Rhino you dog money miners. Guy Keller from Tribeca is on
his way and just got, well, not Guy, but uranium is brought to
you by Quattro Project Engineering I believe as the EPC
paste experts. Lads, get them over to Rook one.
Look, the bloody backfill and the reticulation that has to go
in there. They've put kilometres of it in
at Olympic Dam. They're the pace plan experts
send them over to the Atabaska Basin.
And for that matter, any other commodity as well, I reckon.
Oh mate, they'll. Be flat out on this if they get
it. Blown away chatting with the
team last week. Phenomenal what they can't do.
There's not many things, you know.
Exactly bloody next Gen. Give Jess Palmer and Quattro
buzz right now. So this was around 2, but it
probably worked out better 'cause guys may be closer to
picking the bottom now that he was when we originally caught it
a couple of weeks ago. Well, one one month wiser that
that gap and it was a relatively eventful month.
And regardless, since we had Guy on the last time and actually
shared the conversation, a lot has happened in the the world of
uranium, hasn't it, Maddie? Yeah, I think and look we've
gone through it all companies specific a lot about the the
contracting market guys, obviously got some goodies to
the ground with utilities funds, everyone involved in the uranium
bet whether that bets up or down.
So always a great chat with Guy the Australia, the voice of
nuclear for Australia. Here we go.
Let's get into it right how you think uranium in Australia, but
talk about the poster boy of it, Mr. God Keller.
But you've taken well, since Quakes has fallen off Twitter,
mate. You've had to take the global
mantle I think, mate. I don't feel like a poster boy
with the, the markets going the way they're going.
But you know, hopefully maybe I look like 1.
No worries. So we actually this is a bit of
a round two effort, but I think it oh God, when we did it last
time, I think it was just before boss's quarterly, I think and we
had a bit of a tech issue. So as we said, you're probably
glad you didn't know that one didn't go to air because you
might more chance of being right now.
One step, one day closer, right? As I said, you run the oh,
forget it every time. The nuclear, uranium and what's
your funds name, guy? Tribeca.
I do it every time. Tribeca Tribeca Nuclear Energy
Opportunities Fund. That's the one mate.
Stride. Take it away, boys.
Let's talk nuclear and uranium. I assume that's what we're
talking about with the guy. I think it is mate.
I think the I think the logical place to to start this one guy
is the the kind of elephant in the room, and that's the massive
short interest in a heap of the names.
So free the top five most shorted stocks on the ASX.
I'm sure this is no surprise to you is uranium miners now are
one's a developer and two miners.
So I'm interested in the to to hear your thoughts, particularly
with the lens that your strategy is a long short.
You're obviously behind the the long term narrative of uranium
here, but how are you thinking about this on on the Surface?
I think he's asking if you still made money on the way down, guy.
It can be interpreted anyway. Look, if somebody, I said the
other day, if somebody had given me a crystal ball six months ago
and said this is going to be the the pricing of a lot of the
uranium stocks, I would have thrown the crystal ball out, I
think. But yeah, look, it's been, I
mean, it's kind of, I mean, I, I've got to view it in a
positive, positive lens. The sentiment's terrible.
No generalist wants to touch the space.
Shorts are at all time high and continue to seem to be adding
and not just in the ASX, but we're seeing it in North America
as well. And, you know, I kind of sit
there and I say now I don't see the marginal gain of, of, of
shorts being added down here because we're getting such a, an
interesting part of the market that it's not going to take much
for that sentiment to change. And you know, it's, you've got
again, hedge fund dinners in, in New York, I think there was
eight or ten of these guys at a dinner 2 weeks ago, 60%, like
four or five of them were all pitching short uranium.
And one, one was asked, you know what, why, why are you still
short uranium? And he said, you know, because
it's a really easy short to control.
And, you know, there's an element of truth to that.
There's no big boys in this trade.
And and as I said, generalists are all sitting on the sideline
with a lot of things. But yeah, I mean, I it, it, it,
it's a head scratchers to, to how committed they've been to
the trade, to be honest to me. Why is it?
Why is it consensus short short uranium amongst the the the
hedge fund crowd in crowd in New York there guy?
I mean, to be honest, they were kind of a little bit late to the
party, right? The, the short really started
out of Asia in the ASX stuff last year, in the second-half of
last year. And that was thematic guys
responding. From what I could gather, there
was a, a bunch of guys that had made funds that had made money
being short the lithium space. They tried to roll across to
rare earths and realised that that there really wasn't a lot
of borough available in in any other's names.
And then, you know, somebody pointed out that spot price of
moving from 107 to 80 odd at the time and said, you know what
this is? This is actually not a bad
short. So the ASIC stocks
underperformed a lot of the North American stuff last year
because they were benefiting from the tech, you know, a data
centre AI type thematic. But I think when that DeepSeek,
I got it right. Normally I say deep fake or deep
DeepSeek. I think when that came came out
in January that that sort of gave the US hedges a, a runway
to go and get into that short. I think you know, plus I knew
there was lots of overhang sitting in the spot market.
The spot spot physical uranium trust has been pretty
ineffective because that's been really easy to control stopping
that going up, going to a premium and they've, you know,
these hedges have been in that. So, so it hints back to the it's
an easy shot to control. He's he's right.
The, the deep seat reaction guy was, was super, super
interesting. And I've, I've heard you speak
to the point that you don't have a lot of your demand thesis
backed up by data center demand and and these sorts of things.
But I am curious to hear your thoughts on the the sort of
joltiness, the sort of frothiness in the market that
such an announcement would lead to 10 plus percent movements in
the stocks. What does that kind of tell you
about the broader market sentiment at the moment?
Oh, I mean, look, market sentiment across all sectors is
is pretty nervous and dancing close to the door at the moment
when you throw market sentiment of of resources where, you know,
the resource sector had a pretty good January.
People made some money for the first time in a while and
they're all nervous. I mean, you know, we're waking
up to a different tariff headline every day and and then
seeing multiple changes to that, you know, during our day as
well. So, you know, it kind of
frustrated me at the time because I didn't really think
there was that much benefit to the uranium stocks on the build
up of all that sort of tech interest.
But they certainly got got whacked on the way down.
And you know, I mean, it's names that realistically are not going
to be supplying uranium to any tech company build out in the
next 5 years. Also getting caught up in that.
And you know, I think again, that's just this other just
another bow in the, in that sort of short thematic of being able
to point to that being able to point to with the physical
overhang we had in the spot market, you know, being able to
point to tariffs and all sorts of things to, you know, to to
add to that trade. So they've just been hammering
that point home. So how, how many other
organisations like yourself that have a long short strategy for
uranium are there around the world in, in the lens that like,
OK, for Australia, for instance, we've got two producers that you
can get enough borrow on to short.
Then you've got some developers like deep yellow as well that
are, that are up there as well. But once everyone's long short
and say you're, you know, net 10% long or 110% long and you've
got to hedge something is there, is there an accumulation of
shorts as well that are contributing to these shorts
just 'cause there's not as many names too short to hedge
yourself? Oh yeah.
Look at my, I hear, I hear so many different iterations of, of
why people are short. Some of the, you know, that boss
Paladin deep yellow versus their long other things.
And you know, and then you look in North America, I mean, you've
got a bunch of Canadian tariff baskets and almost every U.S.
investment bank's got out there and they're all short baskets
obviously because the tariffs and you've got like Denison and
Next Gen. in those baskets there.
There's no way that either of those companies are going to be
producing cake in a can to go to the US during this current Trump
administration, yet they're thrown into these short baskets.
You know, I can understand when you look at that and say
Kamiko's in there because they're selling a lot of uranium
to the United States at the moment.
So you you're getting a whole bunch of, you know, that sort of
stuff as well. So as I said, I've probably
heard a dozen different iterations of various reasons of
being short something versus long something else.
And you know it's from the perspective of me being long
short. I mean we are basically a, a
levered long portfolio and have been.
So our short is not necessarily a a big structural short, it's
it tends to be shorts maybe with country risk where we might be,
you know, long a country asset and short something else there.
If there's going to be some geopolitical problems, you know,
short via ETFs and and and hedging longs via put options,
which is mainly US listed stuff and some Canadian stuff.
So you know, again, should I have rethought that and been net
short the portfolio as I said six months ago, I would have
thrown out the crystal ball because there was just so much
positive news flow coming from the the nuclear side of things.
Yeah, Cos and how does it when they go when you're short URN or
URA, does that short interest in that ATF then translate into the
actual underlying equity holdings as well or not?
That's a good question. I actually don't know the answer
to that. I would assume.
I mean, it may be I. I doubt it though, because you
know, it's, it's, it's shares that are in existence already.
So they've already been. Created.
Yeah, it shouldn't be sure. It's it's against somebody who's
long it. So you know, if if you were, if
you were collapsing the share structure on the ETF like you
can do with some, then then yes, absolutely there'd be selling
pressure coming into those stocks.
But now you're short against something that stocks that are
shares that are already out there.
Such a substantial dislocation between the the spot price and
the term price right now, Guy, why?
Yeah, because the spot market's easy to I mean, look, we we we
had Grand Isaac came out at CFO of Chemical came out at, at at
the BMO conference and spoke about those ANU pounds.
You know, that was a Kazakh physical vehicle that for
whatever reason folded. They originally bought their
just shy £2.5 million from Cosatoprom.
Cosatoprom for whatever reason wasn't going to buy them back
back from them. And these are financial guys
that spent almost nine months in the market trying to sell their
material and there was plenty of people that wanted to buy it
from them. I'm guessing most of them are
happy that they waited, you know, so we've had that overhang
in that spot market, which is badly managed pounds grand Isaac
alluded that that had cleared the market, misinterpreted his,
his his context there, which he clarified later to some brokers,
I heard. But again, they were in buying
two weeks before he turned around at a conference and and
mentioned that overhang. So they're not that silly.
They're not going to they're not going to go and buy pounds.
They were basically mopping up the last of that.
So, you know, and, and that, that has been badly managed And,
and as I said, you know, the only real buyer that's not an
end user has been the spark and that's been managed
extraordinarily well to, to stop that trading at a premium.
You know, they're buying it at sub 10% and they're selling it
back out at -2% to stop at going to a premium.
Describe the mechanics there of of managing it from just from
stop trading at a premium. I mean there aren't many like of
these closed like vehicles like trust which which structurally
do trade it at at premiums for very long period of time.
They typically do trade at discounts, right?
So what are you seeing there that that says it's being
managed well? Just watching the flows and
talking to all the brokers and, you know, and talking to the
spot guys. I mean, it's, it's when, when
you do see it, as I said, at -10 or -11 they're coming in to buy
and, and when it's getting close to NAV, they're selling it
pretty aggressively and trying to hold that down.
You know, it's, it's, it's, I would love to see spot, you
know, if it gets close to a premium, I'd love to go and see
them just go and raise, do an institutional raise it now plus
one cent, go and raise 100 million bucks.
You know, and if you, if you're, if you're a fund like myself,
invested in a whole bunch of uranium and nuclear related
stocks and, and the spot price is being, you know, held back
because the, the financial buyer's not able to play.
And I pay up a couple of percent to do a raise at a premium.
Why wouldn't? You.
Yeah, Well, you're not forced. They're not forced to buy the
pounds at whatever price it is they can.
Buy them in two months if they want, as I said, spot with 100
million bucks in their pocket is would be just a different a
completely different market overnight.
You know, I'd think that the the first hedgey that would be short
would blink and it wouldn't be long before others follow it.
But you know, look, that's just ideal world.
If I don't, I don't know what their plans are and whether they
can do that or whether they would do that, but I'd love to
see it happen. And as sorry, sorry you don't go
and got, I was just going to say.
And As for the end users, I mean again, Kamika alluded to it,
something that we verified as well is that the fuel buyers, so
the utilities, remember there's only about two dozen fuel buyers
in the whole wide world. It's not like you've got 1000
steel mills bidding for a cargo vine or they're sitting there.
You know when, when the term price is below the spot price,
they're never mentioning the spot price.
They completely ignore it. But now that the spot price is
down at 63 or 64 dollars or $65, wherever it is, the utilities
are turning around to some of these developers and saying,
hey, you need to lower your floor price on on our contract
negotiations because the spot price is lower.
And as I said, the likes of Chamico are turning around and
saying, sorry pal, you know, we'll talk with an 8 handle,
thanks very much. Because spots are relevant.
And Mr. Utility, if you step in and try to buy half £1,000,000
in the spot market, it's not going to be with A6 on it
anymore. So they're not getting involved
because they're trying to arbitrage that in their
conversation with developers. But you look at so Constellation
for example, again one broker picked it up in, in North
America in their their financials, they talked about
their 2025 CapEx, which was 3 billion odd dollars, U.S.
dollars. So they're the biggest nuclear
generator in the United States at 21 gigs.
They're restarting 3 Mile Island, so 1.7 billion going
towards Three Mile Island. They made an explicit reference
to having just over a billion U.S. dollars to spend on nuclear
fuel with again an additional comment saying because we, we
want to secure our needs as well as building inventory.
So Constellation need to spend a billion U.S. dollars this year
on nuclear fuel, which includes uranium and and the spot
market's sitting here ignoring it because they've all been so
caught up in in that in all this short term noise.
Kaiju will make you feel better about short term noise.
I I noise you hear out of them's bloody Arser and Diamond dolls
just punching into the earth. What does that sound like?
Just it sounds like victory, the victory of potentially finding
some, the noise of ASO chips being accurately collected and
deposited and sampled and assayed.
I love that sound. Absolute state-of-the-art
sampling techniques. So sample management.
Is next to, next to, next to. I was going to say next to none,
but that sounds bad. Nah.
Well, in Speaking of management Traveller, you won't hear any
noise from management up above a bad drill cost blowouts because
it just doesn't happen. They're on your side.
The only sound I can like kind of think of that's probably most
accurate is just the the cash register just ticking over.
And working class man in the background, that's quite burden
that. So that is K drill.
Ohh. I just get get in their web and
prepare to be dazzled. What what do you think BH PS
role is in the spot market? Because from what I hear, like
most of the pounds that, you know, the size of what Olympic
Dam produces is the same as what one of the Cosatomprom assets
produces. Like £8,000,000 is a lot of
uranium compared to these small startups.
And from what I've heard, a lot of the stuff they sell, it
usually goes into the spot market.
Is that have they got a influence on the spot market
since it's so thinly traded and they just don't really care.
They just get rid of it anyway. So they, they definitely used to
and the subtle change that they've made is they're now
talking directly, more directly to end users still selling on
spot price terms. So again, Mr. Utility
negotiating with Olympic dam with A6 handle isn't going to go
into the spot market necessarily, but it's not going
through the spot market as far as I'm aware.
I mean, again, BHP was supposed to be the saviour of all
utilities with Olympic Dam expansion.
And you know, again, a few months ago they put out their
their documentation for the expansion of smelter and
refinery, which doesn't include any uranium expansion, which
means, you know, they won't be going to 12 or 14 or 16,000,000
lbs. Let the utilities have thought
they'll be staying at 8. So, you know, they again,
another bullish anecdote that the market kind of ignores
because we're all in beer mode. Is it you got much colour on
what the contract environment's like at the moment in terms of
like, are people like avoiding market reference pricing
mechanisms because the spot's trading so much lower because
you know, the flaws that they were talking about, you know, a
couple of months ago well above what the spot price actually is
now? Like are they going to more
fixed price arrangements or any info out of the very opaque
market that you've got? Yeah.
Look, I mean, I'm hearing obviously the likes of chemical
and they're quite public about it.
They're holding firm to the term price is their is their
negotiating point and they can. So they are.
I'm hearing as well that there's a few developers who are being
potentially told they should be doing more contract discussions.
Are breathing a little bit of a sigh of relief because they're
able to say whoa, you know, the utilities are trying to tell us
to lower our floors. So we're not going to engage
with them, which also means that they'll then delay decisions to
go and restart or, or, or turn their minds on.
And you know, those that are producing, so the 9 odd projects
that started last year, you know, those that don't have
contracts in place for for some of their incremental pounds are
also breathing a sigh of relief because we've really only seen
one of those projects come on reasonably on time.
Everyone else has had had issues.
So. So whilst the utilities are
sitting here trying to lower the floor price, most of them are
wanting to you don't not acknowledge that the spot price
should be a starting point for any any market related component
they've got just because they're all in the agreement that it
shouldn't be down here and. What what are the market related
ways that they can calculate the price of the contract as it
fluctuates? If they're not using the spot
price, can you use the mid term price or?
Yeah, they can use any price really.
I mean, some of what I'm hearing is, is a sort of an average,
average between the spot and the term as a, as a way of sort of,
you know, finding a middle ground there.
The floors and ceilings are still, you know, quite popular,
especially, you know, again, someone like Kamika doesn't
necessarily need it, but but for, for some of these FID
projects, they definitely want a floor in place.
And if it's got a six in front of it, they definitely won't be
signing it. So, you know, the floors and
ceilings are quite so they're, they're all calling them hybrid
contracts, which means it's a mix of a whole bunch of things
that makes it impossible for investors to work out exactly
what they're getting until until they publish some sort of weird
price in their quarterlies after they've sold it all.
We, we saw over the past year or so guy plenty of restarts or a
few handful of restarts start to, to come back online, start
to see some quarterlies come out.
And the one of the common critiques had been that, that
sort of 60 up to 100 bucks was an area that we would
incentivize plenty of production.
And obviously we've we've come back in price.
But just looking at the the performance of a lot of those
race starts and the the true costing that we've started to
see come out, has that changed your thinking on what incentive
pricing will actually look like going forward?
Oh yeah, 100 percent, 100%. I mean, it's as I said, we've
had 9 odd projects that that have had some level of
infrastructure CapEx and some level of production in the past.
And most of them have had cost blowouts, time problems and, and
ramp up issues. And, and we're sitting here with
a, with a, a short list of, of Greenfield projects that need to
build a mine, build a road, build a power line, build a
water pipe, build a, you know, the plant, build everything.
And they're sitting in a, you know, kind of saying, Hey, don't
worry about it. We know our costs will be OK.
It definitely has raised it, which is why I think you're
seeing some of these things, you know, push back on, on on a
myriad of reasons. But the utilities are still kind
of believing the corporate presentation saying, well, these
guys will be here in two years time.
Well, no, they're not. You know, it's going to be an
interesting year. And, and for a bunch of reasons,
I think utilities will be forced back upstream this year.
And I think they're going to start really getting a bit of a,
a reality shock that that some, a lot of these things aren't
going to be coming on when they think they are what, what is and
at these prices. What does that kind of look
like? Is that JV stakes?
Is that equity and projects? Is that helping them with debt
and getting off take? How do you think about them
coming upstream? Oh no.
I just think in the fuel cycle they're going to be forced to
look at uranium. You know, I think this whole, I
mean, we can get in the rabbit hole of Trump and Russia, but
maybe I'll just briefly make the comment and see if you want to
go down there. I think that a resolution
between Russia and the United States with respect to Ukraine
is actually going to be bullish uranium because it'll take the
pressure out of the downstream being the conversion and
enrichment that has so distracted all these utilities
for so long. And just in addition to that,
the converters are going to be saying to these utilities,
thanks very much for your contract, but we actually need
the yellow cake delivered to our site because things are tight
and we're not going to actually in the past, it's been a
flexible arrangement in delivering the yellow cake.
So that's why I think utilities will be coming back for the
uranium side, which means they're going to start trying to
wave useless pieces of paper in front of these developers
saying, here you go, here's a contract.
And guys like me are going to say to these developers, that's
actually a noose around your neck and a liability for you, as
we've seen very publicly in a few of these, you know, restart
projects that are hanging themselves on on legacy
contracts. We we can, we can go there if if
you, if you want to guy, I'm not going to talk about the, the,
the Russia Ukraine bit, but that's an interesting point.
But it's, it's a bit of a theme with like kind of the, the
smaller scale restarts as well, right?
ASX Peninsula really, really burdened by delays and blowouts
and and a contract liability. Yeah.
And, you know, I mean, at $30 uranium, that contract looked
OK, you know, and, and even had there been better decisions made
on that restart? And I mean, I guess there were
some things that were beyond their control with respect to
their drying and packaging. But you know, that's the thing,
these utilities, it's a perfect example.
These utilities are saying we're here as your partner, but if you
don't deliver us the uranium on time, then there's going to be
a, a financial penalty, you know, and you know, they're
provisioning money that needs to be going towards the, their,
their, their plant restart and, and there will feel development.
And that's what I'm saying to all these guys.
You know, if you're two or three or four years from production,
unless you have a commitment from or a requirement from debt
providers to, to, to show price certainty on a certain part of
your future production, don't do it.
And if you're then, if you are required to do it, put your
start date 12 months after you're telling me or telling the
market that you're going to start.
So that if you do have any delays, Because I guarantee you
if you start on time and you've got a contract in 2028 with a
utility to deliver some pounds and you say to them, hey, I've
actually got pounds in 2027, I guarantee you they'll take them
as opposed to sitting there in 2027 saying, sorry, I've had
some delays, I don't have it. And they're saying, well, you
need to find it or pay us some money for it.
So, you know, it's, it's been especially down here in the ASX
investors, oh, we want to see a contract, we want to see
contracts. It's like if you're going to get
cake in the can, you're a viable project full stop.
But you've got to be able to do that.
We're going to talk stocks, boys, or.
Yeah. Absolutely.
We'll start the probably the latest news.
I'd say be on call last week guy we've seen that just essentially
got hemorrhaged after I would say driven by the last line of
that announcement that the CEO was departing, which was you
know, tell he's pretty well regarded Fuller in the uranium
in the ISR industry. And look, they I think we spoke
about him last week. It just looked like even the
cash they had at the end of December, over half of that was
due to go to boss, which the first bit's already obviously
gone there. Just looks like they're under a
still under a lot of financial pressure to achieve that.
What's your take on non core and the Alta Mesa?
Yeah, and everything else. They got going on firstly, yeah,
doesn't Boss look like a rock star?
He just sold a whole bunch of pounds at 100 U.S. dollars a
pound at the spot price at 65. So I.
Think it'd be electing to. He'd be electing to take cash, I
think. I believe that would be prudent,
yeah. But I mean, look, it's, it's
another perfect example of, of restarts not being easy.
There was, I mean, ironically, I, I was actually had a meeting
with both of them on, on the Friday morning and, you know,
three days before it all happened and didn't, didn't get
any insight that that was going to happen.
And you know, it's a perfect example, I guess of, of just
things not going right and boards getting impatient or
frustrated. I mean, we've seen it here in,
in some ASX lifted stocks as well, where boards have got
impatient when you could probably argue the boards maybe
have a responsibility in, in that process as well.
But, but look, I mean, Encore, I mean, Alta Mesa, they had sort
of a first of all problem. They turned the plant back on.
Paul Goranson, CEO built that plant.
So he's a very good plant operator and they've got 1/3 of
it operating and and they were getting better recoveries and
better flows and than they anticipated.
So they found themselves in a little bit of a bottleneck with
well filled development. And, you know, they would now
sort of reassuring the market that they've solved that problem
and that the that potential bottleneck has been has been
rectified with getting more rigs on.
You know, they they've still got without pull there.
As I said, yes, there's some expertise around that plant, but
the second Second Circuit is basically just a few wires that
need to be plugged in. They've got certainly expertise
to be able to do that. But yeah, I mean, you're right,
again, it comes down to wording. That stock got slammed because
the interim CEO announced it was a was a legal officer.
And so immediately the US markets assumed that because
they were, you know, having to now deal with the US filing that
there'd been some legal issue and that this guy was going to
be the only one to get them out. What it turned out to be was
that the legal officer was the only other guy that had his name
on, on, on documents about to go to the SEC.
And so there was a 200 page technical document that they
figured that he was the one that knew that inside out, given he'd
read it a dozen or more or 1000 times or however many times you
read these types of things. And and they didn't really think
that the market would say, oh wow, the legal guys are
therefore there's a problem. So as I understand it, they've
they've been doing calls at the end of last week with, with
management with brokers and some of the key shareholders,
investors in the in the United States and sort of placated them
on that. But I mean, again, it's just
another example. You look at that price action
and say it's a 50% sell off warranted.
And the answer is no, because it's still a producing asset.
You know, they've still got another plant that they've
proven in Rosita that they've, they've got up and running.
They, they use those well fields that from, from last cycle and
they're developing their next one.
So you know, you kind of turn around and say on a valuation
perspective, it's, it's screening pretty cheaply.
You know, the good thing is, is there's call options in the US.
So for me, that was an easy way to, to flex back, back up there
was to, to buy some call options on that.
So if it does does continue to flounder around or or you know,
for whatever reason decide to go lower, it's not going to hurt me
too much. You think is boss appear to be
in a prime position with them one, because if they are under
financial stress, then if they do have to raise money and boss
did want to take, they're obviously they've ain't got
project level interest with Alta Mesa.
But if they did want to move on them, there'd be a hell of a lot
cheaper on a share price basis. But they've got the option to,
you know, wait for more pain if they want to.
What do you think? How do you think boss is
sitting? Like is it a negative effect on
them or more of a positive long term?
I think it's positive. I think it's sort of gives them,
I mean, I've, I've not, I don't know the details of the joint
venture agreement, but Duncan's proven to me over 8 years to be
pretty savvy operator. So I'd imagine that there's the
ability for them to get more involved in that, in that
project if, if there was going to be a problem and, and you
know, the reality is they've, they've the two companies have
got a good relationship. So, you know, if Encore for
whatever reason is in play, there's potential levers that
could be pulled there. Again, I don't have any of that
information and would be, you know, sitting there thinking
that it would be naive to think they're not in play down here
because, you know, they, they're in a good jurisdiction in South
Texas there. They've got good ability to ramp
there. And they're also in some other
places like Wyoming and South Dakota with some good assets.
So, so you know, I I would, it would be silly if boss was not
having a think about things, if if it started getting
interesting around other parties.
Right. What do you think about what
would you, you're being pretty supportive of boss along the
journey, so I assume you're bullish on him.
What do you what would you would you like to see them go overseas
or like they've just picked up the exploration JV ground in NT?
Hunting for another Jabberluka like everyone else's, no doubt.
Do you think having US operations and another
jurisdiction, another culture would make the business a bit
more complex? Would you rather see him stay in
Australia? What are you thinking?
Well, I mean, you know, I mean, firstly, I think that that he's
got Andy Wilde working with him now and, and Andy knows that
part of Australia pretty well. It's some pretty, pretty good
ground up there. So and a pretty easy way to get
a foothold into into having a sniff around there.
So I think, you know, it'd be interesting to watch, watch
that. I think that that earnings
structured pretty well. But yeah, I mean, look, it it
there was a reason he moved in with that strategic joint
venture with Encore. And, you know, it would be, it
would be, I would be much prefer him to be in in the US with
those guys doing things and running their all over things
where they've already got the ability to sort of lean on the
Encore team than other jurisdictions.
I mean, I don't see, I don't see these.
I mean, I know he used to be in the movie.
I don't see there's much value out in him being there or
Canada's too, too hard. And you know, every other
jurisdiction's kind of marginal if you're a player like him, you
know, and maybe Australia gets more interesting if the federal
election changes things And and you know, Roger Cook relaxes or
Christopher Lee up there in QLD relaxes.
Maybe there's some, you know, there's some opportunity there,
but but you know, a lot of it's needs work.
So you know again, how you can be short Canadian developers on
a tariff basket and not long US uranium projects on the other
side just befuddles me. But you know the time will come
there. How do you, how do you think
Boss's attitude towards M&A in general may have changed given
the the recent share price kind of movements like there was
Jabiluka and they kind of showed showed their hand their interest
there before everything kind of went S with ERA?
That set off a bloody snowball, didn't it?
Yeah. And then Encore as well that
that deal was struck when the stock price was was much higher
as well. What do you kind of think their
attitude would be right now? How they would kind of fund
that, you know? Yeah.
I mean that's, that's the problem with the whole sector,
right. There's there's not a huge
amount of confidence from any CEO to really consider serious
M&A. And even though there's some
phenomenal deals that could be done, I mean, you know, you kind
of sit there and say, OK, yes, your share prices is is not
performing, but but you know, it's a sector wide problem.
And I mean, I think it comes down to a, a CEO like him having
some strategic conversations with, with the right
shareholders and, and sort of filling them out as to what
their view is. Because I mean, you know, if you
get your, your register in support of what you're doing and
you're doing something that's, I mean, we've seen a lot of M&A
and consolidation in, in the uranium sector just to get a
bigger ETF weight, right? Like there's real no accretion.
A lot of it doesn't make sense. It's land grabs.
It's all this sort of stuff. They're probably all regretting
it now 'cause they're bigger weights in the ETF and getting
Hammond on the way down. But you know, it's, it's, if
it's a truly a creative deal and, and you've got a group of
shareholders on your register that think that that this is
truly a sort of 2020 like opportunity where this is just
going to go again, then I don't think you're going to get too
badly punished if you're doing a, a deal that people believe
in. I think hence why you know being
somewhere that investors are already comfortable with you
being. On the deal front, how are you
reflecting on on Paladin Fission?
Sort of, you know, now we're in March.
I think the deal kind of closed after a pretty lengthy process
late December. Dust has settled.
Inside yeah yeah well I mean I guess the the market seems to be
wants to wait for what they're going to you know they're going
through running through the ruler through that project and.
And. And looking at all the studies
and the costings and, and what have you, and, and they're
probably, you know, I wouldn't be moving too fast on it if I
was them at the moment because you'd probably want to bring
that out in a better market. But yeah, I mean, I don't, I
mean, Full disclosure, I didn't own fishing just because of, you
know, I just had different views on, on, on the project compared
to what they were telling me. And, and, and I don't see it
being a pre 2030 project anyway in my models.
I won't tell you where I've got it starting just in case they're
listening. But but you know, I mean it, it
gives them a foothold, I guess in, in a pretty good
jurisdiction. And it's, it's a much better
asset than, than, than some of the other things they were
pointing to in their portfolio. But yeah, it's got work to do.
But again, they don't really need to be doing much, very much
with it at the moment. Investors and shareholders have
sort of got over the fact that the deal's done with the benefit
of hindsight. Was it done at the right time?
It's the deal's done, you know, so it's something they can point
to as an an eventual second project.
Do you do you have comfort on their on their balance sheet?
Obviously they you know, absorbed a bunch of the cash
from from fishing, which is handy and the last kind of
quarterly, but you know, maybe showed things were OK.
But it came out in the half of your accounts that there was
actually a pretty chunky prepaid in there, which you know was it
was in the was in the detail. Accounting for a good chunk of
operating cash flow, so you know where how do you sit on the on
the on the balance sheet front for Paladin?
I mean, I'm, I'm more focused on, on what it looks like in the
fourth quarter, you know, because regardless of what they
were saying at the beginning and they, they kind of learnt the
hard way those stockpiles are and not an ore body.
And, you know, there was plenty of sort of stories as to what
sort of material was getting chucked on those at the end of
the days. And you know, they're going to
me, they're going to have to sort of prove that, that they
can ramp up the mining of that ore body successfully when they
go into mining, which kind of has me just holding out to the
to the third quarter. And just, you know, once I get
some confidence there, Oh, don't worry too much about the balance
sheet because they'll be able to get a, a consistent grade and,
and be able to, you know, prove their ability to ramp that that
asset a bit better. But, you know, they're kind of
just in a weird, weird zone here.
And you know, with all the smoke and mirrors about timing of
deliveries and sales and you know this sale missed that
quarter and what have you, you know, I don't anyway it's, it's
not a, a core position for at the moment.
They we always set up on site wise plus or equals more or what
have been what happened and with tipping those trucks I think.
The developers guy, the ones of ones of interest on the ASX I
can think of. You know, Bannerman Deep yellow
the in in Namibia. Are you, are you just thinking
that they get delayed in this kind of environment sort of
further and further incrementally?
Yeah, I mean, look, there was obviously a site visit there
after in Davao and a bunch of brokers and investors saw
Paladin, saw Bannerman deep Yellow and maybe one or two
others. And, you know, I think a lot of
them came back quite invigorated as to the the site preparation
that Bannerman had been doing. And so from that perspective,
you know, I kind of look at them and, and say, you know, they're
definitely making the right noises and definitely preparing
themselves. And, you know, like they've got
a reasonably long timeline before they actually get pounds
out. So but yeah, it's going to be
the next six months, you know, get through June.
And you know, I think you'll definitely, I mean, what I think
is potentially the, the, the, the, the pinch point, there will
be price and then, you know, the cost of debt or, or, or they can
go to the equity market, but everything else they're doing is
kind of preparing themselves. However, that doesn't
necessarily mean that that continues, right?
So if the price is not there, then they probably just delay a
little bit. And, you know, like, Brandon's
been quite clear on that and Gav's been running around town
here last week updating everybody as to, to to what
things look like. So, you know, they're making
progress. You know, Deep Yellow is taking
a slightly more conservative approach where John's saying I'm
ready to go, but I I'm not willing to do anything until
until the price is right. And, you know, he's sort of
March in the end of this month, I think.
Isn't he is, is that, is that where he is at the moment, end
of March? Or if I do, which was December,
Yeah. So, you know, the problem with
setting a date is you've already slipped it once, but I wouldn't
be upset with him if he slipped it again if he didn't think the
market conditions are right to go and do something there.
So, you know, there might be others that that kind of say
what's going on. But you know, I'm a really firm
believer that like Kenicka is kind of saying and and what the
conversion and enrichment guys, man saying in the market, you
know, prove there's a market for our pounds.
And if that manifests itself in price, then we'll go on, go on,
make the decision, you know, to build.
But we're not going to get landed out here like a shag in
the rock when you guys decide you don't want the pennants
because they can't go on the spot market.
So I'm not too worried about a couple of those projects because
as I said, jurisdiction's fine, permits are fine, you know, long
lead items, all that sort of stuff.
It it seems that it's just price that's holding back or end.
OR or energy flagged FID for I think it was roughly this
quarter as well. Mauritania not not in the movie.
Do you think that gets pushed to?
You know, look, they've, they've kind of surprised me, to be
honest. They've, it wasn't that long ago
that Mauritania had zero nuclear IAE, i.e., AE and none of that.
No policies, no government, no legislation, no radioactive
handling, no transport, no waste.
And so that country's come a long way.
And you know, they seem quite comfortable with the fact that
they've solved a bunch of those, a bunch of those issues around
what they need for developing. But again, yeah, it's going to
come down to are they going to be able to get the price they
need to secure the debt that they need and other the, the
debt providers they're talking to, are they going to be in a
position to move? Are they forced to, we're not
forced to, they go down the route of, of a joint venture
with, with a, a sovereign nation to, you know, to, to, to, to get
financing to do that. And, you know, for, as I said,
it, it comes down to like to them, it's, it's funding like
they need to solve that funding. They need to either be able to
convince investors that it's a good jurisdiction, they can get
the things done or there's, you know, a global agency or, or a
joint venture. So there's, there's still a few
things that need to happen there.
But you know, as I said, it's kind of I've been happily
surprised as to the progress they've made in country.
I've, I've got a couple on your, your portfolio allocation that
I'm interested to hear your thoughts on.
Just going back to what you said earlier about incentive prices
pushing out because of all these costs that have come out over
the past year or so. You know, ultimately that's not
great for for the miners themselves because that hammers
the the profit, but uranium price going even higher.
So, so firstly, how does that kind of tweak how you allocate?
Do you think more about putting more of the fund into physical
on the back of that sort of news?
Yeah, I mean, I've I've been kind of wrong on on, on sort of
backing the the successful restart stories.
But then I was looking through sort of performance elsewhere
and there's not many places you've been right, you've just
been less wrong. And, and so, you know, I, I have
not moved into spot. And at one stage I was kind of
playing that spot discount game that I was talking about before,
you know, when it was a big discount, buying it and when it
came in, sell it back out. And then I kind of realised that
I was probably participate, you know, contributing to, to, to
making my own life more difficult because it was some of
that was not letting the spot go to a premium.
And so, and, and I always kind of, you know, glass half full
was thinking that these turning points around the just around
the corner and that, you know, I wanted to be in the equity.
So, so if anything, it's, it's I've not been anywhere near.
I've not really added very much in explorers except, you know, 2
that are doing something. And I've kind of avoided a lot
of that ACM in in the bottom end of the capital stack because I
just think that's you need to prove the thesis is back.
You need to, to, to start shaking out these shorts and,
you know, and, and, and then they'll all come and raise money
anyway because they haven't been able to.
So, you know, if you think there's an exploration story
that that is going to get some legs and I'll get it on a
capital rise. So, yeah, I have sort of been a
little bit heavier on the because the reality is when
those heavily shorted stocks start moving, you know, they're
going to run pretty hard. And and hopefully I'll go on a
global tour and, you know, go and meet some of these blokes in
Manhattan that are now mixing cocktails because they've lost
their jobs. So things short uranium, but.
I'd love an invite to that to that dinner.
Just one more quickly on the on the portfolio allocation while
we're on it. You mentioned last year, I think
in an interview that you did kind of recently that you put a
lot of the fun toward the tech side of things giving you
flexibility in the nuclear opportunities name.
So I think you, you quoted 25 odd percent allocation towards
these things. I'm, I'm a little less aware of
how that basket has kind of performed relative to the the
uranium kind of names. Is the allocation still quite
chunky on on that side? Have you changed your thinking
in recent times? Well, the the good.
So it was actually up around 35% on a national basis, but most of
the exposure was via call options.
So, so it's, there was a few stocks, I mean, there was a few
names where I had still had stock as well.
And, and after we got a little bit of a bounce on after that
DeepSeek stuff, I, I hedged most of that out with some put
options as well, any of the stock I had.
And then I'm just starting to dip my toe back into some cool
options in these baskets because it's it's just so volatile.
It's just it's hard to like there's some of them are
screaming at me saying buy me, buy me, but I just can't.
I mean, I don't want to. I don't think I'm going to miss
the turn because it was such a sort of thematic and meme that
that, you know, a lot of tourists are in there and a lot
of tourists are out And I don't think they're necessarily
heavily short at it, but they're just not there at the moment.
So, so I kind of got some call options there.
The, the positions I have are hedged out and, and most of them
aren't causing me any grief if they go down.
So we'll just sort of play that one by and see how it, see how
it runs. I mean, the reality is none of
it's changed. None of that thesis has changed.
You know, Oh my God, whoever it was, Microsoft cancelled a few
leases, you know, which some bank in the, in the US or Canada
reported and, and everyone sort of went, oh, but you know,
that's more getting hit on just rotation, right?
There's this sort of rotation coming out, a lot of that stuff.
And they were the kind of investors that were there.
So, so I'm playing it. So I kind of cautious and as I
said, I was lucky that it's just such a good option market there.
I was able to not have too much of that deep, deep, deep
heartburn from deep sea. How are you weighing up all
those as you're saying, if everything's screaming at you,
buy me, buy me, buy me at the moment.
But is if spot is going down and there's so hard to get info on
who's contracted, who's not. So like, well, boss, we were
talking about previously, like I think we're aware.
I think we're pretty aware they're going to be, they've
been selling into the spot and then possibly going to.
So you can see why those equities are going down because
a lot of them haven't yet to put the big contracts in.
But how do you why up what's cheap and what's not when the
Sprite spot price is down and not knowing what they've
actually contracted out or not? Yeah.
I mean it's, it's so that that's a really good question.
I think are kind of looking at at so of those who are
restarting, I mean, the reality is most of them aren't producing
enough pounds to to really 'cause themselves a problem if
they were to just sit them in the converters.
You know, So you look at at at, I mean, you said boss.
I mean, he's actually just as I said, just probably monetize
that 250,000 lbs at a hundred U.S. dollars.
So, you know, like there's cash flow from that Encore loan that
that means they could probably just now ship some drums and sit
them in Confidant or Chemical or wherever they're going and
White, you know, it doesn't need to do anything. the US guys,
there was a few, yes, that was selling one probably continued
into the 70s but has stopped again now.
So, but again, that was sort of inventory they had.
They're not necessarily replacing it with millions of
pounds. There's no pressure for them.
But yeah, I mean, I think some of them, there is a thought
process that the longer this goes on, the the more desperate
some of these guys might get and, and, and sell their pounds.
But you know, as I said, it's not actually a huge amount of
pounds that that, that, that are sitting around as a result of
that. I mean, to the earlier point I
made, you know, I look, I look at the US for example, and you
know, from, from like you're seeing Laird Encore at these
levels, they're producing pounds and Canadian pounds are
allegedly going to get 10% more expensive.
I mean, it's just I, I can't understand how some of these
guys who kind of through most of their CapEx, most of their cost
issues and I've got can and you know, cake and a can ready to
sell. I can't sort of see why they're
all trading down as much as the, the whole sector.
They should be trading a little bit better.
But yeah, I mean, anybody with a legacy contract you got to look
carefully at because if they're behind on their ramp up and
they're just producing enough to deliver into a contract, what's
the price of that? Not going to be 80 bucks.
Now I don't think any of them got them fixed, is that if if
spot's 20 odd plus percent below term which it is at the moment,
like surely there must be more activity happening with carry
trades with spot at the moment or not yet?
I mean, look, I guess part of the problem is most of the
utilities aren't very well capitalised.
So they can't, it's hard for them or harder at these prices
to, to run a big carry book because the notional amounts
that are out are, are larger, right.
So what about trade utility? Well, that's most of them.
I mean, you know, like we're not, we're not, we're not.
This is not a, a copper or a, or a iron ore or a met coal or a,
or a fuel oil market. You know, we, we don't have the
Glencore's, the traffic eras, the, the Mercurias, the, and the
banks in this trade, right? Like most of the traders in
uranium, no one has ever heard of and, and even physical
traders and other commodities have never heard of these guys.
So it's just a, it's a really different, there's only one bank
in it and you know, potentially the most well known as Traxxas
out of the US who, you know, very specific in what they do.
So and the utilities aren't there, right?
Like at a $20 price, they had the ability because there was
brokers, there was other intermediaries getting involved
and getting in the middle of that and kind of financing it
all. But at, you know, at $65
uranium, the, the dollar amounts that you got to do for this.
And So what are you going to do? You're going to carry 100,000
lbs for a utility. They don't have the time to sit
there and negotiate that sort of stuff.
They're trying to get their conversion and enrichment out of
Russia. So you know.
What about next Gen. God have probably finished off
like you'd say one of the more influential.
Then again, you don't know what's influential on the market
these days out of consultant problem next Gen., but like
quite closer than ever to potentially be be doing some
sort of pre construction activities like or like to
really start progressing towards some sort of development.
Where where are they at? What are we going to say out of
them this year? Do you think in terms of
potential funding site activity once that sort of administrative
part gets passed by the government?
Yeah, I mean, that's exactly it, right.
I mean, there's a an assumption based on the timing of the of
the Denison hearings that that next Gen. will be pushed back
into early 26. You know, and that's just
literally an assumption because Denison or a month ahead of next
Gen. in some other, you know, bureaucratic thing.
You know, it'll be interesting to see what happens.
You know, there's obviously a new Prime Minister in Canada as
of today, Mark Carney, sort of be interesting to see whether he
drastically wants to change things around, around
potentially. I mean, you think about it,
right? You have got Trump wanting to
put a 10% tariff on, on all your energy exports to the United
States. Why wouldn't you try to remove
some of the regulatory burdens to, to, to, to, to say to him,
oh, look, there's, there's a whole bunch more that could come
on. He's he's ex Goldman Sachs too,
So Trump's dealing with a banker now.
Yeah, yeah. The Bank of England Governor,
Bank of Canada Governor, he's on the board of Brookfield
Renewables. So he was part of that
Westinghouse deal what Chemical did with Brookfield Infra.
So yeah, he's well, well, well trodden, well trodden career
man, you know, but Next Gen. kind of sitting there saying,
look, we've got the support of all the nations.
Don't look at Denison's timetable.
You know, we've got the Metis Nation, which, you know, it was
that part of that news headline saying blah, blah, blah, which
is completely irrelevant, not related to the Root 1 project at
all, you know, but, but Lee and the team are saying you're
right. Once we get this administration
done on the, on the, the hearing date for the the final sign off,
we're ready to go. And, you know, I kind of, it's,
it's hard not to believe them being outside last year and
seeing the preparations they're doing.
I mean, everything about that site is built to be a mine,
right? You know, you go up to all these
Athabasca sites and you, you're on an ATV going over rocks and
pebbles and boulders and, and, and bogs, like everything about
that site they've set up to, to be a mine.
So, and the reality is yes, leverage to spot whatever, but
it's, it's still a phenomenal ore body.
And you know, you kind of sit there and say, if you believe
$65, is it trading fairly here? I, I think the answer is
absolutely no. If you look at the term price
and say, is it trading fairly compared to the term price?
No, it's bloody it's, it's ridiculously low valuation
because that ore body is phenomenal.
So, you know, I think they again, it's just they're in a
short basket of all these banks or Canadian tariffs, which they
shouldn't be. And there's a whole bunch of
people pointing at headlines that that when you actually peel
the layer of the onion back, you work out that OK, yes, there's a
spat between the menace nation and and some exploration
tenements with the Saskatchewan government.
Nothing to do with next Gen. And then they came out and in
support and said we're 100% supportive and the market didn't
respond to it. I mean, it's, it's again the
mindset where the market is at the moment.
Very good, it'd be interesting once I get deep and can start
drilling in between themselves and PLS and see what else there
is. I know they've had other hits,
but yeah, that's what the the theory is like that old thing
joining up. That's like potentially a lot of
uranium coming out of that area once though.
Yeah, two dope holes to drill at the moment.
Yeah, Yeah, no, exactly right. I mean, you know, it's, it's
it's leverage Beta is, is, is that one, it's spot goes up.
That thing's going to RIP because, you know, again, you
can own that and does better for you than owning the the spots,
you know, plus, as I said, the the whole body.
Boys, you got anything? I think we're all out, guy.
I really appreciate your time. Thank you so much, Guy So.
Intrational, mate, but hopefully what are we like, you know,
second week of March, Hopefully this comes out just as
everything's turning and. We're running hard and.
You got till Friday the. Bottom, bottom and we bounce up
from here mate. Yeah, that's gonna be the
headline when it comes out. Guy Keller.
No, no, don't say pick the bottom.
Must say something different. That's right, just keep picking
it and you will pick the bottom at some point.
It's the title of the Yard. The episode mate, you ready
made? Easy boys, But as I said it, I
don't. I think it's the thesis hasn't
changed. There we go.
What? What was his last line there?
Guy Keller picks the bottom. It's like all the people that
pick the JFC. If you just keep picking it,
you'll pick it eventually. To be confirmed, I reckoned.
Yeah, it's right. Thanks to all the partners as
always. In the show we had K Drill as
well as Quattro Project Engineering.
Who has we got? Maddie.
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