, you liked that interview. And yeah, that’s how I met Amir. And I’ve traveled with Amir in different places, and him and his brother, and he’s a really good friend. UEC is just one of several uranium players that I think are going to do really well.

Frank Curzio: I gave my favorite one with the Curzio Venture subscribers yesterday. I said, “Look, I’m not going to officially recommend it. This is the one I’m looking at. I’m already invested in it an early price five years ago.” So, if you listen to me, you were probably pissed off for four years, and now, it’s a little bit higher, but it’s a name that I love that’s under the radar. It’s really cool. But the industry has massive, massive tailwinds now. And you’re seeing with Europe, you’re seeing with… I don’t know how you could be bullish on EVs. And I said that during the interview, which so many people are. And you should be bullish on EVs. That’s where all these car companies are going. It’s going to be 6 million to 30 million. How the hell are you getting enough electricity? It’s almost impossible unless you go through uranium.

Frank Curzio: We’re seeing that now. It’s going to be needed to power electricity. You’re seeing all the countries doing about face. When guys are going back to coal, you know they’re going to go to uranium and start opening up these plants and start. A lot of them are starting to be built again even in China. But a lot of the stuff is getting turned on. The supply-demand and balance is always there, but the utility companies are like, “Eh, we’ll wait. No big deal.” Now, Russia, and you see what happens when someone controls a lot of your energy. Energy rules the world. It’s more than technology because that’s what powers technology. Energy rules the world. That’s why US is so powerful. That’s why Saudi Arabia is powerful in the Middle East. That’s why Russia is so powerful even though everybody completely shut them off and wrote them off and remove their businesses from them. And look at their currency, is surging as well as the US dollar. There’s a reason for that. Energy controls the world, and you’re seeing that.

Frank Curzio: So, when you look at uranium, it’s an industry that I like. But now that Europe especially understands how important it is to have alternative sources of energy, and you’re sitting there with 24/7 base load power, it’s the safest, cleanest fuel in the world, you better start using it and you’re going to be using it. And with demand coming, and demand is here already, but demand is surging even more, prices have no place else to go but higher. I was surprised Amir said that they’re going to go well over a 100 to 200, but I think he’s right. I think that it’s inevitable. It’s going to happen. That was an argument for three years ago, four years ago. Now, you finally have the catalyst where countries are like, “Holy shit. Man, we can’t go off our nuclear again.” We just can’t. We can’t be dependent on wind, solar, which is, you can’t be dependent on that. It’s not a 24-hour base load.

Frank Curzio: And now with energy, especially with Russia, how much now they realize how important it is. They talk the big game and sanctions and stuff, but now they realize how important it is. And that’s why you’re seeing this push to uranium, which you think is going to push prices very, very higher. We might see some of the stocks get hit a little bit with the Fed going absolutely nuts, which I talked about yesterday. But still, I’d invest a little bit now and just start scaling in because I think in the next six months to next year, maybe even before that, you’re going to see prices surge. A lot of these names are going to go incredibly, incredibly higher.

Frank Curzio: So hopefully, you enjoy that interview. For me, if you live in Florida, stay safe. I know hurricane is hitting. It’s crazy, wind watching all the time. I know you guys hear crazy stories out there, but it is a very big hurricane. It’s coming in very, very slow, which means it’s not really the wind that’s going to hurt us, it’s more that the flooding. And we’re by the water, but we have nothing to worry about. We’re pretty much inland and sitting up high, so we’re fine. But you’re going to see lots of flooding, lots of damage and stuff like that just from flooding, like what you saw from New York about five, six years ago, whenever that last hurricane was.

Frank Curzio: But yeah, good luck to everybody. Praying for you guys. And I’m probably going to lose power later today and into Friday, which is normal. That’s when it’s going to hit our side, which is Amelia Island, which is north of Jacksonville. And either way, I’ll be reporting to you guys and tweeting and stuff like that. But stay safe if you do live in Florida, and I’ll definitely see you guys next week. Take care.

Announcer: Wall Street Unplugged is produced by Curzio Research, one of the most respected financial media companies in the industry. The information presented on Wall Street Unplugged is the opinion of its host and guests. You should not base your investment decision solely on this broadcast. Remember, it’s your money and your responsibility.

Frank Curzio
Frank Curzio, founder and CEO of Curzio Research, is one of America’s most respected stock experts. His research is regularly featured on media outlets like CNBC’s Kudlow Report, The Call, CNN Radio, ABC News, and Fox Business News. His Wall Street Unplugged podcast—ranked the No. 1 “most listened-to” financial podcast on iTunes—has been downloaded over 12 million times.

P.S. Later today, members of The Dollar Stock Club will receive a complete breakdown of one of my favorite uranium plays.

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