Uranium Sealed Bids Result: A Staggering $113/lb
Bob Kirtley MSc.
Despite our bold prediction that uranium would rise from $95/lb to $110/lb we fell short, as the winning bid was $113/lb. Our role play in the board room of the fictional but life like Gigantum Power corporation did help us to come up with what we thought was a bold prediction of $110/lb, which would have been a price increase of 15%. However someone very keen indeed to ensure that they were the winners piped us to it. This price increase equates to 18.9% or 57% for the year so far.
We have had to stop and consider what this means to our target of $200/lb? Well it raises our comfort level in that we will indeed get there but it also raises the question of when? We don't see any new hurdles in our path and the fundamentals just seem to glow ever brighter on a daily basis as more nuclear power plants are announced. There is no doubt that we are ahead of schedule at this point with each uranium price increment seemingly getting larger.
We are trying not to get overly confident at this stage but we cannot see a why uranium could not hit and surpass $200/lb this year. Our very own Gigantum Power Corporation has a bare cupboard at the moment despite their valiant efforts to score a victory at these auctions. This raises the question of just how many other utilities are in the same boat? TradeTech tells us that the auction received a strong response form producers, traders, investors and utilities. Well there's a surprise! Can you feel the tension mounting in this pressure cooker of a market place? In these auctions there can only be one winner so all the other players have to be losers. Those utilities that have failed to add to their supply are now entering the 'frantic' stage, as their operation could come to a sudden halt if their fortunes do not change. And what of the entrepreneurial predators armed with cash circling around the hottest game in town and unable to get a seat at the table? How long before they lose their patients and give the order to get some uranium at all costs?
You will have noticed that when the news of the latest price rise came out the uranium stocks initially jumped and then spent the rest of day heading lower. The "Buy the rumour and sell the news" brigade did just that. However they are now sitting on the sidelines wondering when they should jump back in? It is almost certain that they will jump back in thus adding to the demand for uranium stocks and we suspect it will be sooner rather than later. This is shaping up to be a hot summer for uranium stocks as the value of their underlying asset continues to rocket so they will look and be more under valued than ever. This presents us with a fabulous buying opportunity and we intend to grab it wholeheartedly.We will conclude with a wonderful chart:
Bob Kirtley MSc.
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April 9th, 2020
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