Uranium demand is heating up, and it’s not just because of the energy transition. In this insightful interview, nuclear expert Per Jander (Director at WMC and advisor to the Sprott Physical Uranium Trust) joins Trey Reik to explain why uranium is entering a new bull cycle. From AI-powered data centers restarting shuttered nuclear plants to the role of uranium in global baseload power, this conversation breaks down why the world is rethinking nuclear—and why uranium prices could rise significantly from here.
Per also explains why nuclear plants can run for up to 100 years, why Sprott’s physical uranium buying reshaped the market, and how geopolitical uncertainty with Russia is shaking up supply chains. Learn the difference between the spot and term markets, why long-term contracts dominate uranium trading, and why investors need patience (but not passivity) to profit from this setup.
Get Wealthion’s and SCP Resource Finance’s free report on Uranium and investment opportunities in the space, here: https://wealthion.com/uranium-investment-opportunities/
Volatility got you concerned? Get a free portfolio review with SCP Resource Finance at https://bit.ly/3ZHrYoU
Hard Assets Alliance – The Best Way to Invest in Gold and Silver: https://www.hardassetsalliance.com/?aff=WTH
Per Jander 0:00
There is a supply deficit, and then there is demand around the corner. Like the uranium is in the ground. It’s just a matter of getting it out of the ground up until 2030, potentially longer, we’re just there’s just no new mines coming on.
Trey Reik 0:19
Greetings and welcome to our wealthion show. My name is Trey Reich of Bristol Gold Group, and we’re here today with per Jander, Director of nuclear fuel and Investor Services at WMC, an independent physical commodity merchant focused on the low carbon energy sector, which I think is a roundabout way of saying a uranium broker, but we’ll get into that in a minute. Now, I’ve watched a few PERS interviews, and I can safely say he knows more about the uranium industry than most human beings, so we’re excited to talk to per and thanks for the time taken to be with us today. Nice
Per Jander 1:03
luck, right? Thanks. Thanks for having me on. It’s great to be here. I’ve never, never been on your channel before, but, but obviously it’s, it’s, I think it’s a good, good telling of the times when uranium gets to be in popular channels like yours, then, then good things are happening. So it’s, so no, it’s, it’s very exciting to be on, and I look forward to having a conversation with
Trey Reik 1:22
you. Terrific. So I’m going to start with an apparent rookie question about uranium markets. I’m a gold guy of 25 years, so I’m learning, I think, as a lot of our viewers are about the details of the uranium market. But one question that really came to mind when I was preparing for this today is, what percentage of the uranium investment thesis is nuclear energy? Is it 100% uh,
Per Jander 1:53
yeah, that’s a that’s that’s a good question. I haven’t even thought about it before. But yes, uranium is not used for anything else, adding anything else than the nuclear energy so that would be, I think the answer is yes to that. I mean, obviously there is the net, the obvious use of uranium for nuclear weapons and propulsion of nuclear vessels, but that’s very, very separate from the civilian field that I work in. So there is no crossover from that perspective, but there’s no other
Trey Reik 2:20
derivative uses for uranium in industry. It is not No, Okay, interesting. So and my colleagues at SCP resource finance, to try to simplify things, have told me that the reason nuclear energy is so compelling is you can get lots and lots of energy from moving around a small amount of material, you know, other unlike coal and oil and gas, where you have to move mass amounts of material, you know, the key to nuclear energy is, is really the small amount of material that you move for the outsized amount of energy you can generate. Is that a fair nutshell of the thesis.
Per Jander 3:02
I would certainly agree with that it’s, it’s a, it’s a very good, good example to bring up. And obviously with that comes another bunch of other advantages as well. But sure that the supply, supply chain is fairly simplified for this, for the reason that you don’t need a lot of need to move a lot of volume. The the reload for a nuclear power station, for example, you can fit on a simple truck and have it in the room where I’m sitting. It would easily be there and and you can run 1224, months on that, depending on the setup of your reactor at at one gigawatt. So it’s it’s extremely dense from that perspective. A side effect of that as well, is that that the land mass, or land area needed for to host the nuclear power station is extremely small. So not only is it easy to move around, it’s also very dense, or have a very small footprint when it comes to where to where to place this power station. So there’s a bunch of different advantages with it, but that certainly is one of them. So I fully agree.
Trey Reik 4:01
I hope you’re enjoying my conversation with per but I wanted to also let viewers know that SCP resource finance and wealthion have produced an extensive white paper on uranium and exciting investment opportunities in the industry. And if you’re interested in receiving a copy, please click on the link in the description below, and we’ll get it out to you. So let’s talk about the other advantages, I guess. I guess the way I would introduce this is, since I think this is the belly of of the issue, give us your thesis, you know, a pre C on nuclear energy and the other benefits and the uranium investment story. I know you could talk for two hours, but just frame it for us. Yeah,
Per Jander 4:50
I’ll do the I’ll do the quick, the quick overview anyway, and that’s actually the reason why I joined the nuclear field about 20 years ago as well. I started doing Power trading the. Than one of these programs where you have to rotate around in different portions of a utility. And I knew nothing about nuclear energies. I figured it’d be fun to try that out for three months and and, yeah, that was 20 some five years, you almost, and I never left so and I think first of all, I was, I was impressed by the engineering in them. And it’s like, it’s really robust engineering. It’s a fascinating topic. It’s gets into physics, pretty, pretty detailed physics. So that’s, that’s pretty interesting as well, but it was the safety aspect of it. It’s, it’s just how serious Everybody takes their job and and if it, it’s, obviously, you look at these numbers, you always try to find key performance indicators when you compare different ways of producing energy. And one, even though it’s morbid, but I think it’s the best way we have of looking at, looking at how safe something is. It’s the amount of deaths per terawatt hours, or mortalities per terawatt hours. And if you look at that, regardless of that, we have the Chernobyl accidents, which is actually the only one with deaths in it, in the nuclear industry, and everybody knows about it, but in numbers, considering how much energy you have produced with nuclear energy and how few people that have died, actually, new nuclear is the safest way of producing electricity compared with everything else. So safety is one aspect, the one, while it got sort of a fair bit of attention when I when I like when I joined after the downturn, after Chernobyl, and then in the late 90s, early 2000s it started to be a bit of a rebirth of it. And that was because it’s very clean. There are simply no carbon emissions from the operations itself. You have some during the life cycle. So in the in the mining and and I would say the biggest factor is probably the when you build, when you construct the power stations themselves, because it’s so much concrete. So when you make concrete, there is emissions of carbon in that, and that is simply the biggest, the reason for it. But other than that, it is virtually nothing. So it’s the lowest emissions per megawatt hour produced as well, which is obviously a very compelling reason. And then one thing that is, I think, is becoming more and more realized, because the otherwise you see, like, well, of course we should have solar panels and windmills, because that’s great, but, but we only need to look what happened in Spain a little while ago, like a couple of a month ago now, where you need base load energy. You cannot just have intermittent sources that are weather dependent. You need energy 24/7, not only because we don’t shut down human some human activities during the night or during times when the sun doesn’t shine or the wind doesn’t blow, but you also need it for technical reasons that for the in order to make an electricity grid robust, you need not only to have baseload energy, but you also need to have a spinning mass of energy. So basically, a turbine will be a big, heavy turbine string and a generator, because that’s great stability that if something falls off, that can sort of absorb the shock to the system. So, and that’s definitely something that came like, I think most people that are involved in this know that’s the reason, or that’s something that’s a very big factor in what happened in Spain. And I think that’s going to come out when there are a lot of reports done on this as well, that you see that you need these kind of power stations, whether it’s gas or whether it is coal oil, which may not be preferred for other reasons, but nuclear is one that provides this service to the grid as well, if you will. Great.
Trey Reik 8:27
Thanks for that, precis. And we just have to touch on this before we move on. A lot of people are obviously concerned about the big risks of a nuclear power plant going wrong. But I understand that safety precautions and the way these things are backed up and built are entirely different than they were, say, 30 years ago. So is, you know, can you talk a little bit about that safety protocol?
Per Jander 8:57
I mean, it’s, it’s an ever evolving industry, and there’s obviously Lessons Learned applied every day, every every hour of the day, and there’s international organizations that I haven’t really seen in a lot of other industries, where operators of nuclear power stations cooperate, and it’s over and above what, what the regulators themselves say that they have to Do. So So there’s another, there’s a World Association of nuclear operators called Wano, and it’s different offices around the world where basically anyone who operates a nuclear power station provides operational data, safety data, lessons learned. They find root cause analysis, and they share all this with each other. So you can apply it to a power station, not only on the other side of the world, but actually competitor in the market you’re in, you still have open books. Because I think if there is one thing that maybe not thank for, but a useful outcome of the anti nuclear in this or anti nuclear movement that’s been very strong, obviously, for a long time, is that it creates so much. Scrutiny and so much, so much close like that is like it’s so much supervision, and almost everything is always scrutinized, so much that you have to be extremely careful in everything you do. I mean, I would say the physics of it say that make the make people be left to begin with. But then you have an additional layer where media and others are really, really scrutinizing it, and that has actually helped in the sense that we may not be as close guarded with some data as other industries may be, because we know we’re all in the same boat. One accident in one place of the world is going to impact everywhere, like we had a big earthquake in a tsunami, where the tsunami itself killed about 20,000 people. Not a single person died from what happened at Fukushima, the power station there 20,000 over 20,000 people died from the tsunami itself. Not a single fatality from the but everybody thinks when they hear Fukushima, no one thinks of the tsunami. Everybody thinks of the power station. Wow. And the ripples around the world, is that they shut down the German program where it’s like, you’re not going to find a tsunami in Germany, not like it’s simply impossible, especially southern Germany. So it’s so it’s obviously a knee jerk reaction. And different countries, they have, I wouldn’t say, maturity levels, but it’s just like some countries seems to be a lot more sensitive to these things and others, and a knee jerk reaction in Germany was basically to shut down everything. So which is very unfortunate, and I think they’ve obviously tried to replace it with with renewables, but it’s they’re also clearly having some issues. And one of the reasons their power system is still working is because they got a neighbor who has a lot of nuclear power stations that provide a lot of reliable base load to them. So it’s, yeah, it’s complicated situation in Europe, but, but back to your point on the safety, safety on the on the safety aspects. So yes, there is always evolving safety protocols. And lots of training. I’ve been, even though I’m not a reactor operator, I’ve attended some of these trainings too. And it’s they take their jobs very, very seriously. And if I wasn’t convinced when I started studying this or going to nuclear power stations and worked there, I certainly was very, very shortly after.
Trey Reik 12:13
It’s interesting, it’s as a gold guy, it’s very similar, I think, to the gold industry, because gold has a terrible reputation for being environmentally destructive, when in fact, the whole ESG movement that’s occurring in the past 10 years gold was onto the ESG thing 2030, years ago because of the importance of having perfect environmental records. So I just think it’s kind of funny people ask about ESG with gold companies. And I’m like, you know, they Newmont and barrack, they solve this stuff, like 30 years ago, if you know what I mean,
Per Jander 12:48
yeah, no. And it’s actually, it’s been very similar in nuclear energy as well. When ESG started to come out with, with the governance aspect and sustainability and all the environmental aspect, it’s basically like, hey, we were made for this stuff. Like it was, like, bring on as much scrutiny as you want, and we can basically hit it out of the park on every single question. Now what we want you to do is go around and do this to every single other way of producing electricity, and then tell me what your finding is exactly. We’ll see if we get there or not. But I have never had any issues whatsoever. Just more like, okay, the more questions, the better. Just bring it on. So
Trey Reik 13:25
I think, if I’m correct, 20% of US energy is now nuclear, 30% ish in Japan and 50% ish in France. I know you don’t have a crystal bar ball, but in terms of broad expectations. You know, when you’re at WMC directors meetings, where do you think those percentages can go?
Per Jander 13:51
I would say the US is a 20. And then Trump’s only said less than a week ago that he wants to quadruple it by man, obviously,
Trey Reik 14:00
sorry, he said in 25 years, right? 25
Per Jander 14:02
years quadruplet. So it’s like before they had triple it, and now quadruple it. It’s a very, very ambitious target, but even so, I like it will certainly go up. I think so you have bipartisan support. It’s it really, it’s just a matter of getting things going. And that’s obviously the first step is always the hardest, hardest. Now you’re looking at what’s happening in China. They are building 810, reactors a year. It takes no more than five years. Takes even less. Everything is coming out on budget. It’s basically just like, it’s a continuous process to just keep getting making all the big components. And they know exactly how to do it. They’ve done the basically achieved. You know, you’re at the end of a kind. You’re not that’s the first of a kind, second kind, third of a kind. They gotten all the kinks out of the system, and now it’s basically just mass producing it. So that’s where you want to get to France was there in the 70s. They’re actually at 70, 80% so more than more than 50 when it comes to to nuclear energy, the Jeff. These are just over 20. I think they were at just over 30 before, and I think they will get better back there. Their target is 30 by 2030, and I think they will get there so. So it’s a lot of development in more or less every single country. India has a very aggressive program as well, and they’re basically starting at zero or being very close to zero. So the one outlier is Germany, and yeah, we’ll see what happens there. There’s obviously been a change in government, but the Social Democrats, who were the the ones in power during the when they shut down everything, they are still in the government, even though they’re not the biggest party anymore. And I think as long as they’re there, it’s going to be very difficult to see a change in Germany. But, yeah, never say never, but I’m not holding my breath. But there’s a lot of momentum going on pretty much everywhere else in the world. So
Trey Reik 15:47
to frame this for wealthion Viewers, I have sort of one final general concept before we get into some specifics. But I think it’s fair to say in everything that you’ve just talked about, nuclear development is a long term process, right? Things take a lot of time, and I think it’s important therefore, to establish, I think you would agree uranium is a long term investment thesis. It’s not a trade. Do you agree with that? 100%
Per Jander 16:18
I mean, you need to have a little bit of patience, and you probably need to have a little bit of thick skin, but that skin, but that’s in any commodity, I guess, especially uranium, I would say, if you’re an investor, but, but, but is it? Everything moves at a glacial pace in nuclear, for all the reasons we talked about with when it comes to safety and long lead times, and obviously they’re working on getting the permitting down, but just with everything working the way it should. Construction takes five years. So it takes quite some time from shoveling the ground to connecting to the grid. It’s a five year process. Now, when these were built, or initially in the 60s, 70s, 80s, the design life was 40 years. So I mean, again, you can imagine, I mean, you do, you do finance models here. So if, like, if you do an NPV calculation on something that happens 15 years out, basically, it doesn’t really matter what happened 15 onwards. Here you have something that works for 40 years and and it’s like, it’s very hard to make the math work from that perspective, but you you almost need something different, a different model, a different way of looking at it. And obviously, that’s where governments come in. And governments come in and whatever else. But the interesting fact is to that, yeah, the plan was originally 40 years. And after 40 years, or when you getting close to 40 years, say 30 years, they’re looking at it’s like, Oh, crap, this thing is like new. So because they’re the maintenance programs are rigorous and and it’s like, it like, I don’t know if you’ve been to one of these things, often it’s not, I would encourage you, encourage you, or anyone who’s listening now, to go and visit a nuclear power station if you can. It’s, it’s ridiculously clean, and everything looks like it’s sparkling, brand new, like the design, design is from the 70s, but it all still looks like it’s new. It’s almost, it’s almost weird when you’re in there. So they look at it as, like, oh, this thing is new. We can just run for another 20 years. This is fine. Okay. Europe. Okay, you replace the turbine. You know they were like, where there’s some stress on it, those ones you can do, and they get more efficient. So you actually can boost the the energy output for by replacing the turbines and steam generators and what else they have. So now you’re getting up to 60 years. And in the US, Most reactors are now filing for 80 years lifetime. And there’s nothing to say that you can’t even go for 100 it used to be, or I would say it still is. The only thing you can’t really replace is the reactor. Press official. So that’s where the nuclear fuel is. That’s where all the heat transfer happens from the fuel bundles. That’s where the fission itself happened. But so used to be that at some point, because of the radiation and the heat, transients and everything else happened in there. It’s a material gets brittle, and it looks like the French have come up with some some methods where you can actually sort of heat up the metal to diffuse it together again. They look doing some really interesting work on this that it’s becoming, it’s gonna become more and more publicly available, I think, anyway. And when you have that in place, then I would, I would probably think that 100 years may not be impossible. So these things, once you build them, they’re around. They’re around for not just one generation. They’re around for two or three generations even. So it’s so it is an extremely long term view that you need to have on this. But it also, once the demand is in place, it’s not going anywhere. And I’m sure we’re going to be touching on this later on, too. But again, there is no replacement for your for uranium when it comes to the fuel, right? And because the fuel cost is such a small portion of your operating cost, you’re not that sensitive to price increases in uranium either. Like, once it’s built, the financing cost is the really major portion of everything after that your fuel like it’s 5% of your operating costs. So if your any price is double that, the bottom line changed. Your economics doesn’t really change that much. So as an investor, is like, you can be, you can be pretty confident in events that demand is not going anywhere. Once demand is built, it stays around. And
Trey Reik 19:58
you’ve talked about. AI being the cherry on top of the cupcake or the like. So let’s just a couple sentences on AI. Does it even affect, you know, the way you look at markets in the next two to three years? Or is it just something that’s on the Blackboard as being out there, or is there already an impact on demand for nuclear alternatives? I
Per Jander 20:25
would say, I’m certainly keeping an eye on it, and it is an immediate impact, if you have the where Microsoft, but it’s going to work with constellation to restart Three Mile Island, or the Chris crane Energy Center, that’s that’s creates immediate demand, because they’re gonna this day this power station was shut down, the core was empty, they’re gonna restart it again. And when the core is empty, it means that, but you had, you need to, so what’s called an initial core. And an initial core, otherwise you you’re running out. You run your power plant and you shut it down every year or every two year, depending on your cycle. And then you replace about a third of the cores. You take out 1/3 put in a core, third new, another third fresh, with fresh bundles, and you reshuffle them a little bit because you have different patterns in there. And then you run for another 12 or 24 months. It can be 18 in some cases, but you run for another cycle, but when you have an empty reactor, and in this case, then you need an initial core, and that’s actually three reloads in one so you have three years worth of demand, or five years worth of demand, three reloads, if you will, upfront, and that is going to be needed if they’re going to restart next year. I mean, you need this stuff now. So it is already having an immediate impact. Palisades is going to be restarting as well. Obviously, big tech companies are certainly behind some of the stuff that’s happening in Diablo Canyon in California as well. And this is going to be life extension is going to stay on. So it certainly has the impact already now. Now, of course, these things can scale very, very quickly. I’m used to working with utilities and nations and governments and like, that’s where the glacial mindset comes from. But when you have these, this hyperscalers and tech companies, you know, they work in a completely different universe. They certainly have the money. They they gonna get the chips from somewhere, and then they’re gonna build these data centers and AI facilities, and then they need an electricity and they needed base load. They needed 24/7 they needed to always work. And ideally they want it to be close by, and they don’t want to have to buy huge pieces of land so, and they want it to be clean, so it all fits together really, really well. But in our, yeah, in our pitch, if you will. Just like why we believe nuclear energy is has a very bright future. We’re not saying that AI is not crucial for this thesis to work. It has a very good outlook on its own, electrification, decarbonization, all these things. But this AI explosion, or however you want to call it revolution, if you will, that can clearly overtake and make this scale on a completely different level.
Trey Reik 23:07
I hate to again, seem like a rookie, but it all of these different things coming together. It certainly seems like it would be difficult for the uranium price to take a deep dive in the next couple of years, but we’ll, we’ll see what happens. So in terms of one of your primary commitments, which has been to be technical advisor to the Sprott physical uranium trust, I thought we could ask you a few questions about the Sprott trust, just to flesh out, I think, for shareholders and viewers, exactly what’s going on as that thing has grown. So I think it was launched in July of 21 and when I look back, I think the original market cap was about 600 billion. And I looked yesterday and it was about 4 billion US. You mentioned to me earlier that it was even higher than that when uranium was at 106 but let’s go with the 600 million to 4 billion increase. Does that mean that you as technical advisor went out there and bought three and a half billion dollars worth of uranium? Is it that simple?
Per Jander 24:18
Not quite. We started with 18 million pounds. So we bought about 48 million pounds as the technical advisor, which is a lot. So it’s about two and a half billion worth, slightly less, okay, but it’s, it’s a lot. It’s, it’s, it certainly has made its mark on on the industry itself. Now, before that, the industry, like the nuclear fuel industry itself, kind of shrugged. I investors. They come and go. They’re not, you know, they’re they create a little noise, but they can be useful sometime, but, but when, when Sprott came in and obviously revolutionized that vehicle quite a bit, and then it became immensely successful and and now no one, no one really laughs at it. Anymore. Or no one shrugs it off. They take it very seriously. But it’s also even utility. Some of them might have been a little negative to begin with, or some potentially still are, but they also realized that when came in and the price was about $18 a pound or $20 a pound, it wasn’t sustainable. You had mines being shut down, left and right. Some of the best mines in the world were in care and maintenance. So that’s not a sign of a healthy market. And now we’ve had such a big sort of revitalization on the industry, it takes time to restart these things. I don’t think Cameco or casado prom would have ramped up their facilities as quickly had not this price increase happened that was driven by the investment community. So from that perspective, with hindsight, it was a necessary movement, that something needed to happen. And in in a way, it actually made the transition, or the ramp up of the uranium production much, much smoother than otherwise would have been so,
Trey Reik 25:56
and just sort of dumbing this down for the average investor, when you purchase uranium for the Sprott trust, I guess I have sort of three questions, what form is it in? Where did you buy it? And where the heck do you keep it?
Per Jander 26:14
Those are, those are all good questions. The form is in yellow cake, or you 308, so that’s the that’s the most basic, most commoditized form
Trey Reik 26:23
radioactivity, right? It’s
Per Jander 26:26
very, I mean, it’s, there is some, because just like you have radiation in if you live in a granite like place where granite bedrock, you have to measure radon in your basement. So they say Radon is a daughter product of your of uranium that naturally decays. So you obviously got to have bigger radon amounts. Even if you’re up, if you’re down in a uranium mine, you just have a lot of ventilation and and it’s the same with with this yellow cake as well. Like, you don’t really want to, you can take it in your hand too. We just tend not to, because you don’t want to create, like, it’s habit level, cut. You get it in your system. It’s not it’s simply not good. So from that perspective, you to stay away from it. But you clearly, you we can walk around like this. We don’t need any like protective equipment or any of that stuff. You walk around it. It’s stored outside, three drums high. It’s in a regular drum, 200 liter drum, so there’s no magic around it.
Trey Reik 27:22
So where we buy the prop material? Sorry, where did you source the Sprott material? Yeah,
Per Jander 27:28
that’s where we saw. I would say we have about maybe 3035, counterparties, but I would say that’s probably 10 that are the most common ones, and they’re producers, correct? Not only it’s quite a lot of intermediaries too, that end up with material they might have off take agreements from producers. So not all miners are actively in the market themselves. We do buy in the spot market. So whereas producers normally sit down and negotiate bilateral, long term agreements with utilities, so that’s what’s called a term market in uranium, then there is a spot market that, yeah, it’s, it’s been around between 50 and 100 million pounds per year. So it’s, it’s fairly sizable, but, but it’s, it’s mostly intermediaries trading between each other, and then you have some say, 15% of it coming in from suppliers, and then utilities buying about 15% so there’s some sort of say, see, that is a little pool. And then you have some fresh water coming in, some water going out, but, but, but a lot of it stays there, and it sort of creates, creates a market that it’s, I think, is pretty healthy. It’s like, you can, you can move there. There are three trading hubs. To your last question, where is the material stored? This is you have very
Trey Reik 28:36
interested in this? Yeah, no, it’s a 333,
Per Jander 28:38
hubs that are around the world. There’s one in France, there is one in the US, in on the border between Illinois and Kentucky, called Metropolis, right? And then there’s one Cameco that is Port Hope outside Toronto, or they have another one in Ontario called Blind rivers to split facilities. But it’s basically the next step in the fuel chain, the conversion facility. When you convert the uranium oxide to uranium hexafluoride, so you need to create it to gas, and then this gas is sent to an enrichment facility, and that’s when you enrich the uranium you need to increase a certain isotope, the one that you can split, the one that’s fissile. So that’s sort of the last step, or last step in dealing with uranium. And then you put it in a fuel bundle, and then it goes into reactor. But it gets more and more specialized the further down that chain you go. So all the uranium that spot trades is in this first step. That’s the one that’s most commoditized. There’s most producers, most diversification, most liquid market, so that’s where we focus only and and, yeah, they so we have it at split between these three facilities around the world.
Trey Reik 29:50
Terrific. And Sprott, to my knowledge, never sells uranium, correct for Trump, haven’t
Per Jander 29:56
sold a single pound. So some talk of that the last few weeks. But. And they did a race, like a separate race of funds with some some long term investors. So we raised about $25 million so now we certainly have funds to run for at least another year before this discussion comes up again. But unless we buy raise anything in between, through the rate, the regular process of at the market, the at the market race through investors, of course, but
Trey Reik 30:24
to a certain degree, what Sprott buys is basically permanently off the market, right? Yes, that is correct. So that’s interesting. And so those storage agreements are in perpetuity. Yes,
Per Jander 30:38
yeah. I mean, the agreements might they’re just like renewed on a periodic basis. But it’s also, if you’re, if you’re the converter, you actually like it, because it’s feed stock for you, so it’s all co mingled. So you basically just get an account statement. Okay, so we not have drums with, sort of doesn’t have drum, yeah, do not touch. No. It doesn’t work like that. So you can say your drums don’t stay the same. So which it, obviously, it makes it very or puts us in a good situation when we have the discussion with but with the storage facilities themselves, because they have their feedstock, and especially now the last few years, when some of the fuel, some of the supply chains have gotten a little shaky, it’s not a bad thing to have have a lot of material stored on your site? Yeah,
Trey Reik 31:22
that was the breakthrough. I wondered, if you’re it’s not like gold, where you have segregated bars.
Per Jander 31:27
Nope, exactly. So it’s all, it’s all foaming gold. So it’s actually, we have a very, very nice relationships with with all storage
Trey Reik 31:34
providers, perfect. So you touched on a little bit of the next question I was going to ask you, which is this difference between the spot price and the term price? And I think you explained a lot of who and what is happening on the spot market side, but on the term side, the question that I had, is it like a London pool thing? I hear, I’ve read, that this term price gets set once per month. So my question is, who sets it?
Per Jander 32:03
Yep, there are two price reporters, so UX consulting and Trade Tech, they have been doing this for for a few decades now, where they basically they, they collect information from entities in the market. It’s all reported on a voluntary basis. So they have to call around to the utilities, call around to the producers, to say that we did it, we did a contract on these terms. But they can’t say that it’s Counterparty. So it’s up to them to sort of puzzle things together and verify things. And so it’s, it’s, it’s, call it opaque, if you will. But it’s, it’s price reporters that produce. You have two price points, one for each of them. And they come, they publish it every month. So they but they also, they, they have to build it on having data points and and if they don’t have any data points, well, then it becomes a little difficult. And not every they’re like the perfect term contract is basically you need to have a few 100,000 pounds per delivery. It needs to be for four or five years. The first delivery needs to be at least two or three years out in time. So and not everything fits into this. And then in order. Then, normally when you do a term contract, then you could have a split price mechanism there. So part of it is base, escalated or fixed, if you will. It’s just you agree on a price from today, and then it escalates with GPD, IPD, every quarter. So then if you agree on $80 today, and then you take delivery two years from now, then you escalate it and say it’s $90 so whatever it might be that’s just escalates.
Trey Reik 33:38
What’s the other term of a term contract, right? And
Per Jander 33:43
then on the other other aspects, another portion of the of the price can be set regarding to the spot price at the time of delivery. So then it’s obviously whatever the market, if you had the fictional contract that we’re talking about with delivery two years from now, part of it will be at this 80 escalated, so say 90 and the other one needs to be whatever the spot price is when this delivery happens two years from now. And that’s normally subject to a floor and the ceiling that can or may or may not be escalating at the same time. But in order for it to qualify as term price points, it has to be at least 15% of the weight between these so if it’s less than 50% it doesn’t count. And it’s not every month that you have a like and again, how many of these contracts fit perfectly into this? Sometimes you do a blend and extend you have a client you’ve had for decades. There’s not that many options. If you’re a utility, you’re going to deal with chemical you’re going to deal with Cassatt on prom, you have to deal with some of these things, some of these entities. And then instead of going to a market and blasting to everybody that you need more uranium, you might just call someone up. It’s like, hey, let’s, let’s talk about this contract we have. Can we tack on another 10, another 20 years? And you just. Do it off market, if you will. So then people don’t really know about it until afterwards, if they choose to report. So
Trey Reik 35:05
if you look at how much uranium trades in a year, what percent trades in the term market versus the spot market?
Per Jander 35:14
Yeah, that’s a that’s a good one. I would say percentage wise, yeah. Say 10, 15% spot maybe, and the rest term. So
Trey Reik 35:23
it’s overwhelmingly a term market, even though everybody focuses on the spot price in the media. Yes,
Per Jander 35:31
well, but the thing is, here then, like, yeah, chemical will be the first ones to say that the term market is where all the where it’s important. And to a certain point, I agree with that, because that is the major volume, but it’s also especially now, and it’s a seller’s market, and the seller will say that I want as little as possible as fixed, because we are early on in the contracting cycle, even though 80 is still a fairly high price, historically speaking. But they always think this thing is going higher, because they see that not a lot of new mines are coming on. There’s a lot of demand around the corner. But there is, like, it’s not easy to build a mine next gen and Denizen. They are six year licensing processes, and it’s still going to construct these things. So it’s looking pretty constructive. So then, if you’re the supplier, you don’t want to cap your upside, so you’re going to push things over. I want as much market related, so deliver that spot price at the time of delivery as possible. So some from, from that perspective, it’s, yeah, that’s it mad the spot price matters regardless of what they say. So it’s, there’s like, you have at least half of your material, I would say even more is going to be dependent on whatever the spot price is at the time of delivery. So, so it’s it does matter. It may not matter as much today for them, but three, four years from now, it certainly will matter. And
Trey Reik 36:50
today’s spot price, I think, is about 71 and the term price you’ve said is about 80, although, be honest with you, I can’t, I can’t find it on Bloomberg. So I don’t know what buttons to push to track the term price. But I think that you would agree that that resolution is likely to resolve in the spot prices. Favor, favor.
Per Jander 37:11
Yes, yeah, like the term price is not like you have to, you have to pay for both services. So that’s why, that’s why it’s sort of not published on Bloomberg or widely published. You simply just have to subscribe to it. But, but for sure, yeah, it’s like the term prices. That’s why, when we saw that, obviously his spot price went up 207 and then it came down. It was not very long ago. Was in the low 60s, but the term price held up so it
Trey Reik 37:38
was it needed for that whole time frame. It was 80
Per Jander 37:41
for the whole time. Yeah, it was 80 for the whole time. So that’s what if it started come down, of course, then you see, like, Okay, so now, because if the even though the floor and the ceiling of this term contract, Cameco is, thankfully, the report like, at least mentions it during the investor course, otherwise, no one says anything about it. So you only need the base price, this term price, that’s what’s reported, and that’s what you may or may not be able to find. Say they did all this right now, but, but that is one that is published anyway. But the floor and the ceiling no one says anything about, so you don’t know. But, of course, it’s going to be a trade off between these things. I mean, I’ll be glad you give. I will gladly give you a base price of $50 if you agree to $100 floor and no ceiling on the market related portion. So it’s there is obviously give and take on that, and there is no way of of knowing what the floors and ceilings are other than listening to Cameco so. But of course, now, when the when the spot price started drifting down, and Cameco said in September that we have $70 floors. We have $130 ceilings. And if that would have lasted all throughout now, in the beginning of this year, utilities are saying, well, the spot price is it’s low 60s. You can’t take tell me that my floor is going to be at 70. That simply doesn’t work right. And I don’t necessarily blame the utilities. But then Cameco just said, like, all right, fine. We’re not going to contract. We’re just going to sit back a little bit. Switch a little bit, just like utilities didn’t want to contract last year when they thought it was too high. Now it’s gone the other way. So now the suppliers are saying, like, well, actually, we don’t want to contract right now, so something will have to get So
Trey Reik 39:13
this explains why there hasn’t been more activity over the past 18 months. One
Per Jander 39:19
of the explanation, I think the bigger explanation is that you’ve had a White House that hasn’t been very clear in what the intentions are. All both aspects, like even previous like when I’m not going to point to only the current government, like the president before was it wasn’t clear that are there going to be bans on Russia? They’re not going to be banned. It’s going to be a waiver process. You can get material from Russia. You can’t. It was very flip floppy. And then when they finally started to get some clarity on that, well, then Mr. Trump came into the office. And then, I mean, it’s not a nuclear issue now anymore. It’s, it’s tariffs for for the entire world. So that overshadows everything.
Trey Reik 39:56
You brought up the Russian issue, and I must have been. I’ve read a little bit about it, but I don’t really get it. So what did Russia threaten to do six months ago? Did they do it? How do they have the leverage to do what they threatened? And did the market react as you expected?
Per Jander 40:14
Yeah, so the Russia delivery, there’s good there’s a lot to unpack in this, but there is no, first of all, there is no such thing as Russian uranium. There is but not very much. Russia has some uranium mines, but they have a very big domestic program, and they are not even self sufficient. So they are dependent on uranium coming from other jurisdictions into Russia, even to supply their own material, even for their own reactors. So but what do they are big is the two following steps in the fuel cycle. So the conversion, they have about 30% of global capacity, and then enrichment. So we’re in enrich your end, they have about 40% so very
Trey Reik 40:53
why are they so big? In those two they just
Per Jander 40:56
built a lot, whereas the West figured like, yeah, we then it was enough for for a long time, especially when the in Europe and the US, it was stagnating at best, and in a lot of cases, nuclear power stations are shut down. So the demand simply wasn’t there. Russia kept building and delivering reactors to other countries outside of Russia, so and they they normally provide the fuel for life of plant. So of course, you have to pay for it, but they designed the fuel bundles and shipped them to you. They’ve been every single client of the Russians have been saying like they have been nothing but perfect. Really good quality fuel. Very good quality calculations. Never missed a shipment. So obviously it has nothing to do with the company itself and the individuals themselves that work with this, but it’s on, obviously on a geopolitical higher level. But so the US and we’re focusing on us now, but it’s somewhat similar in Europe. Anyway, US utilities have bought about 25% of their enrichment from Russia, so some conversion as well, but mainly enrichment so. And the way it works is that when you buy enrichment from from a country, you give them the feed for that enrichment service. So basically, you give them this uranium gas, the UF six. So you buy that somewhere, you ship it either to the Russians, or you give the UF six to the Russian somewhere, and they ship over enriched uranium from Russia into the US, and that enriched uranium is what you put in your fuel bottles. So so then what happened was, at the invasion of Ukraine, the US government said to utilities that you cannot buy Russian nuclear fuel anymore. So we’re going to put a stop on this on January 120, 28 up until then, we will give you, there is a waiver process, and you can apply for a waiver so you can take delivery. Up until then, we’ll make it easy for you to get or you see, this was not sort of outspoken, but it was clear by the actions of the DOE, we’ll make it easy for you in if you need immediate delivery, so like last year and this year, but as we get closer to 2028 it’s very likely going to be harder with some applications were denied. So that came out and happened second half of last year, toward the end of last year, and when it was clear that okay, they needed us. Utilities needed waivers, but there is a waiver process. Then Russia retired. Retaliated and say, Okay, we’re doing the same thing. They’re not saying, we’re we’re not delivering to you. But just like the US, as a waiver process, Russia put the ban on exporting uranium to the US, and they can give a waiver to the exporter. So the exporter has to so basically, just like the US did, you basically created a function within the DOE where they can say there was up to them to decide whether the utility could get the material or not. The Russia retaliate. Exactly the same thing. We have a framework ban, but we’re creating a waiver process so we the government, decide if you can ship it or not, okay, and and so far, nothing has been blocked. However, it’s, uh, it creates a lot of uncertainty. Okay? So if you’re the fuel buyer, not only has you have you to get your waiver from the US government, where you can probably have a fairly good line of sight to what they’re doing, because it’s clear that they have a presence in DC, so they know what’s going on there, but you have no line of sight to what’s going on in Russia. So that just creates a lot of uncertainty. And clearly it’s not a comfortable position to be in as a fuel buyer. So so that has made it even more difficult. And adding on top of that, it’s very difficult to get insurance if you’re going to ship anything even pay with all the sanctions on the banking system to Russia. It also makes it very difficult. So it’s been a very fragile system to begin with. So it’s getting more and more uncomfortable, to say the least, in a way, in importing material from Russia.
Trey Reik 44:53
But at least to date, it hasn’t caused the disruption that was feared. Is that a fair or some.
Per Jander 44:59
Assumption, that is a fair assumption. There were some delays due to some hiccups, but everything has been delivered. Now, interesting
Trey Reik 45:05
and not to beat this into the ground, but was there a change between the Biden and the Trump administration on this issue, or is it sort of the same position?
Per Jander 45:17
To my knowledge, there has to my knowledge, there hasn’t been a change. Even now we’re hearing that there is a new bill that supposedly has 80 co signers in the Senate, meaningful majority. But this is more directed to Russia not cooperating in the peace talks, and it would be some extremely significant tariffs on on material, uh, not just uranium. This would be, uh, across the across the board, but uranium would be included. Yeah, uranium will probably be included in it, but it’s also specifically mentions the waiver process to get Russian material into will be stopped immediately. So it’s basically no more whatsoever, okay? So that could be jolt. That can certainly be a jolt. So that’s gonna, obviously, with 80 co signers, it’s gonna fly through the Senate. Might be some changes to it, who knows, but then we’ll see what happens in the house. And then, obviously, Trump has to agree to it as well. But, but I think that really has, has utilities, a little nervous, because, you know, there’s been some time now, this comes up, it goes away. It comes up, it goes away. But it’s, it’s a lot of horrible things happening in Ukraine, and people’s patients are running out, and even Trump is changing his tone with Putin is certainly not as friendly anymore. So I think people realize that that you can’t count on these deliveries to come much longer. So if they were uncertain before. They’re a lot more uncertain now, and that clearly can it could bring some US utilities to the market to procure some fuel. Got it so when
Trey Reik 46:51
I look at the long term uranium price chart, it’s generally pretty stable, and then you get these fairly volatile periods every 1015, years. So not to go into all the details, but when you look back from 2005 to 2007 uranium went from 20 to 136 so in one sentence, like, what happened? What? Why?
Per Jander 47:21
There was supply, supply shocks. Okay,
Trey Reik 47:24
that’s the one word, uh huh. And what is, what does that mean? Supply shock? What? There was
Per Jander 47:29
a flooding of mine in Canada, the word cloud just mine flooded. Cigar Lake flooded. And they also there was flooding as well. So cigar Lake flooded, but you also had the Chinese ramping up their nuclear program, and they were buying everything they could find. So they they, they started from scratch and bought a ton, and there was no CAS prom, casano Prom, almost at 5 million pounds a year. Got it, and
Trey Reik 47:52
I promise to keep it short, from oh seven to 2009 we went from 136 to 40. So was that just normalization? Well,
Per Jander 48:02
there was also financial crisis where a lot of new build programs got scrapped. So it was just, it was just to kind of a lot of uncertainty on the new build. People had a lot of hopes on newer reactors being announced, left and right and and it never materialized, because the financial crisis hit. So everything was kind of this reset, all
Trey Reik 48:20
right. And then we went from an $18 low in November of 16 by the summer of 21 we were 106 right? Yeah, 18
Per Jander 48:33
February, February 23 I believe. Okay, and
Trey Reik 48:37
so, What? What? What did the 106 ramp seems pretty steep to me. What? What are the two sentences? There
Per Jander 48:47
two sentences? I would say, Junior miners buying or but the, probably the biggest one was, was investors buying? Okay? There was a lot of investor driven demand there. Okay?
Trey Reik 49:00
And now I
Per Jander 49:01
would also say, sorry this, I should correct that too, because actually the first movement in that was that kasumbrum and Cameco, so big uranium miners ramp or shut their production. So Cameco shut down both cigar Lake and MacArthur River and bought in the spot market to feed into the contract. And the cast actor had been ramping up very rapidly, curtailed that too. So then you have two of the world’s biggest producers are no longer putting material on into the market. They’re actually buying themselves. So they they started doing that already in 2018 so then the financial actors, they actually didn’t come in until a few years after that.
Trey Reik 49:40
So then we back off from 106, to 60 a couple months ago, and now we’re at 71 so this is again, another, I know you don’t have a crystal ball question, but does this feel like the right price to you?
Per Jander 49:55
No, I think we need to be higher. Okay, that’s, that’s the, that’s the short answer.
Trey Reik 49:58
Can you i. Let’s talk about that. Why do we need to be higher
Per Jander 50:02
need? I just think there is, there is a supply deficit, and then there is demand around the corner, like the uranium is in the ground. It’s just a matter of getting it out of the ground, and at what price can you get it out of the ground, and how fast can you get it out of the ground? And I think up until 2030, potentially longer. We’re just, there’s just no new mines coming on. So where is that material going to come from? The big miners are sold out, or they can’t ramp can’t ramp up anymore. So from that there is, it’s, it’s simply a supply shortage. I don’t know if I want to call it a crunch or not, but we, and again, I don’t have a crystal ball, but I feel fairly confident that we’re not going to stay at these levels. Even you see some of the big bank names, they even produce like they they put up numbers when they think it’s going to be in the 100 and 20s or 100 and 30s a couple of years from now, maybe one of them might even have it next year. So not the only one saying that it’s there is clearly room for for move upward movement. And I see almost no reason why it should come, should be coming down and I and that was part of the reason when, when you say that the term price stayed at 80, and then spot price dipped down to 62 well then it’s very easy to do a carry trade. That’s what happened in 2016 when WMC was formed, and years after, and a lot of other trading entities did that too, you just buy a bunch of stuff in the spot market. You find someone to finance it, if you can’t put it on the balance sheet yourself, and then you sell it forward to utility and at especially when you had very low financing costs or interest rates. Now we’re at a higher interest rate environment. But if you buy at 6263 and sell at 92 years later. There’s quite a lot of room in that. Plus you can also say that I have no mining risk, because the drum is the uranium with the drum in it is already here. I can just write a little note and book transfer to it. There’s zero mining risk, no no supply chain risk. So that is obviously some utilities put put premium on that too. So I would say even at the levels today, there is still some some room for for these carry trades. So that’s when you have a connection between the spot market and the term market. One of the ways of having it. There could be other ways too, but, but that is, certainly is one of them. Anyway, terrific. So
Trey Reik 52:16
I’ll close with two short questions from the investor perspective, I always encourage investors, you know, if there’s rare earth headlines or uranium headlines in the paper, it doesn’t necessarily mean it’s the perfect time in the cycle to get involved. But I think I’m hearing from you that in this case, this is a good time, you know, for investors to begin long term focus on the sector. Is that fair? For
Per Jander 52:45
sure? I mean, it’s like, yeah, you can, you can, you can look on granule things happening. But I would say on as an overall play on nuclear energy itself, and uranium is obviously a key component of this. It’s looking extremely good. If you have a long horizon. You certainly haven’t missed Mr. Train or any of that stuff. It’s still plenty of time to get on but, yeah, do do thorough research. Obviously it’s more risky to pick individual names. I work with the trust. If you buy the physical commodity itself, of course there’s less risk, but, but obviously they could be less downside. If you pick a junior and then they get a permit, or they start mining, or they strike, they find a good ore body, you know, it’s, it’s the commodity investing. So it’s everything in between, but, but I would also say, yeah, the big, the big producers are great, but it’s like a company like Cameco that now also have reactor, the reactor component, through the Westinghouse investment. So that’s good. Or the big US utilities, like a constellation or a vistra. They’re big nuclear utilities. They’re, they’re all part of this story. So they’re, they’re, they’re, they’re going to benefit from this too.
Trey Reik 53:48
Well, you answered my last question, which was going to be, you know, what vehicles are available, but I think you just covered it. And to restate what you said, I think it’s important to have the commodity exposure first, say, through a Sprott trust and and then what I say the same thing about gold. I encourage people, if you’re going to have X amount of your portfolio dedicated to gold, make sure you get your gold exposure first, and that should be the largest portion. And then once you have that, you know, gold, access gold. Uranium, Max is uranium. When you get into the equities, you’re talking about different variables, but I think you would agree that it’s, you know, it’s important to have some representation in the miners of uranium.
Per Jander 54:33
Yeah, it’s good. And especially some of the bay like, I mean, I think, I think Cameco is really the only play that is not just on uranium itself. You have conversion in there. You have some enrichment projects that they have in there too, but they do have the reactor component of it too. Otherwise, you have some state actors, which is really hard, like it’s you can’t invest in them or or you have kazatomprom, but that’s a jurisdictions that maybe a lot of Americans aren’t necessarily comfortable in. Investing in. So it’s just do that. But I would say chemical is a safe bet. But then, yeah, sure you have some very exciting project. Any miner has projects up in Saskatchewan. Athabasca basin in Saskatchewan is obviously good, by far. Biggest asset out there that’s undeveloped is next gen. So that’s very, keep a very close look, the eye on that, because that’s an enormous, potentially enormous mine. But again, they’re, they’re not developed yet. So they have, they don’t have the permit yet. Hopefully they get it soon, but they don’t have the permit yet. So that’s when you get into the little bit more riskier spectrum, but you clearly have a lot more potential for returns. Too.
Trey Reik 55:35
Terrific. Well, pair, is there anything I missed, or do you think we’ve covered things fairly
Per Jander 55:41
No, I’d say you’re, you’re on the ball. You did your research well, and I’ll be next time. We’ll do, we’ll do a, we’ll do deep, deep dive on things here. But now you’re, you certainly ask great questions, and it was, it was a pleasure to be on. Thanks per
Trey Reik 55:55
Thank you very much. We’ll check back with you in six months or so and check on your progress. Sounds
Per Jander 56:01
great. I’ll be on looking forward to it. Thank you, sir. Thank you very much.
