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Ladies and gentlemen, welcome to
the business brew. 

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I am your host Bill Brewster. 
This episode features Mike alkin

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of sakem Cove partners. 
Sakem is SACHEM, Cove is COVEI 

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first found Mike when he was 
doing a, a podcast in, I think I

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found him late 2018, early 2019 
and he was laying out the 

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uranium thesis and he was doing,
I don't know if it was weekly, 

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it felt like weekly, but it was 
certainly regular. 

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He was interviewing all the 
junior miners. 

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He was talking to anybody that 
he could and laying his 

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investment out in public. 
And I see the trade is, is 

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getting a little bit more 
momentum. 

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We just had the news from 
Microsoft and Three Mile Island 

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and I always kind of said to 
myself, I was going to do a 

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uranium episode. 
I'd want to do it with Mike 

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because he was the guy, along 
with this guy on Twitter, John 

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Quakes, that were the two that 
were early and kind of helped me

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see what they were seeing. 
I didn't get deep enough to 

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really see it, but I appreciated
what Mike was doing by laying 

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his work out in public and found
it inspiring. 

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So he followed me on Twitter and
I was like, is this really Mike 

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Alkin? 
He said yes. 

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I said, dude, I'd love to have 
you on the pod. 

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He said yes, this is the 
product. 

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I hope you all enjoy it. 
As always, nothing in this 

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program is financial advice. 
Everything is for entertainment 

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purposes and education, Not just
entertainment, entertainment and

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educational purposes. 
Please consult your financial 

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advisor before making investment
decisions and do your own due 

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diligence. 
I hope you enjoy the episode. 

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Before this music drops, I do 
want to give a shout out to my 

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editing team at Speech Docs. 
You can find them on Twitter at 

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Speech and Docs's docs. 
Dax and his team is are 

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fantastic. 
All I can say is that Dax and 

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his team offer incredibly good 
value and I very much appreciate

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what they do on the back end of 
the show. 

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So if you are somebody who is 
thinking about starting a 

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podcast, please consider Dax and
his team at Speech Docs. 

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That's SPEECHDOCS. 
All right, ladies and gentlemen,

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I am truly excited to be joined 
by Mike Alkin goes by Footnotes 

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first on Twitter. 
And I would say that Mike put 

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out one of the podcast products 
that had me the most interested 

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in podcasting. 
And Mike, you can get into what 

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it was like when you started, 
but you are the person that I 

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associate the uranium idea with.
I remember listening to you in 

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2019 talking about how you were 
going to industry conferences 

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and there was no one in the 
room. 

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You were interviewing CE OS on 
your podcast before it was a 

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popular topic. 
And that you and this guy, John 

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Quakes, who I have never met in 
real life, but he is on Twitter.

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You're the two that, as the 
uranium trade is ripped, I have 

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rooted for both of you to make 
money on it, and I hope that's 

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what ended up happening because 
you deserve it. 

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Well, thank you. 
Thanks Bill. 

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It's great to be here. 
Yeah, that was feels like a long

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time ago. 
We started Sage and Cove 

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Partners, which is the 
investment vehicle that we that 

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we have to express the view in 
uranium and that was back in 

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2018 I think it was and back in 
2016 and 17 I started studying 

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nuclear power and uranium 
because the commodity was down 

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90% after Fukushima were in 
March of 2011. 

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So by 2016, the commodity came 
down 90%, the number of 

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companies had declined by 90%. 
The equities were down by about 

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that much. 
So it was very, very, those were

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hunting grounds where there was 
no one, no one really there. 

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And it's, it's in markets like 
that where you can sometimes 

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find a an opinion or you can 
form a view that is different 

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than consensus. 
And so that's what I was doing. 

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Yeah, I was. 
And to kind of share the view, I

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was doing a podcast and I was 
talking a lot about uranium and 

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there were not a lot of people 
doing it at the time. 

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There was no one doing it. 
And and I remember listening to 

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you and thinking like this guy 
is all in on this idea in a in a

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positive way. 
And you were just talking about 

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how in your career you had never
seen something so asymmetric and

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just the idea of of going into 
an area that there's absolutely 

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no one. 
There was no interest at the 

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time. 
It was. 

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It was really fun to listen to 
you put that product out. 

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Well, thanks. 
It's hard as an investor, it's 

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hard to find things where there 
it's not properly priced in in 

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the market, but there are 
pockets of that, right. 

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So you're trying to generate 
alpha, you're trying to a 

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benchmark, if you will. 
And and more often than not, 

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quite more often than not, 
prices reflect what what is. 

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So the way like we typically I 
like to find things is look 

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where others aren't and that's 
what uranium presented at the 

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time. 
Did you go through a period 

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where you had to ask yourself, 
am I the crazy person? 

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Because I I see opportunity here
and no one is listening. 

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It's a really good question, 
Bill. 

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So the hard part about looking 
at markets that are left for 

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dead people, you will use the 
term contrarian is you are 

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running into the fire, right? 
So right off the bat, you're 

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probably going against 
consensus. 

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But when you're trying to form a
view, you start to do your own 

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analysis. 
And that's one of the things 

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that human psychology comes into
play when you're looking at 

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markets that are that are have 
been so beaten up is recency 

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biases creep in and permeate all
corners of the market. 

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It could be the buyers, the 
sellers, the commentators, the 

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forecasters. 
And when you come into a market 

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without any of that baggage, but
you understand the basics of how

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to analyze companies and 
industries and understand the 

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drivers of supply and demand. 
There's somewhat of a playbook 

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to to doing that on both sides, 
both supply and demand side. 

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So when you come into a market, 
a disadvantage, it could 

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actually be an advantage. 
A disadvantage might be I, I 

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didn't know anything about 
nuclear power other than what 

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the average observer might have 
known and probably less. 

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I certainly didn't know the 
uranium market. 

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I So I came in without any 
biases and I came in and I said,

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let me just let the numbers and 
my conversations with people who

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understand this guide me. 
But to do that, I, I had to do 

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the numbers and I had to 
understand supply and demand. 

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I didn't want to take an 
investment bank's model at first

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because you need to understand 
where they are. 

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But I said, let me build this 
from the bottoms up. 

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Let me let me understand all the
operating minds in the world and

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what the supply situation is, 
what the costs are. 

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Let me understand the nuclear 
reactors, how many countries do 

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it? 
What's the demand outlook? 

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Because the narrative at the 
time was nuclear is dying and 

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it's going away. 
And after Fukushima in March of 

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11, nobody wants it. 
And that's why these things are 

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priced the way they are, the 
commodities and service 

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companies. 
So I but if you just take that 

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at face value, you'll never find
anything that might be a hidden 

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gem, if you will, or hiding in 
plain sight. 

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So coming to this market, I did 
that, I spent a good almost 

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couple of years doing supply 
demand on my own. 

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There's 430 reactors around the 
world and understanding the 

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country where they operate, the 
attitude towards nuclear, 

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understanding the math involved,
right. 

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Often as investors, you look for
heuristics. 

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What? 
Well, how many reactors are 

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there? 
How many pounds per reactor 

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would there be? 
Right? 

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You're looking for rules of 
thumb. 

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And as you start peeling the 
onion back, I realized that 

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rules of thumb don't apply here 
because the amount of uranium 

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needed for the reactor fleet 
around the world is not always 

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the same. 
It depends upon enrichment 

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capacity without. 
We won't go down that rabbit 

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hole, but there's a whole other 
segment you need to to learn. 

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And so as I was doing that and I
would go to these conferences 

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and I would talk to nuclear fuel
buyers, people who buy this 

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stuff. 
And it was hard for me at first 

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to really understand what I was 
dealing with because as, as 

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somebody at that time having 
over well over 20 years of 

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experience as a hedge fund 
investor, it was very, I've 

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talked to people in all 
industries that were on all 

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sides of the equation. 
But the people buying it, 

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typically we're curious as to 
what we were thinking as, as a, 

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when we were questioning them. 
If we were talking to a, to a 

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buyer at a company that was 
buying a product, they would 

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say, what are you as an investor
hearing? 

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What are you hearing from the 
other side? 

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What are my competitors saying? 
What are you hearing about 

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inventories? 
And they were inquisitive. 

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That was not this cohort. 
As I started speaking to nuclear

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fuel buyers, I, I was met with 
a, an enormous wall put in front

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of me telling me I'm an 
outsider. 

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I'm not a nuclear engineer. 
I don't know what I'm doing. 

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I should basically stay away 
and, and they've got it. 

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And I thought it was that, that 
attitude that just said to me, 

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something's not right here 
because the numbers I'm coming 

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up with, whether I'm looking at 
inventories or the amount of the

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cost of the supply or the actual
demand. 

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And for context, at the time the
price of uranium was 17/18/19 

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dollars a pound and it would say
what it was trading for in the 

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market. 
And as I did the analysis, I 

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realized that the average cost 
was somewhere in the mid 50s. 

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And I'm not that sharpest tool 
in the shed, but I know that if 

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something cost you mid 50s to 
make, you can't sell it for 17 

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for very long. 
So it was then and I had to peel

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back the onion saying well, why 
are they producing it at that 

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price? 
And you start to understand that

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there was a that the uranium 
market is 1 driven mostly by 

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long term contracts. 
You know, well, well north of 

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80% on average will trade in a 
long term window with contracts 

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that cover 57101215 years 
depending on the, the, the 

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contract. 
But that's where most of the 

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pounds trade. 
So after the Fukushima event, a 

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lot of these uranium producers, 
when the spot market had 

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declined precipitously, we're 
still selling into much higher 

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prices. 
So my my understanding of that, 

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when I was talking to fuel 
buyers at these nuclear 

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conferences, they were telling 
me that the price of uranium was

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17 and 18. 
It was going to 10, it was going

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to five. 
There was all this uranium out 

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there. 
And that's not what my math was 

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showing me. 
What my math was showing me was 

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that the model was that the long
term contracts that had been 

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signed before Fukushima melted 
down in 2011, we're going to 

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start to expire and rather 
rapidly. 

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And uranium producers could not 
sell $17.00 uranium when it 

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caught $1820 uranium when it 
cost him 2 1/2 times that, that 

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at some point production would 
have to start to shut down. 

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And so you ask, do you think 
you're crazy? 

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Yes, because as I'm talking to 
people who are obviously very 

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sharp, they're nuclear 
engineers. 

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It's but it's understanding as 
as you realize as an investor, 

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you have to understand 
incentives and you have to 

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understand market structure, 
right? 

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And Charlie Munger would always 
say, you know, show me the 

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incentive, I'll show you the 
outcome. 

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Well, it was as I was starting 
to go and talk to these folks 

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and realizing a couple of 
things. 

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Number one is they had no 
interest in what I was learning 

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on my journey. 
And even though I'm not a 

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nuclear engineer, I'm still 
somebody who's a market 

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00:12:01,800 --> 00:12:03,960
participant and I'm still 
somebody that. 

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And, and while I don't speak 
their language, I certainly is 

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sitting in a, at a, at a dinner 
table or a lunch table or at a 

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bar having a beer with them. 
I certainly could hold my own in

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supply demand conversation. 
And as I would talk about what I

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was learning and uncovering, I 
was shot down at every step. 

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And I thought, wow, that's 
interesting because I'm seeing a

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recency bias. 
What is now will always be. 

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And so they were, they were kind
of latched on to that. 

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And as I started peeling that, 
why I'm thinking, why is this? 

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I've been doing this a very long
time. 

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And over the years I've had 
many, I've been wrong many 

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times. 
I've been right more often than 

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not. 
But you're wrong and you're 

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00:12:41,520 --> 00:12:43,360
trying to understand where 
you've been wrong. 

227
00:12:43,360 --> 00:12:48,080
And I was thinking, what is it? 
Why are they so uninterested in 

228
00:12:48,080 --> 00:12:50,200
hearing what an outsider's view 
is? 

229
00:12:50,760 --> 00:12:56,200
And as I started to explore that
more, you start to understand 

230
00:12:56,520 --> 00:12:59,280
the makeup and the cost 
structure of a nuclear reactor, 

231
00:12:59,280 --> 00:13:01,960
which I've known. 
But it really started to come 

232
00:13:01,960 --> 00:13:05,320
into clear vision for me was the
fuel. 

233
00:13:05,840 --> 00:13:10,000
That uranium is just one part of
the fuel cycle that goes in. 

234
00:13:10,000 --> 00:13:13,680
You have uranium, you have they 
convert uranium from a powder 

235
00:13:13,680 --> 00:13:16,400
into a gas. 
It then gets enriched. 

236
00:13:16,400 --> 00:13:18,680
It then gets fabricated into 
pellets. 

237
00:13:18,680 --> 00:13:21,640
That takes 18 to 24 months to do
this stuff. 

238
00:13:22,000 --> 00:13:24,840
So there's many different, 
there's many different stages of

239
00:13:24,840 --> 00:13:28,320
the fuel cycle. 
And as I was starting to, to 

240
00:13:28,720 --> 00:13:32,920
think about what is it, what, 
what are the cost of that and 

241
00:13:32,920 --> 00:13:37,080
the cost of that, that entire, 
all those stages are probably 

242
00:13:37,080 --> 00:13:40,600
around 20 to 25%. 
And then what's the cost of the 

243
00:13:40,600 --> 00:13:43,400
uranium of that? 
And then that depends on the 

244
00:13:43,400 --> 00:13:47,000
price, but it could be mid 
single digits, high single 

245
00:13:47,000 --> 00:13:50,840
digits, somewhere around that. 
And so I, it was then then as 

246
00:13:50,840 --> 00:13:54,440
you start talking to them about 
that, you realize it's not a 

247
00:13:54,560 --> 00:13:57,720
meaningful cost. 
Let's for comparative purposes, 

248
00:13:58,080 --> 00:14:02,240
if I'm running a gas natural gas
power plant or a coal power 

249
00:14:02,240 --> 00:14:05,640
plant, my feedstock, the cat, 
the gas natural gas in the coal 

250
00:14:05,640 --> 00:14:08,920
are 80 to 90% of the cost of 
operating it Here. 

251
00:14:09,240 --> 00:14:11,800
The uranium is single digits 
cost of operating it. 

252
00:14:12,320 --> 00:14:15,360
So what I what I started to the 
vision that started to come to 

253
00:14:15,360 --> 00:14:19,080
me was uninterested market 
participants. 

254
00:14:19,440 --> 00:14:21,920
They're in the market very 
infrequently. 

255
00:14:22,120 --> 00:14:25,280
Why are they uninterested? 
Because the cost is de minimis, 

256
00:14:25,800 --> 00:14:28,200
not to say it's meaningless, but
it's de minimis. 

257
00:14:28,640 --> 00:14:33,640
And then as I started to explore
and ask questions at why are you

258
00:14:33,640 --> 00:14:38,000
not as concerned about this? 
I was obviously met with a wall.

259
00:14:38,080 --> 00:14:42,080
But what started to come to me 
was, and I asked flat out at a 

260
00:14:42,080 --> 00:14:46,200
particular dinner at a world 
nuclear conferences, if you had,

261
00:14:46,760 --> 00:14:49,680
I asked one actually their floor
fuel buyers at at a dinner. 

262
00:14:49,680 --> 00:14:53,160
I said if I were to, if you all 
had a really enterprising fuel 

263
00:14:53,160 --> 00:14:55,840
buyer that did the supply demand
work and said, you know what, I 

264
00:14:55,840 --> 00:14:59,720
think consensus is wrong here. 
We are 17, eighteen, $20 a 

265
00:14:59,720 --> 00:15:02,080
pound. 
We should be buying uranium 

266
00:15:02,080 --> 00:15:04,920
because the forecast going out 
of the future are for deficits 

267
00:15:04,920 --> 00:15:07,400
to be forming. 
Let me ask you a question. 

268
00:15:07,920 --> 00:15:11,640
Do you all, if the price were to
go parabolic and you had all 

269
00:15:11,640 --> 00:15:15,200
these great cost savings for 
your plant, do you participate 

270
00:15:15,200 --> 00:15:18,120
that in any way, shape or form? 
Are you rewarded financially? 

271
00:15:18,120 --> 00:15:20,360
Are you rewarded with a, a 
promotion? 

272
00:15:20,760 --> 00:15:23,640
The answer was I got laughed at 
was what are you talking about? 

273
00:15:23,640 --> 00:15:28,800
We're paid to secure fuel. 
So there is no these were buyers

274
00:15:28,800 --> 00:15:33,080
and and as you come to a market 
as an investor, you think buyers

275
00:15:33,080 --> 00:15:35,760
are traders, They're commercial 
creatures. 

276
00:15:36,000 --> 00:15:40,480
These aren't, these are really 
smart nuclear engineers that 

277
00:15:40,480 --> 00:15:43,640
happen to buy a product that 
happens to not be a major cost 

278
00:15:43,640 --> 00:15:47,880
component that happens to be in,
there's infrequent price 

279
00:15:47,880 --> 00:15:51,640
discovery on their part. 
And so it's a lesson in 

280
00:15:51,640 --> 00:15:53,720
understanding incentives and 
market structure. 

281
00:15:53,720 --> 00:15:58,160
And as I started to do that, I 
kept being told how wrong I was 

282
00:15:58,160 --> 00:16:00,040
by them. 
So back to your question that I 

283
00:16:00,040 --> 00:16:02,920
think I was crazy earlier in my 
career, I would have probably 

284
00:16:02,920 --> 00:16:07,240
thought I was crazy. 
I was surprised, but I've 

285
00:16:07,240 --> 00:16:12,360
learned over the years that 
narrative Dr. stories, but you 

286
00:16:12,360 --> 00:16:14,920
can outrun the numbers. 
You never want to build a 

287
00:16:14,920 --> 00:16:18,360
modeling and stick your head in 
a model and just believe your 

288
00:16:18,360 --> 00:16:20,520
model because that's how you get
run over, right? 

289
00:16:20,600 --> 00:16:24,280
Garbage in, garbage out. 
But this, it could be garbage 

290
00:16:24,280 --> 00:16:27,080
in, garbage out. 
But when I look back over my 

291
00:16:27,080 --> 00:16:31,640
career where I've had bigger, 
bigger wins, it's always been 

292
00:16:31,640 --> 00:16:36,440
driven by keeping it simple, 
keeping keeping the math simple,

293
00:16:36,720 --> 00:16:40,720
understanding it and knowing I 
know how to do basic math. 

294
00:16:40,720 --> 00:16:42,800
That's what this is. 
It's not complicated, but 

295
00:16:42,800 --> 00:16:46,600
understanding the narrative 
sometimes causes people not to 

296
00:16:46,600 --> 00:16:51,040
even bother doing that, right? 
So people sometimes are a lot 

297
00:16:51,040 --> 00:16:52,560
lazier than you might think they
are. 

298
00:16:52,560 --> 00:16:55,240
Everything that, like I said, 
most things are kind of priced 

299
00:16:55,240 --> 00:17:00,680
in, but but when things are at 
extremes too optimistic, when 

300
00:17:00,680 --> 00:17:04,400
things can't get worse or things
can't get better, some it's 

301
00:17:04,400 --> 00:17:08,119
somewhere in between and people,
people latch on to what is. 

302
00:17:08,160 --> 00:17:15,119
And so I, I didn't, I, I started
to actually try and what became 

303
00:17:15,119 --> 00:17:19,200
more was trying to figure out, 
get in their head as to what 

304
00:17:19,200 --> 00:17:21,760
makes them realize that they're 
wrong. 

305
00:17:22,160 --> 00:17:26,680
What is it that's going to cause
them to, to have a moment. 

306
00:17:26,680 --> 00:17:29,800
And, and the way I went about 
doing that was studying the 

307
00:17:29,800 --> 00:17:32,960
past, right? 
Because it might not rhyme, it 

308
00:17:32,960 --> 00:17:34,800
might not be exact, but it will 
rhyme. 

309
00:17:35,160 --> 00:17:38,840
And especially in these deeply 
cyclical industries, human 

310
00:17:38,840 --> 00:17:43,480
behavior is human behavior. 
And, and I, I realized in the, 

311
00:17:43,520 --> 00:17:47,680
in the last cycle and studying 
it, which was a big cycle, which

312
00:17:47,680 --> 00:17:53,680
was nearly the mid 2000s where 
prices went from $7.00 to $137 

313
00:17:53,680 --> 00:17:56,480
for a pound of uranium. 
It was the same narrative. 

314
00:17:56,760 --> 00:17:58,800
It was the same lackadaisical 
attitude. 

315
00:17:58,800 --> 00:18:03,160
It was the same approach from 
the cohort that bought it. 

316
00:18:03,600 --> 00:18:06,800
And because no one loses their 
job for paying a higher price, 

317
00:18:07,240 --> 00:18:12,760
it just continued. 
And so one of the things that is

318
00:18:12,760 --> 00:18:16,880
hard for a lot of for some 
institutional investors to do is

319
00:18:16,880 --> 00:18:20,280
to arbitrage the time. 
And here it was, you know, it's 

320
00:18:20,320 --> 00:18:21,560
always hard. 
Everyone said, what's a 

321
00:18:21,560 --> 00:18:22,760
catalyst? 
What's the catalyst? 

322
00:18:23,800 --> 00:18:25,760
Sometimes you don't know. 
You don't know what the catalyst

323
00:18:25,760 --> 00:18:26,800
is. 
You just know that there's a 

324
00:18:26,800 --> 00:18:29,440
mispricing. 
The price can't stay at 17, 

325
00:18:29,440 --> 00:18:32,240
eighteen, $20. 
If it's cost in the mid 50s, 

326
00:18:32,240 --> 00:18:35,840
it's got to get into the into 
the 70s, eighties at least at 

327
00:18:35,840 --> 00:18:37,840
the time. 
That's pretty asymmetric. 

328
00:18:37,960 --> 00:18:40,280
Could it go down a few dollars? 
Could it does it have to go a 

329
00:18:40,440 --> 00:18:41,280
lot higher? 
Yeah. 

330
00:18:41,440 --> 00:18:44,440
When? 
Not exactly sure, but somewhere 

331
00:18:44,440 --> 00:18:47,400
within the time frame of a year,
2 years, three years where 

332
00:18:47,400 --> 00:18:50,840
prices need to start moving. 
And if I'm right, I'm going to 

333
00:18:50,840 --> 00:18:53,080
annualize it a much greater clip
than I could find a use of 

334
00:18:53,080 --> 00:18:56,440
capital for other stuff. 
So that's kind of how I went 

335
00:18:56,440 --> 00:18:58,360
about it. 
I was surprised not I didn't 

336
00:18:58,360 --> 00:19:00,360
think I was crazy. 
I actually knew I was on to 

337
00:19:00,360 --> 00:19:03,440
something. 
The more of them I spoke to, the

338
00:19:03,440 --> 00:19:07,000
more obstinance I was met with, 
the more conviction I read I 

339
00:19:07,000 --> 00:19:09,480
had. 
I continue to bring up the 

340
00:19:09,480 --> 00:19:13,040
podcast, but it was fun to 
listen to you on the podcast go 

341
00:19:13,040 --> 00:19:16,240
through that because you were 
laying it out in real time, 

342
00:19:17,440 --> 00:19:19,040
right? 
And I remember you talking to 

343
00:19:19,040 --> 00:19:21,040
some CE OS. 
I mean, you were talking to 

344
00:19:21,040 --> 00:19:23,400
junior mining companies. 
You're talking to the big boys, 

345
00:19:23,400 --> 00:19:27,320
but you're just like, the people
are not listening and they're 

346
00:19:27,320 --> 00:19:29,480
not seeing what I'm seeing. 
Yeah. 

347
00:19:30,920 --> 00:19:33,520
You know Bill and there are 
people over the years now who 

348
00:19:33,520 --> 00:19:36,560
I've, you know the like the 
price of uranium sitting in the 

349
00:19:36,560 --> 00:19:38,720
$80.00 range. 
If you're looking at a long term

350
00:19:38,720 --> 00:19:41,840
contract with that's market 
related today with floors and 

351
00:19:41,840 --> 00:19:45,280
ceilings, a producer is going to
sell to a utility with the price

352
00:19:45,280 --> 00:19:48,280
of 80 bucks long term price 
between 80 and 82 depending on 

353
00:19:48,280 --> 00:19:49,920
which forecaster or price 
report. 

354
00:19:50,200 --> 00:19:56,720
So say $81.00 a utility is going
to pace probably $75.00 for a 

355
00:19:56,720 --> 00:19:59,160
floor. 
I mean, yeah, floor. 

356
00:19:59,160 --> 00:20:02,480
So the producer, if you think 
about asymmetry today. 

357
00:20:03,360 --> 00:20:06,280
Long term price 81 bucks that's 
a contract that kicks in in the 

358
00:20:06,280 --> 00:20:10,440
fourth year and forward from 
today the producer is going to 

359
00:20:10,440 --> 00:20:14,440
get a minimum of 75 and the 
ceilings that the that the 

360
00:20:14,440 --> 00:20:17,280
utilities want right now, those 
are anywhere from depending on 

361
00:20:17,480 --> 00:20:20,880
who the producer is and what not
you get 125 to 135. 

362
00:20:21,480 --> 00:20:24,920
So if you think about that, how 
asymmetrical that is for a 

363
00:20:24,920 --> 00:20:31,080
producer, that's a pretty, it's 
quite a fascinating asymmetry. 

364
00:20:31,280 --> 00:20:35,880
But but today's investors will 
stare even if that's what all 

365
00:20:35,880 --> 00:20:38,920
this year's your talk, they're 
still looking at the spot 

366
00:20:38,920 --> 00:20:41,520
market. 
And so you know, in uranium 

367
00:20:41,520 --> 00:20:43,200
there's two markets, there's a 
spot. 

368
00:20:43,200 --> 00:20:45,600
And then long term and I, as I 
mentioned a few minutes ago, the

369
00:20:45,600 --> 00:20:50,840
long term market is where you 
know, well north of 84 N of 80% 

370
00:20:50,840 --> 00:20:54,840
of the pounds trade. 
And the spot market is a market 

371
00:20:54,840 --> 00:20:58,960
that is a market where some 
producers might have a few 

372
00:20:58,960 --> 00:21:01,960
pounds that are uncontracted for
and they might put it in there. 

373
00:21:02,320 --> 00:21:06,560
Some are sold, some producers 
have contracts with traders that

374
00:21:06,560 --> 00:21:10,320
they'll sell some pounds to on 
spot market pricing, but most of

375
00:21:10,320 --> 00:21:13,160
the pounds that trade there, but
more than half of them. 

376
00:21:13,600 --> 00:21:18,080
So if if 15 to 20% of the pounds
in a given year trade in the 

377
00:21:18,080 --> 00:21:21,720
spot market, half of those 
pounds are traders churning 

378
00:21:22,000 --> 00:21:25,360
amongst themselves. 
Producers buy a little portion 

379
00:21:25,360 --> 00:21:27,960
of the rest and utilities buy a 
very small portion. 

380
00:21:28,360 --> 00:21:31,800
And so utilities, the end user 
is buying very, very, very 

381
00:21:31,800 --> 00:21:36,080
little in the spot market. 
But the spot market is where is 

382
00:21:36,200 --> 00:21:39,480
it at the end of each day is 
where a price is reported on it.

383
00:21:39,760 --> 00:21:44,240
So at 2:45 PM, the price will 
come out and investors will 

384
00:21:44,240 --> 00:21:49,240
stare at the spot price. 
And it's such an opaque market. 

385
00:21:49,240 --> 00:21:51,040
There's no, it's not electronic 
market. 

386
00:21:51,200 --> 00:21:53,640
You, you don't see how much 
volume traded. 

387
00:21:53,800 --> 00:21:55,640
We actually buy physical 
uranium. 

388
00:21:55,640 --> 00:21:58,760
So we, you get a sense for how 
much, many days it's, there's 

389
00:21:58,760 --> 00:22:00,120
nothing traded. 
Think about that. 

390
00:22:00,120 --> 00:22:03,760
It's a six, seven, $8 billion 
physical market that nothing has

391
00:22:03,760 --> 00:22:06,640
traded on many days. 
And it could go like that for 

392
00:22:06,640 --> 00:22:10,680
weeks, but yet the price might 
get reported a little. 

393
00:22:10,680 --> 00:22:13,280
If the bid and the ask move 
around without a trade, the 

394
00:22:13,280 --> 00:22:16,040
price can get reported. 
And at the end of the day, a 

395
00:22:16,040 --> 00:22:17,840
price would be reported. 
And people say, oh, look at the 

396
00:22:17,840 --> 00:22:20,000
uranium price. 
And they'll, they'll take that 

397
00:22:20,000 --> 00:22:22,680
view and form a view of supply 
and demand in the market. 

398
00:22:22,920 --> 00:22:27,320
They'll form that view of what's
happening as a proxy for the 

399
00:22:27,320 --> 00:22:29,800
uranium story and nuclear power 
story. 

400
00:22:30,400 --> 00:22:33,680
And it's absolutely absurd it 
it's not that. 

401
00:22:33,680 --> 00:22:36,560
It's not an insignificance of 
price, but if if you're a 

402
00:22:36,560 --> 00:22:39,880
trader, then it matters to you 
if you're pricing long term 

403
00:22:39,880 --> 00:22:43,840
contracts, they're aware of of 
what the spot price is. 

404
00:22:43,840 --> 00:22:46,880
But long term contracts, again, 
we're the bulk of the pounds 

405
00:22:46,880 --> 00:22:51,800
trade are driven by the economic
supply that the economics of 

406
00:22:51,800 --> 00:22:57,000
supply and demand what how many 
economically viable pounds are 

407
00:22:57,000 --> 00:22:59,800
there? 
So that price, the long term 

408
00:22:59,800 --> 00:23:06,000
price is reported once a month. 
And so the vast majority of 

409
00:23:06,000 --> 00:23:09,840
pounds trade in a market where 
there's very infrequent price 

410
00:23:09,840 --> 00:23:12,600
discovery and a lot of 
opaqueness. 

411
00:23:13,200 --> 00:23:16,520
And so where do investors turn 
their attention and choose to 

412
00:23:16,520 --> 00:23:20,160
focus their time and energy on 
the market where value is not 

413
00:23:20,160 --> 00:23:22,680
really created the spot market. 
Why? 

414
00:23:23,000 --> 00:23:26,080
Because it gives them a a 
barometer, right? 

415
00:23:26,120 --> 00:23:29,640
And and we talked about 
investors like opaque markets. 

416
00:23:29,640 --> 00:23:34,280
Why you can find an advantage is
that it's, it's not easy. 

417
00:23:34,600 --> 00:23:38,440
If it's hard, less people are 
inclined to really go down and 

418
00:23:38,480 --> 00:23:43,680
and dig deep. 
And so they will follow price, a

419
00:23:43,680 --> 00:23:49,240
price that is not as important 
as what creates value for these 

420
00:23:49,520 --> 00:23:53,000
producers of uranium. 
So it's understanding market 

421
00:23:53,000 --> 00:23:55,840
structure and it's understanding
that. 

422
00:23:56,280 --> 00:24:00,720
And it's, again, you go back to 
your crazy point, when you are 

423
00:24:00,720 --> 00:24:03,240
looking at markets like this, 
you just have to have the 

424
00:24:03,240 --> 00:24:07,480
conviction if you've done the 
work that that yes, you can be 

425
00:24:07,480 --> 00:24:08,880
right. 
And when you're asking yourself 

426
00:24:08,880 --> 00:24:12,400
if you're crazy, which you have 
to do every day, in my case, it 

427
00:24:12,400 --> 00:24:15,800
was just relying upon my 
conversations with people, a 

428
00:24:15,800 --> 00:24:19,400
little bit of experience and 
understanding that that usually 

429
00:24:19,400 --> 00:24:25,760
you can't outrun good math. 
Yeah, I mean, so when you, when 

430
00:24:25,760 --> 00:24:29,480
did you decide to really go all 
in on on the idea? 

431
00:24:29,480 --> 00:24:33,720
I mean, when you six months into
the research process, like what 

432
00:24:33,720 --> 00:24:36,600
was it 'cause if I'm remembering
correctly, I mean, you, you 

433
00:24:36,600 --> 00:24:39,080
really leaned in and it was a 
career pivot for you. 

434
00:24:39,080 --> 00:24:42,360
I mean, not, not a pivot in that
you were always an investor, but

435
00:24:42,360 --> 00:24:44,400
you were like, this is the idea.
Yeah, yeah. 

436
00:24:44,400 --> 00:24:47,640
Versus going from saying a 
generalist more focused on 

437
00:24:47,640 --> 00:24:51,000
cyclical industries, but to this
is the industry. 

438
00:24:51,200 --> 00:25:00,840
Yeah, that was late 17, early 18
and in 16 I was was a journey, 

439
00:25:00,840 --> 00:25:03,240
right. 
It was hey, I don't know this 

440
00:25:03,240 --> 00:25:04,960
market at all. 
I couldn't tell you the first 

441
00:25:04,960 --> 00:25:09,480
thing about nuclear power, but 
so I came at it when anything's 

442
00:25:09,480 --> 00:25:12,840
down like I said or in in the 
beginning 90% like that, it's 

443
00:25:12,840 --> 00:25:16,680
worth a look, but I came at it. 
But first ten years of my 

444
00:25:16,680 --> 00:25:18,560
career, I was mostly a short 
seller. 

445
00:25:18,560 --> 00:25:22,840
I was looking at looking for 
companies that were economically

446
00:25:22,840 --> 00:25:24,840
broken or had some bad 
characters. 

447
00:25:24,840 --> 00:25:28,160
So I was looking and doing that.
You're doing stuff away from 

448
00:25:28,160 --> 00:25:30,240
consensus, right? 
You're looking, you're doing 

449
00:25:30,240 --> 00:25:33,120
your own research and you have 
to be aware of consensus and 

450
00:25:33,120 --> 00:25:35,400
understand how it squares versus
consensus. 

451
00:25:35,800 --> 00:25:39,760
But I certainly you have to have
the courage of your conviction 

452
00:25:39,760 --> 00:25:43,840
and you have to sometimes make a
bet and not sometimes, but 

453
00:25:43,840 --> 00:25:46,320
you're making bets that are 
against mostly consensus. 

454
00:25:46,520 --> 00:25:48,720
Things are more often than not 
want to go up. 

455
00:25:49,120 --> 00:25:54,640
So it was once I started to 
like, so I came in as a short 

456
00:25:54,640 --> 00:25:58,080
seller if I could prove the bear
case and the bear case that I 

457
00:25:58,080 --> 00:26:02,120
could find was nucleus dying. 
It's too expensive, it takes too

458
00:26:02,120 --> 00:26:04,640
long to build. 
Renewables are coming, Wind and 

459
00:26:04,640 --> 00:26:07,160
solar will eat their lunch and 
that's pretty much it. 

460
00:26:07,800 --> 00:26:11,800
And I said, OK, let me do that. 
And it was very quickly that I 

461
00:26:12,480 --> 00:26:13,800
went down the wind and solar 
right. 

462
00:26:13,960 --> 00:26:18,240
And I didn't really hadn't known
that too much other then what 

463
00:26:18,240 --> 00:26:20,880
everyone else is reading. 
And as I did that, I realized 

464
00:26:20,920 --> 00:26:24,960
you can't replace a base load 
energy source with an 

465
00:26:24,960 --> 00:26:28,160
intermittent energy source. 
That's not how energy 

466
00:26:28,160 --> 00:26:30,640
transitions have occurred. 
And I read a lot of stuff by 

467
00:26:30,640 --> 00:26:34,400
Vaclav Slim, who writes great 
stuff on the energy market and 

468
00:26:34,400 --> 00:26:35,040
Smeal. 
Right. 

469
00:26:35,600 --> 00:26:37,240
So you did I say Slim Smeal. 
Yeah. 

470
00:26:38,560 --> 00:26:41,840
And I, but I read a lot of his 
stuff early on and he just 

471
00:26:41,840 --> 00:26:44,640
realized pretty easily and 
energy transitions occur over 

472
00:26:44,640 --> 00:26:48,160
time, long periods of time, not 
in a time frame that esters or 

473
00:26:48,160 --> 00:26:50,880
Wall Street wants them to or the
City of London wants them to. 

474
00:26:50,880 --> 00:26:52,800
And that's what I was getting 
the sense here. 

475
00:26:52,800 --> 00:26:56,080
And it was not easy to prove the
bulk case for wind and solar, 

476
00:26:56,600 --> 00:26:58,800
nor was it easy to prove the 
bare case. 

477
00:26:58,800 --> 00:27:04,400
And so as I started, my first 
quest was demand was OK. 

478
00:27:04,400 --> 00:27:07,120
And how many countries produce 
nuclear power? 

479
00:27:07,120 --> 00:27:10,760
30 at the time I needed to 
understand the attitude of each 

480
00:27:10,760 --> 00:27:12,800
of those countries towards 
nuclear. 

481
00:27:13,200 --> 00:27:14,880
Was it negative? 
Was it neutral? 

482
00:27:14,880 --> 00:27:18,160
Was a positive? 
And then by just going to the 

483
00:27:18,280 --> 00:27:22,160
World Nuclear Association and 
downloading databases of, of 

484
00:27:22,160 --> 00:27:24,280
reactors around the world, you 
start to put them on a 

485
00:27:24,280 --> 00:27:26,280
spreadsheet. 
You start to understand the size

486
00:27:26,280 --> 00:27:29,400
they are, how much output there 
is and the country's attitude. 

487
00:27:29,400 --> 00:27:33,000
And I went draconian and I said,
OK, if a country's neutral, 

488
00:27:33,000 --> 00:27:35,240
let's assume they're going to 
want to start closing reactors, 

489
00:27:35,240 --> 00:27:38,240
some of them. 
And as I did that, and it took 

490
00:27:38,240 --> 00:27:41,400
quite a while, several months, I
realized that even with the 

491
00:27:41,400 --> 00:27:44,360
draconian approach, there was 
still growth in nuclear power. 

492
00:27:44,360 --> 00:27:50,640
It wasn't dying and it was at 
the time 1112% of the global 

493
00:27:50,640 --> 00:27:53,000
electricity grid. 
That's a big chunk. 

494
00:27:53,360 --> 00:27:58,120
And realizing that I get it, 
people want wind and solar, but 

495
00:27:58,560 --> 00:28:00,640
just because you want it doesn't
mean it's going to happen. 

496
00:28:00,680 --> 00:28:03,480
And what I also realized was 
that's great. 

497
00:28:03,480 --> 00:28:06,000
When the wind stop blowing, the 
sun's not shining, you need 

498
00:28:06,000 --> 00:28:08,640
something else. 
So how's that going to work for 

499
00:28:08,640 --> 00:28:11,160
the CO2 emissions when you were 
going to have natural gas or 

500
00:28:11,160 --> 00:28:15,800
coal-fired back up? 
And I was, so I was, I started 

501
00:28:15,800 --> 00:28:20,080
to realize that it might, there 
might be some, some lengths 

502
00:28:20,080 --> 00:28:24,160
because the, the case at the 
time was nuclear was dead and it

503
00:28:24,160 --> 00:28:27,000
wasn't dead. 
So as long as there was a growth

504
00:28:27,000 --> 00:28:28,880
side of it. 
And then that's when I started 

505
00:28:28,880 --> 00:28:31,800
doing them, looking at every 
mine in the world, every 

506
00:28:31,800 --> 00:28:34,560
prospective project of the world
and realizing where the costs 

507
00:28:34,560 --> 00:28:36,440
were and how far disconnected 
they were. 

508
00:28:36,920 --> 00:28:42,440
And so as I started to do that, 
that's throughout 2016 and then 

509
00:28:42,440 --> 00:28:47,320
in 2017, you started to see some
production cuts started to come 

510
00:28:47,320 --> 00:28:49,560
in. 
And I was going to nuclear 

511
00:28:49,560 --> 00:28:52,920
conferences at the time. 
And I had just had enough 

512
00:28:52,920 --> 00:28:55,680
confidence after doing supply 
demand and studying the 

513
00:28:55,680 --> 00:28:58,760
inventories that I can now have 
conversations with people who 

514
00:28:58,760 --> 00:29:03,120
buy this stuff. 
And whereas, and I was OK to 

515
00:29:03,120 --> 00:29:06,480
say, hey, look, I'm new, go 
introduce myself, walk up to 

516
00:29:06,480 --> 00:29:09,160
them. 
And I'm really new at this. 

517
00:29:09,520 --> 00:29:12,200
I'm probably going to ask some 
really stupid questions, but if 

518
00:29:12,200 --> 00:29:13,800
I could get a few minutes of 
your time. 

519
00:29:14,280 --> 00:29:16,880
Yes. 
And I, I met someone who was at 

520
00:29:16,880 --> 00:29:20,080
the state owned producer because
auto prom who is kind enough to 

521
00:29:20,080 --> 00:29:22,440
invite me to a dinner one 
evening with the number of fuel 

522
00:29:22,440 --> 00:29:26,000
buyers. 
And it was those conversations 

523
00:29:26,240 --> 00:29:31,080
with the people buying it where 
I said I need to do this because

524
00:29:31,560 --> 00:29:34,160
my math might be a little. 
I'm still learning some of the 

525
00:29:34,160 --> 00:29:38,480
stuff, but I, I think I've got 
the supply demand situated. 

526
00:29:38,480 --> 00:29:42,440
And as I was starting to look at
it, I said, it's not dying. 

527
00:29:42,440 --> 00:29:46,200
I've got some and we've got a 
little bit of growth. 

528
00:29:46,640 --> 00:29:51,400
The prices need to move 
materially higher and the sell 

529
00:29:51,400 --> 00:29:54,160
side had disappeared. 
The right, the most of the banks

530
00:29:54,160 --> 00:29:56,920
were writing research on this 
fire their uranium analyst or 

531
00:29:56,920 --> 00:29:59,840
they transitioned them to some 
covering something else. 

532
00:30:00,680 --> 00:30:03,880
And I was like, this is really 
an abandoned industry, but it's 

533
00:30:03,880 --> 00:30:07,720
an abandoned industry that's 
1112% of the global electricity 

534
00:30:07,720 --> 00:30:09,040
grid. 
How is that possible? 

535
00:30:09,600 --> 00:30:15,240
And but it was, and then it was 
during these conversations in 

536
00:30:15,240 --> 00:30:21,080
early and mid 17 where I said, 
I'm right here, like this is a 

537
00:30:21,080 --> 00:30:25,240
symmetrical risk reward. 
And I started, I, I wrote a 

538
00:30:25,240 --> 00:30:30,240
research piece for myself and I 
started circulating it amongst 

539
00:30:30,240 --> 00:30:32,840
some of the people I have a 
great deal of respect for who I 

540
00:30:32,840 --> 00:30:35,120
worked for in the hedge fund 
business and who I was friends 

541
00:30:35,120 --> 00:30:37,280
with. 
And I said, take when you have 

542
00:30:37,280 --> 00:30:39,360
some time, take a look at this 
and tell me where I'm wrong. 

543
00:30:40,000 --> 00:30:41,520
And some people I really 
respect. 

544
00:30:41,560 --> 00:30:44,880
And they came back to me and 
they said, wow, nothing about 

545
00:30:44,880 --> 00:30:46,440
uranium. 
This is really interesting. 

546
00:30:46,640 --> 00:30:48,760
And they had a host of questions
And I started tracking down 

547
00:30:48,760 --> 00:30:51,200
questions and looking for 
answers. 

548
00:30:51,200 --> 00:30:56,680
And that was late 17. 
And a few folks came back and 

549
00:30:56,680 --> 00:30:59,080
said, have you thought about 
starting a vehicle? 

550
00:30:59,400 --> 00:31:03,680
Because this makes sense. 
And if if you wanted to express 

551
00:31:03,680 --> 00:31:06,000
your view, I would express my 
view alongside of you. 

552
00:31:06,680 --> 00:31:11,480
And I had considered it. 
I've had times in my career 

553
00:31:11,480 --> 00:31:14,680
where you just say I have to do 
this, you have to make a big 

554
00:31:14,680 --> 00:31:17,360
bet. 
And that was this where I could 

555
00:31:17,360 --> 00:31:20,520
not look around at the other 
part of any part of any market 

556
00:31:20,520 --> 00:31:23,160
and say I could see this type of
asymmetry. 

557
00:31:23,640 --> 00:31:27,280
And that's when I decided to 
express the view doing that. 

558
00:31:27,920 --> 00:31:29,840
And you're putting it on the 
line there, right? 

559
00:31:29,840 --> 00:31:31,720
Because you're either right or 
you're wrong. 

560
00:31:31,760 --> 00:31:33,960
And but that's the beauty of it.
The market will tell you 

561
00:31:33,960 --> 00:31:36,280
eventually. 
And so that was it. 

562
00:31:36,800 --> 00:31:40,960
And I don't know how many of 
those you see in in a career 

563
00:31:40,960 --> 00:31:44,120
lifetime where you feel as 
though you just look and say, 

564
00:31:44,120 --> 00:31:46,560
wow. 
And you have to be careful, 

565
00:31:46,560 --> 00:31:48,360
right? 
Because still everyday, Bill, I 

566
00:31:48,360 --> 00:31:51,880
come in assuming I'm wrong. 
I come in every day assuming 

567
00:31:51,880 --> 00:31:54,240
there's someone smarter than me 
out there doing this. 

568
00:31:54,240 --> 00:31:57,760
I assume every day there's 
someone that's found some piece 

569
00:31:57,760 --> 00:32:00,400
of information that I was 
unaware of. 

570
00:32:00,840 --> 00:32:05,760
But you also have to you also as
the as in the uranium investment

571
00:32:05,760 --> 00:32:10,640
as as it's grown and as the 
price has gone from 1718 up to 

572
00:32:10,640 --> 00:32:13,800
the 80s at one point it hit 100 
very briefly. 

573
00:32:14,160 --> 00:32:17,720
But as that's in the spot market
in the term market it 

574
00:32:17,720 --> 00:32:20,240
continuously grow. 
It's it's up 20% this year. 

575
00:32:20,240 --> 00:32:23,440
The term price while spot is 
backed off a bit, but again, the

576
00:32:23,440 --> 00:32:25,120
price I'm focused on its 
internal price. 

577
00:32:25,560 --> 00:32:27,880
But then as it becomes more 
populous, you start to get a 

578
00:32:27,880 --> 00:32:31,320
bigger investor, a broadening 
investor base that comes into 

579
00:32:31,320 --> 00:32:33,360
it. 
As that happens, you bring 

580
00:32:33,360 --> 00:32:36,960
people into it who are bringing 
their own approach to investing 

581
00:32:36,960 --> 00:32:39,520
into it. 
And this is you've seen a lot of

582
00:32:39,520 --> 00:32:42,240
the bigger hedge funds some some
some hedge funds are starting to

583
00:32:42,240 --> 00:32:46,360
come into it and you can't will 
your way to a thesis to truly 

584
00:32:46,360 --> 00:32:48,680
understand it. 
Yeah, I think you have to lay 

585
00:32:48,680 --> 00:32:51,640
out the numbers yourself and do 
them and understand enrichment 

586
00:32:51,640 --> 00:32:53,960
math. 
I've spoken with some folks and 

587
00:32:53,960 --> 00:32:57,400
they do very rule of thumb math 
on reactors. 

588
00:32:57,800 --> 00:33:00,760
And that's a sure way to get 
your head handed to you in this 

589
00:33:00,760 --> 00:33:04,400
business from a financial 
perspective because rules of 

590
00:33:04,400 --> 00:33:07,080
thumb in this, you got to be 
more exact than that. 

591
00:33:07,480 --> 00:33:13,880
So it's a fascinating sector. 
And again, it's one where it's 

592
00:33:13,880 --> 00:33:18,080
still as, even though it has 
become a bit more popular, it's 

593
00:33:18,080 --> 00:33:21,680
still a very small industry. 
It's still as opaque as it was 

594
00:33:21,680 --> 00:33:25,560
as the day that I started and 
what, what people don't see. 

595
00:33:25,560 --> 00:33:27,080
And I, you mentioned footnotes 
first. 

596
00:33:27,080 --> 00:33:29,160
I've gone dark since probably 
2019. 

597
00:33:29,160 --> 00:33:30,840
I'm. 
Yeah, well, I was looking for 

598
00:33:30,840 --> 00:33:34,880
you and I was like, he's gone. 
And then when you came on, I was

599
00:33:34,880 --> 00:33:38,520
like, is this really you? 
I still have it, but I, I just 

600
00:33:38,520 --> 00:33:44,120
kind of went dark because we're 
so in again, we have consensus 

601
00:33:44,120 --> 00:33:47,080
numbers that are from industry 
forecasters and we're, we're 

602
00:33:47,080 --> 00:33:49,760
clients of them. 
And we, we've really over the 

603
00:33:49,760 --> 00:33:52,200
years taken issue with industry 
forecasts. 

604
00:33:52,200 --> 00:33:56,720
And what I don't do publicly is 
I'm not, you know, is, but we do

605
00:33:57,000 --> 00:34:02,040
privately is, is we advocate for
our view with the industry 

606
00:34:02,040 --> 00:34:06,320
forecasters that here's why we 
think we're right. 

607
00:34:06,320 --> 00:34:08,920
And here's think about the IEA, 
right, how they're always 

608
00:34:08,920 --> 00:34:12,320
changing their numbers. 
All these quasi government 

609
00:34:12,320 --> 00:34:16,840
agencies are always, they're not
economic creatures and they're 

610
00:34:16,840 --> 00:34:21,880
not commercial creatures. 
And so we do a lot of quiet 

611
00:34:21,920 --> 00:34:26,400
behind the scenes activism, if 
you will, in that regard. 

612
00:34:26,800 --> 00:34:29,920
And a lot of a lot of what I 
would see on Twitter is, is just

613
00:34:29,920 --> 00:34:33,239
conversations that I'm going to 
wind up resorting to. 

614
00:34:33,560 --> 00:34:35,360
Let's look at the math. 
And I'm not going to share our 

615
00:34:35,360 --> 00:34:37,600
math with people. 
So I just decided to back off 

616
00:34:37,600 --> 00:34:39,639
there. 
Well, I mean, that makes sense 

617
00:34:39,679 --> 00:34:42,520
in your position. 
In this particular thesis, you 

618
00:34:42,520 --> 00:34:45,800
basically become the source and 
then you're giving away all your

619
00:34:45,800 --> 00:34:47,239
IP. 
It doesn't make sense. 

620
00:34:47,280 --> 00:34:49,360
That's a fairpoint, yeah, Yeah, 
Agree. 

621
00:34:50,520 --> 00:34:52,080
But. 
When you were starting, it was 

622
00:34:52,440 --> 00:34:56,920
like I said, it's just it's cool
to see somebody that put it all 

623
00:34:56,920 --> 00:35:01,360
out there in real time. 
And I kind of see the thesis 

624
00:35:01,360 --> 00:35:04,280
floating around now and I just 
always go back to your early 

625
00:35:04,280 --> 00:35:07,760
stuff, 'cause I'm like, that's 
the guy that I'm rooting for in 

626
00:35:07,760 --> 00:35:11,440
this entire trade because he put
it all on the line and it's fun,

627
00:35:11,440 --> 00:35:12,440
man. 
It's cool to watch. 

628
00:35:12,520 --> 00:35:16,840
Are you as comfortable now that 
it's got some attention on it? 

629
00:35:16,840 --> 00:35:20,320
Or do you find yourself the kind
of investor that that is more 

630
00:35:20,320 --> 00:35:22,120
comfortable when things are more
hated? 

631
00:35:22,400 --> 00:35:24,880
That's a great, great question, 
a fantastic question. 

632
00:35:25,400 --> 00:35:27,400
First of all. 
So I see a lot of the bigger 

633
00:35:27,400 --> 00:35:29,760
funds will come in. 
And what's amazing is I've been 

634
00:35:29,760 --> 00:35:31,120
in a hedge fund business a long 
time. 

635
00:35:31,120 --> 00:35:32,800
I worked at a couple of really 
big hedge funds. 

636
00:35:32,800 --> 00:35:36,240
I was a partner at one for for 
almost a decade. 

637
00:35:36,760 --> 00:35:40,720
Yet I will see many of the 
bigger, some bigger name hedge 

638
00:35:40,720 --> 00:35:44,480
funds in the trade and never 
receive a phone call. 

639
00:35:44,560 --> 00:35:46,960
I get phone calls from 
investors, from hedge fund guys 

640
00:35:46,960 --> 00:35:49,320
or from mutual fund guys who 
want to ask questions. 

641
00:35:49,880 --> 00:35:52,800
But then you see some bigger 
firms come in and so I get fair 

642
00:35:52,800 --> 00:35:57,360
amount of inflow, but I'll see a
lot of stuff that you would 

643
00:35:57,360 --> 00:35:59,960
think that if there's only a 
very, there's only a couple, 3, 

644
00:35:59,960 --> 00:36:02,800
a few people that do this, you 
might get a phone call and just 

645
00:36:02,800 --> 00:36:04,880
say, hey, you want to kick it 
around. 

646
00:36:05,520 --> 00:36:09,080
And that is not, that doesn't 
happen all the time. 

647
00:36:09,680 --> 00:36:11,840
So it doesn't happen a lot at 
all. 

648
00:36:12,000 --> 00:36:16,440
And so I their idea dinners as 
investment banks will hold idea 

649
00:36:16,440 --> 00:36:20,760
dinners, I might send one of my 
guys or I, I will very rarely, 

650
00:36:20,760 --> 00:36:23,400
occasionally I'll go, but not 
all the time. 

651
00:36:23,680 --> 00:36:28,120
But in, in the last year, you've
seen a more accelerated pace of 

652
00:36:28,120 --> 00:36:32,400
bigger funds coming in and they 
have thesises that they are 

653
00:36:32,400 --> 00:36:34,000
convinced is they're going to 
drive it. 

654
00:36:34,000 --> 00:36:37,000
And then it all always reverts 
back to what spot pricing doing 

655
00:36:37,560 --> 00:36:40,800
and and you know I'm not going 
to engage in that. 

656
00:36:41,560 --> 00:36:44,720
Yeah, well, that that's nice to 
see though, because you can say 

657
00:36:44,720 --> 00:36:46,760
to yourself, well, people still 
aren't even asking the right 

658
00:36:46,760 --> 00:36:47,920
questions. 
Absolutely. 

659
00:36:47,960 --> 00:36:50,040
But I do see. 
So for instance, some periods 

660
00:36:50,040 --> 00:36:52,840
where when everyone's piling in 
and they want to buy it, I'm 

661
00:36:52,840 --> 00:36:55,320
like, if it's for the right 
reason, yes. 

662
00:36:55,320 --> 00:36:57,960
But if it's because, you know, 
they think Spot's going to have 

663
00:36:57,960 --> 00:37:01,520
a huge move, you know, like this
year is a great example. 

664
00:37:01,800 --> 00:37:04,760
Spot is down. 
I don't know, high singles, low 

665
00:37:04,760 --> 00:37:09,920
teens term pricing where that's 
where the magic is made is up 

666
00:37:10,040 --> 00:37:14,920
2122% and why? 
Because that's telling you that 

667
00:37:14,920 --> 00:37:18,360
utilities and their and 
utilities have not contracted at

668
00:37:18,360 --> 00:37:21,800
the pace they did last year 
meaningfully below and on a 

669
00:37:21,800 --> 00:37:26,120
lower volume, there's prices are
still higher and that that's 

670
00:37:26,120 --> 00:37:30,320
kind of like perfect, right? 
It's because if volumes are 

671
00:37:30,320 --> 00:37:35,560
down, then normally pricing is 
down here, volumes are down and 

672
00:37:35,560 --> 00:37:39,600
pricing's up because there's 
really very little economically 

673
00:37:39,600 --> 00:37:42,760
viable pounds. 
And so that will sort itself out

674
00:37:42,760 --> 00:37:46,680
over time. 
But you know, you got, for 

675
00:37:46,680 --> 00:37:50,000
instance, a lot what we're 
seeing now is with data centers 

676
00:37:50,000 --> 00:37:52,440
and AI. 
And just on Friday, Microsoft 

677
00:37:52,440 --> 00:37:56,040
announced a fabulous deal there 
with the Constellation. 

678
00:37:56,040 --> 00:37:58,240
They're bringing back Three Mile
Island. 

679
00:37:58,240 --> 00:38:02,520
Think about that. 
Microsoft signed a 20 year power

680
00:38:02,520 --> 00:38:05,160
purchase agreement with the 
constellation of bring back 

681
00:38:05,400 --> 00:38:07,720
three of all reactors 3 mile 
island, right. 

682
00:38:07,720 --> 00:38:10,000
So why? 
Because they need the energy for

683
00:38:10,000 --> 00:38:14,800
their data centers. 
So this is a huge deal for both 

684
00:38:14,800 --> 00:38:18,360
That puts the Good Housekeeping 
seal of approval on. 

685
00:38:18,360 --> 00:38:21,600
It's the second deal from a from
a major tech company, but it's 

686
00:38:21,600 --> 00:38:24,880
great for nuclear and, and 
earlier in the year you saw a 

687
00:38:24,880 --> 00:38:28,440
deal much earlier in the year 
and that kind of drove a lot of 

688
00:38:28,680 --> 00:38:32,520
investor interest. 
And I understanding the role of 

689
00:38:32,720 --> 00:38:37,120
AI and data centers in nuclear 
power and uranium is important. 

690
00:38:37,240 --> 00:38:40,200
It is fabulous for nuclear power
plants. 

691
00:38:40,680 --> 00:38:45,040
It is fabulous because it gives 
them a, it validates how 

692
00:38:45,040 --> 00:38:49,760
important clean energy is, a it 
validates how important reliable

693
00:38:49,760 --> 00:38:53,200
base load energy is. 
And the dollars from this are 

694
00:38:53,320 --> 00:38:55,480
fantastic for the nuclear power 
plant. 

695
00:38:55,480 --> 00:38:59,520
And I think it creates a great 
reason to build new reactors. 

696
00:38:59,520 --> 00:39:03,280
But also you're seeing plants 
that were closed come back, 

697
00:39:03,280 --> 00:39:07,160
Palisades, Michigan, this one 
coming, this one coming back. 

698
00:39:07,160 --> 00:39:09,920
That's, that was in nobody's 
uranium forecast. 

699
00:39:09,920 --> 00:39:14,440
So those are great, but you have
to understand the context of 

700
00:39:14,440 --> 00:39:17,240
that. 
That's overtime, right? 

701
00:39:17,240 --> 00:39:19,400
So overtime reactors will get 
built. 

702
00:39:19,440 --> 00:39:22,840
Overtime, these plants will come
back online. 

703
00:39:23,400 --> 00:39:27,520
The physical spot trader of 
uranium right there, 7 or 8 

704
00:39:27,680 --> 00:39:31,400
traders of physical uranium with
not a lot of balance sheet 

705
00:39:31,880 --> 00:39:34,200
capability. 
Not that they're small entities,

706
00:39:34,200 --> 00:39:36,880
but the uranium trading side of 
it doesn't have significant 

707
00:39:36,880 --> 00:39:39,360
balance sheets. 
They see an announcement, 

708
00:39:39,360 --> 00:39:42,280
they're not going to run out 
today and buy uranium for that 

709
00:39:42,280 --> 00:39:45,160
announcement because a plant is 
coming back online in three 

710
00:39:45,160 --> 00:39:47,480
years. 
That's just not how it works. 

711
00:39:47,480 --> 00:39:50,320
It's wonderful for the overall 
nuclear theme. 

712
00:39:50,320 --> 00:39:54,040
It's wonderful for all the 
future uranium needs, and it is 

713
00:39:54,040 --> 00:39:58,200
great for all of that. 
But if if people pile in 

714
00:39:58,200 --> 00:40:01,600
thinking that it's going to 
immediately go parabolic 

715
00:40:01,600 --> 00:40:04,160
tomorrow, they have to 
understand the context. 

716
00:40:04,480 --> 00:40:05,960
Right. 
And again, they're focusing on 

717
00:40:05,960 --> 00:40:10,600
spot where you'll you'll see 
that really manifest itself is 

718
00:40:10,600 --> 00:40:13,560
in the is is in long term 
pricing because the utilities 

719
00:40:13,560 --> 00:40:15,960
will want to go out and secure 
for these plants. 

720
00:40:16,360 --> 00:40:20,440
So it's just as I see people 
come in and if I see the 

721
00:40:20,440 --> 00:40:23,000
narrative, their narrative, 
right? 

722
00:40:23,280 --> 00:40:24,960
I have to be aware of their 
narrative. 

723
00:40:24,960 --> 00:40:26,640
I have to respect their 
narrative. 

724
00:40:26,640 --> 00:40:30,160
I have to respect their 
viewpoint and it, it informs how

725
00:40:30,160 --> 00:40:33,120
I'm positioned. 
Ultimately, all the stuff is 

726
00:40:33,120 --> 00:40:36,640
great for it, but you just have 
to understand who the 

727
00:40:36,640 --> 00:40:39,720
participants are or what their 
expectations are of it. 

728
00:40:39,760 --> 00:40:43,520
And in, in such an opaque 
industry, I, I, I can't tell you

729
00:40:43,880 --> 00:40:47,480
how many times I've spoken with 
really sophisticated investors 

730
00:40:47,880 --> 00:40:50,480
that I talked about the 
difference between spot and 

731
00:40:50,480 --> 00:40:53,280
term. 
And then all of a sudden spot 

732
00:40:53,280 --> 00:40:55,120
will have a few days down and 
they're calling up saying, 

733
00:40:55,120 --> 00:40:56,360
what's wrong? 
What are we missing? 

734
00:40:56,800 --> 00:40:59,960
You're not missing anything. 
That's not where the value is 

735
00:40:59,960 --> 00:41:02,360
created. 
You're missing that it doesn't 

736
00:41:02,360 --> 00:41:04,640
matter. 
Yeah, you're missing that it's, 

737
00:41:04,640 --> 00:41:07,760
you know, but you realize that 
people really need something to 

738
00:41:07,760 --> 00:41:11,480
look at every day, right? 
Just taking and, and again, I, I

739
00:41:11,520 --> 00:41:14,200
think a lot of it goes back to a
lot of investors like to take 

740
00:41:14,200 --> 00:41:15,840
shortcuts. 
And I get it, they're looking at

741
00:41:15,840 --> 00:41:17,720
many different industries are 
doing different things. 

742
00:41:17,720 --> 00:41:21,160
They use heuristics. 
I so I think that's where the 

743
00:41:21,160 --> 00:41:23,080
opportunities created. 
Sometimes it creates some short 

744
00:41:23,080 --> 00:41:24,600
term noise. 
You just had to pull back in the

745
00:41:24,600 --> 00:41:27,080
uranium equities in the last few
days they've been ripping, but 

746
00:41:27,560 --> 00:41:30,520
you saw people piling into it on
AI and data centers in the 

747
00:41:30,520 --> 00:41:33,360
spring and all of a sudden 
uranium, the term price was 

748
00:41:33,360 --> 00:41:36,080
going higher, but the spot price
was going down a little bit and 

749
00:41:36,080 --> 00:41:37,520
people were saying, wait a 
second, how does that is? 

750
00:41:37,520 --> 00:41:39,240
So what's happening? 
Why is the term price? 

751
00:41:39,240 --> 00:41:40,480
Yeah, where is the spot price 
going up? 

752
00:41:40,480 --> 00:41:43,320
You're like, Oh my God, you 
know, like, what are you like? 

753
00:41:43,320 --> 00:41:46,120
OK. 
So that kind of informs how I 

754
00:41:46,120 --> 00:41:49,560
want to be positioned as in 
terms of do I want to be fully 

755
00:41:49,560 --> 00:41:51,680
invested at any time, Do I want 
to have a little bit more cash 

756
00:41:51,680 --> 00:41:53,640
around that type of stuff? 
Yeah. 

757
00:41:54,120 --> 00:41:57,880
So back back what six years ago 
or so, you weren't having those 

758
00:41:57,880 --> 00:42:00,760
kind of conversations. 
But now, now positioning might 

759
00:42:01,160 --> 00:42:03,160
might matter a little bit more. 
Exactly. 

760
00:42:03,160 --> 00:42:05,320
And then you get to the point 
where you just kind of RIP the 

761
00:42:05,320 --> 00:42:08,520
Band-Aid off and just say, you 
know what, I'm, I'm ripping the 

762
00:42:08,520 --> 00:42:12,800
Band-Aid off because the 
fundamentals are so good that 

763
00:42:13,240 --> 00:42:15,400
I'm willing to withstand some 
more volatility. 

764
00:42:15,400 --> 00:42:18,000
And, and, and in, in my head, 
we're kind of at the RIP the 

765
00:42:18,000 --> 00:42:21,560
Band-Aid off stage. 
You know where, yeah, I know 

766
00:42:21,560 --> 00:42:23,560
you're going to take, you know, 
sometimes you're going to see 

767
00:42:23,560 --> 00:42:27,000
some volatility down because 
maybe the spot price moves down 

768
00:42:27,000 --> 00:42:28,960
a buck or two, whatever it be a 
few bucks, who knows? 

769
00:42:28,960 --> 00:42:32,200
Or it goes up a few bucks. 
But but in in the stuff that I'm

770
00:42:32,200 --> 00:42:35,000
more and more honed in on, I 
just, you feel really good about

771
00:42:35,000 --> 00:42:36,040
it. 
And those are the times where 

772
00:42:36,040 --> 00:42:38,480
you just say that's it. 
And eventually the others will 

773
00:42:38,480 --> 00:42:41,520
catch up to it. 
But yeah, we're talking about 

774
00:42:41,520 --> 00:42:44,640
six years ago, the risk from the
Russians. 

775
00:42:44,640 --> 00:42:47,120
I mean, I remember giving a 
presentation at a conference, I 

776
00:42:47,120 --> 00:42:49,680
think it was in Vancouver, it 
might have been in 2017, talking

777
00:42:49,680 --> 00:42:52,760
about the geopolitical risk. 
And one of the things that I 

778
00:42:52,760 --> 00:42:56,840
couldn't understand as a 
layperson coming into this is 

779
00:42:57,440 --> 00:42:59,600
how is it? 
Am I missing something or 

780
00:42:59,640 --> 00:43:01,880
between the Russians, the 
Kazakhs and the Uzbeks, they 

781
00:43:01,880 --> 00:43:05,520
said half that. 
The Americans buy half their 

782
00:43:06,440 --> 00:43:12,000
uranium from them and nuclear 
power is 20% of the US electric 

783
00:43:12,000 --> 00:43:14,960
grid. 
Like again, I know I'm not a 

784
00:43:15,480 --> 00:43:19,600
geopolitical expert at all. 
I know probably just what the 

785
00:43:19,600 --> 00:43:22,840
average person does about it. 
Now I pay more attention to it 

786
00:43:22,840 --> 00:43:25,480
the last several years because 
it's what I've needed to do, but

787
00:43:25,480 --> 00:43:29,840
I'm certainly no expert. 
But really like you're AUS fuel 

788
00:43:29,840 --> 00:43:32,240
buyer and you feel in a Western 
or Western European fuel buyer 

789
00:43:32,240 --> 00:43:33,960
and you really actually think 
that that works. 

790
00:43:34,400 --> 00:43:38,160
You think that if you're AUS 
produce, if you're AUS nuclear 

791
00:43:38,160 --> 00:43:42,400
power plant and you look back 
and say in 1981 and 82 that the 

792
00:43:42,400 --> 00:43:46,240
industry used £50 million 
uranium for its nuclear power 

793
00:43:46,240 --> 00:43:50,760
fleet and it bought £44 million 
from America, American uranium 

794
00:43:50,760 --> 00:43:53,960
producers. 
And Fast forward to 2017 and 

795
00:43:53,960 --> 00:43:59,800
today you use roughly 50,000,000
lbs uranium and you buy and in 

796
00:43:59,800 --> 00:44:03,280
the US produces a few 100,000 
lbs. 

797
00:44:03,360 --> 00:44:06,080
Like you think that's normal. 
That's just not normal. 

798
00:44:06,080 --> 00:44:09,000
That's not good. 
At some point, you run risk of 

799
00:44:09,000 --> 00:44:12,240
something happening and that, 
and at the time of my 17 

800
00:44:12,320 --> 00:44:16,200
presentation, I called it, the 
US is playing checkers while 

801
00:44:16,200 --> 00:44:20,400
Putin's playing chess in, in 
terms of nuclear power and 

802
00:44:20,400 --> 00:44:24,200
uranium security. 
And so, you know, Russia 

803
00:44:24,200 --> 00:44:28,920
controls 40% of the global 
enrichment market, 30% of the 

804
00:44:29,160 --> 00:44:32,400
conversion market, 15% of the 
uranium market. 

805
00:44:32,400 --> 00:44:33,880
These are all part of the fuel 
cycle. 

806
00:44:34,440 --> 00:44:40,240
So just looking at that, at how 
lackadaisical the US fuel buyers

807
00:44:40,240 --> 00:44:43,760
are, I could say, and not every 
one of them, but more, way more 

808
00:44:43,760 --> 00:44:47,480
of them than not. 
So at the time, I felt those 

809
00:44:47,480 --> 00:44:50,440
were important points to bring 
up and people just yawned at it.

810
00:44:50,720 --> 00:44:53,920
And even today, the fuel buyers,
I don't, I mean, I'll see them 

811
00:44:53,920 --> 00:44:56,200
in a conference, maybe I'll chat
with them. 

812
00:44:56,200 --> 00:44:57,640
But I, I've been there, done 
that. 

813
00:44:57,800 --> 00:45:01,320
And they were, they've been 
telling me I'm dead wrong since 

814
00:45:01,320 --> 00:45:04,760
2017. 
I mean, I, I went to the Nuclear

815
00:45:04,760 --> 00:45:08,480
Energy Institute, which is the 
largest trade body in the world 

816
00:45:08,600 --> 00:45:10,360
besides the World Nuclear 
Association. 

817
00:45:10,360 --> 00:45:13,600
But in the US, it represents the
interests of those in the 

818
00:45:13,600 --> 00:45:19,040
nuclear industry. 
It it it read the utilities and 

819
00:45:19,040 --> 00:45:22,360
they represent them in Congress 
and they go lobby for them. 

820
00:45:23,240 --> 00:45:29,320
And back in 2018, we went to 
them and said the forecasts that

821
00:45:29,320 --> 00:45:33,120
are out there from industry 
forecasters, we think are not 

822
00:45:33,120 --> 00:45:34,960
only wrong, but they're 
materially wrong. 

823
00:45:35,480 --> 00:45:38,120
And it's if they're driving, 
looking in the rearview mirror 

824
00:45:38,280 --> 00:45:40,080
and they said, OK, go take a 
walk. 

825
00:45:40,080 --> 00:45:42,440
We don't know you. 
And we kept at it and I kept 

826
00:45:42,440 --> 00:45:46,360
going to them and finally found 
someone there that was very 

827
00:45:46,360 --> 00:45:49,800
willing to listen to us. 
And we said, look, here's our 

828
00:45:49,800 --> 00:45:53,000
math and here's a deck and 
here's our math. 

829
00:45:53,000 --> 00:45:57,720
And it's not our own forecast. 
This is our analysis of the 

830
00:45:57,720 --> 00:46:00,840
forecasts that are made. 
And This is why they don't make 

831
00:46:00,840 --> 00:46:03,440
sense. 
And again, we're not nuclear 

832
00:46:03,440 --> 00:46:06,000
experts. 
And, and I was very grateful to 

833
00:46:06,000 --> 00:46:08,240
have somebody there take the 
time to listen. 

834
00:46:08,840 --> 00:46:11,480
And they said, OK, we'll come 
speak at our annual conference. 

835
00:46:11,920 --> 00:46:13,320
You can speak to the fuel 
buyers. 

836
00:46:13,320 --> 00:46:19,640
And we did in 2018 and that was 
I think fall of 2018 and I stood

837
00:46:19,640 --> 00:46:21,760
up there and said you folks have
done a wonderful job. 

838
00:46:21,840 --> 00:46:25,880
You were buying, you're not 
signing long term contracts 

839
00:46:25,880 --> 00:46:29,520
after Fukushima, the price 
uranium was in the 70s and and 

840
00:46:29,520 --> 00:46:32,960
then it's down in here in the 
high teens, low 20s. 

841
00:46:33,360 --> 00:46:36,040
Congratulations, you didn't re 
up on long term deals. 

842
00:46:36,040 --> 00:46:38,880
You bought you, you sucked some 
pounds out of the spot market. 

843
00:46:39,160 --> 00:46:42,080
That's when spot matters when 
there was excess supply, which 

844
00:46:42,080 --> 00:46:44,600
there's not now said. 
So you guys have done a good job

845
00:46:44,600 --> 00:46:47,600
over the years and you're 
looking at industry forecasts 

846
00:46:47,600 --> 00:46:50,320
that would suggest to you that 
you can still stay out of the 

847
00:46:50,320 --> 00:46:53,440
contract market for a long time.
And let me just share with you a

848
00:46:53,440 --> 00:46:55,160
viewpoint as to why that's 
different. 

849
00:46:55,520 --> 00:46:58,560
And the numbers I'm going to 
present to you are not our 

850
00:46:58,560 --> 00:47:01,080
numbers of our our outlook on 
the future. 

851
00:47:01,080 --> 00:47:05,760
It's uranium math and nuclear 
math as you guys know it and why

852
00:47:05,760 --> 00:47:07,560
it just seems like it's 
illogical. 

853
00:47:08,080 --> 00:47:12,080
And we did that and I stood up 
there for, I don't know, 3540 

854
00:47:12,080 --> 00:47:17,040
minutes and I came off the the 
stage and someone approached me 

855
00:47:17,040 --> 00:47:18,640
and said, how dare you come 
here? 

856
00:47:18,640 --> 00:47:22,760
And I said I'm sorry. 
They said I you're just some bad

857
00:47:22,760 --> 00:47:25,160
Wall Street person who only 
cares about money. 

858
00:47:25,160 --> 00:47:27,000
And these are good hard working 
people. 

859
00:47:27,000 --> 00:47:30,520
Like what is wrong with you? 
And I, I said, like, are you 

860
00:47:30,520 --> 00:47:31,880
serious? 
Like what are you out of your 

861
00:47:31,880 --> 00:47:32,880
mind? 
Like, who are you? 

862
00:47:33,480 --> 00:47:34,680
And so I said, you have a 
minute? 

863
00:47:34,880 --> 00:47:38,200
And she said, why? 
I said, well, come over here, 

864
00:47:38,200 --> 00:47:40,640
Let us show. 
I was with Tim Shaler, who works

865
00:47:40,640 --> 00:47:43,480
with me. 
And I said, let us show you like

866
00:47:43,480 --> 00:47:45,000
how we come to these 
conclusions. 

867
00:47:45,000 --> 00:47:46,360
Let us show you what a model 
looks like. 

868
00:47:46,360 --> 00:47:48,200
And it's, you know, it's 
enormous, our model. 

869
00:47:48,200 --> 00:47:51,080
And again, you don't want to get
lost in your model, but that 

870
00:47:51,320 --> 00:47:53,400
that's how we drew our 
conclusions. 

871
00:47:53,400 --> 00:47:56,680
And not long into showing this 
person, she said, wow, I had no 

872
00:47:56,680 --> 00:47:58,520
idea. 
I thought you were just some to 

873
00:47:58,520 --> 00:48:00,760
a bad Wall Street guy. 
I'm like, well, I don't even 

874
00:48:00,760 --> 00:48:05,680
know what that means, but OK. 
And, but, and, and so prices 

875
00:48:05,680 --> 00:48:09,240
moved up a little bit throughout
2018 and we kept coming back to 

876
00:48:09,240 --> 00:48:13,280
the NEI saying prices this 
forecast aren't changing and 

877
00:48:13,280 --> 00:48:16,520
they need to. 
And they said present again. 

878
00:48:16,680 --> 00:48:22,160
And I did that in Nashville and 
2019 and in the fall, and I was 

879
00:48:22,160 --> 00:48:26,320
met with the same disdain. 
Fuel buyers would come up to me 

880
00:48:26,320 --> 00:48:28,400
and say, you have no idea what 
you're talking about. 

881
00:48:28,400 --> 00:48:30,000
I could buy all the uranium I 
want. 

882
00:48:30,000 --> 00:48:35,160
Prices are going to 15 and 10. 
I had one of them taunt me by 

883
00:48:35,160 --> 00:48:36,560
saying things. 
It was really like they were 

884
00:48:36,560 --> 00:48:38,880
really I was. 
Again, not all, they're not all 

885
00:48:38,880 --> 00:48:41,280
like this. 
But I was really, really 

886
00:48:41,280 --> 00:48:46,080
surprised and taken aback by the
lack of intellectual curiosity 

887
00:48:46,680 --> 00:48:50,480
about a someone else's view from
people who are really bright. 

888
00:48:51,120 --> 00:48:55,720
And so that I can't tell you how
much conviction that has given 

889
00:48:55,720 --> 00:48:57,520
me. 
And one of the things you see 

890
00:48:57,520 --> 00:49:03,880
now is you have expert networks 
as who provide hedge funds and 

891
00:49:03,880 --> 00:49:06,840
mutual funds experts to speak to
in any industry. 

892
00:49:07,200 --> 00:49:09,840
And so if you're a hedge fund 
wanting to get up to speed right

893
00:49:09,840 --> 00:49:13,200
now on the nuclear power 
industry, you're going to say, 

894
00:49:13,240 --> 00:49:15,200
hey, go get me 3 nuclear fuel 
buyers. 

895
00:49:15,200 --> 00:49:18,480
I'd like to speak to them about 
uranium and they're going to get

896
00:49:18,480 --> 00:49:20,360
on the phone and they're going 
to speak to then and for years 

897
00:49:20,360 --> 00:49:22,160
that I'm sure they've been doing
this, they're getting it on the 

898
00:49:22,160 --> 00:49:24,200
phone and speak to three fuel 
buyers and say, yeah, there's 

899
00:49:24,200 --> 00:49:26,880
plenty of uranium out there. 
And those are the same folks 

900
00:49:26,880 --> 00:49:29,040
when the price was 17 was 
telling me that. 

901
00:49:29,400 --> 00:49:32,560
And and versus here you're 
seeing floors and ceilings at 

902
00:49:32,560 --> 00:49:36,600
1:25 and 1:35. 
They are the gift that keep on 

903
00:49:36,600 --> 00:49:39,560
giving. 
Yet the way the structure of the

904
00:49:39,800 --> 00:49:42,280
research process is they're 
going to expert networks. 

905
00:49:42,280 --> 00:49:45,400
They find these people and if 
you don't understand and have 

906
00:49:45,400 --> 00:49:48,520
them understand the how the how 
the sausage is made, you're 

907
00:49:48,520 --> 00:49:51,320
going to be misled. 
Not not they're not miss 

908
00:49:51,320 --> 00:49:53,320
purposely misleading. 
It's just what their own beliefs

909
00:49:53,320 --> 00:49:56,200
are. 
And so it's it's it for me. 

910
00:49:56,200 --> 00:49:59,600
That's a beautiful thing, but 
I've been doing this a long time

911
00:49:59,600 --> 00:50:02,400
now, but almost 30 years as a 
professional investor and I've 

912
00:50:02,400 --> 00:50:05,480
never seen a cohort of people 
who are so uninterested in 

913
00:50:05,480 --> 00:50:07,640
hearing the other side of the 
story. 

914
00:50:07,920 --> 00:50:12,320
And so far I've seen them them 
prices move up 4X in there 

915
00:50:12,760 --> 00:50:15,320
against them and they still have
the same attitude. 

916
00:50:15,960 --> 00:50:19,480
Which, to your point there, it 
doesn't sound like they're very 

917
00:50:19,480 --> 00:50:22,520
incentivized to care. 
There's there's no incentive to 

918
00:50:22,520 --> 00:50:26,560
very little to none incentive to
care other than maybe you would 

919
00:50:26,560 --> 00:50:30,280
think pride. 
I don't know. 

920
00:50:30,400 --> 00:50:32,000
But it doesn't matter if they 
don't. 

921
00:50:32,080 --> 00:50:35,200
It's just not a thing. 
But we actually chuckle because 

922
00:50:35,200 --> 00:50:38,120
we if we go to if, but when we 
go to these conferences, I mean,

923
00:50:39,040 --> 00:50:43,360
you talk to them in the hallway 
or in a bar, it's as though 

924
00:50:43,360 --> 00:50:45,800
you're an adversary. 
It's very bizarre. 

925
00:50:45,840 --> 00:50:48,680
They don't have an incentive. 
They don't get it doesn't matter

926
00:50:48,680 --> 00:50:51,560
what they pay. 
So that's the bizarre thing is 

927
00:50:51,560 --> 00:50:54,280
they should want to hear what do
they care, but they don't. 

928
00:50:54,960 --> 00:50:57,680
I don't know that I'll ever see 
anything like this in my career 

929
00:50:57,680 --> 00:50:59,520
again. 
And you get so few. 

930
00:51:00,080 --> 00:51:02,960
Well, I hate to quote Buffett 
stuff because it is what it is, 

931
00:51:02,960 --> 00:51:06,080
but you know, if you had a punch
card, how many times would you 

932
00:51:06,080 --> 00:51:07,240
punch that card in your 
lifetime? 

933
00:51:07,240 --> 00:51:09,680
And investing? 
I, I don't know where I'll see 

934
00:51:09,680 --> 00:51:12,560
anything as asymmetric. 
Is this because of the 

935
00:51:12,840 --> 00:51:16,360
information asymmetry and the 
inner working? 

936
00:51:16,360 --> 00:51:19,360
It's it, I, I said, I don't know
when, but it's, it's an MBA 

937
00:51:19,360 --> 00:51:24,160
class in inefficient markets is 
what this is it the, the whole 

938
00:51:24,160 --> 00:51:31,840
uranium trade is an MBA class in
how how to find value where 

939
00:51:31,840 --> 00:51:34,920
others aren't looking and then 
at later on the whole other 

940
00:51:34,920 --> 00:51:40,400
aspect of why market structure 
and market incentives are so 

941
00:51:40,400 --> 00:51:43,400
critical to understand. 
When you say that you don't know

942
00:51:43,400 --> 00:51:47,200
if you'll find anything is 
asymmetric, are you still 

943
00:51:47,200 --> 00:51:50,000
thinking it's that asymmetric? 
Are you thinking about when you 

944
00:51:50,000 --> 00:51:52,840
first stumbled into it? 
That's a really good question. 

945
00:51:52,960 --> 00:51:56,200
I, when I started this, I would 
have thought you'd get uranium 

946
00:51:56,200 --> 00:51:59,920
prices up into the, I don't 
know, 70s somewhere and you kind

947
00:51:59,920 --> 00:52:03,480
of call it a day because in our 
modeling, I never really put 

948
00:52:03,480 --> 00:52:08,080
much growth in there. 
What I never anticipated was the

949
00:52:08,080 --> 00:52:12,480
demand that we're seeing now 
when you were listening to those

950
00:52:12,480 --> 00:52:16,880
podcasts I was doing in 2019 and
the 2018 when we really started 

951
00:52:16,880 --> 00:52:21,320
out on this, the attitude from 
the major nuclear power 

952
00:52:21,400 --> 00:52:23,960
producers in the world was 
negative. 

953
00:52:24,160 --> 00:52:28,320
So United States the largest, 
it's 20% of the electricity grid

954
00:52:28,320 --> 00:52:30,640
in the US. 
At one point it was almost 30% 

955
00:52:30,640 --> 00:52:33,920
of global nuclear power reactors
were closing. 

956
00:52:33,920 --> 00:52:36,440
Half the markets are in 
competitive markets and it was 

957
00:52:36,440 --> 00:52:40,240
challenging for them fighting 
heavily subsidized wind and 

958
00:52:40,240 --> 00:52:43,600
solar. 
So that out and the outlook was 

959
00:52:43,600 --> 00:52:47,760
more negative than positive. 
South Korea, you had just had a 

960
00:52:47,760 --> 00:52:50,560
new president come in who 
ordered all reactors under 

961
00:52:50,560 --> 00:52:53,200
construction to stop and they 
were wanted to reduce the 

962
00:52:53,200 --> 00:52:55,080
reactors and they're a major 
producer. 

963
00:52:55,600 --> 00:53:01,040
The French who derived 75% of 
their electricity from nuclear 

964
00:53:01,040 --> 00:53:05,440
power in 2018-2019, had said 
they were going to go down to 

965
00:53:05,440 --> 00:53:08,200
50%, so they were going to 
reduce their dependency on 

966
00:53:08,200 --> 00:53:10,760
nuclear. 
The Japanese were still reeling 

967
00:53:10,760 --> 00:53:15,400
from what was from the Fukushima
after after effects and there 

968
00:53:15,400 --> 00:53:18,840
were 54 reactors at the time. 
In March of 11 when Fukushima 

969
00:53:18,840 --> 00:53:21,560
went down, they shut them all 
down and they started importing 

970
00:53:21,560 --> 00:53:24,680
LNG. 
But at the time nuclear was 30% 

971
00:53:24,680 --> 00:53:28,360
of their electricity grid. 
So at that, at that time, we 

972
00:53:28,360 --> 00:53:30,680
just thought they might, they 
only had a couple running. 

973
00:53:30,680 --> 00:53:33,680
You thought maybe they might not
bring any back. 

974
00:53:33,680 --> 00:53:36,680
The UK had the same attitude. 
It was permeating. 

975
00:53:36,680 --> 00:53:39,560
So and, and I even want your 
cone in on that. 

976
00:53:39,560 --> 00:53:43,440
Fast forward to today, the 
French are not only not going to

977
00:53:43,600 --> 00:53:47,040
go to citizens from 75 to 50, 
but they're going to build like 

978
00:53:47,040 --> 00:53:51,080
14 new reactors, monster 
reactors, which is enormous. the

979
00:53:51,480 --> 00:53:56,360
US is seeing life extensions. 
the US is seeing closed reactors

980
00:53:56,360 --> 00:53:57,920
restart. 
They're got they've got 

981
00:53:57,920 --> 00:54:01,040
production tax credits. 
They're getting these deals with

982
00:54:01,040 --> 00:54:04,640
the major tech companies like 
Amazon and Microsoft. 

983
00:54:05,000 --> 00:54:07,680
It's enormous. 
The Koreans are back to building

984
00:54:07,680 --> 00:54:10,120
reactors. 
The Russians are building a lot 

985
00:54:10,120 --> 00:54:12,120
of reactors. 
That's not again, it's Russia, 

986
00:54:12,120 --> 00:54:15,960
but that's going to take Eastern
pounds and send them east just 

987
00:54:15,960 --> 00:54:21,680
every the UK, everywhere you 
look there is a rejuvenation of 

988
00:54:21,680 --> 00:54:25,880
nuclear interest and demand. 
And you know, it's not what was 

989
00:54:25,880 --> 00:54:29,880
basically no demand to barely 
any, maybe not even 1% is now 4 

990
00:54:29,880 --> 00:54:34,160
times that amount. 
And then you've got which we 

991
00:54:34,160 --> 00:54:37,760
don't even include is the small 
modular reactor demand. 

992
00:54:38,040 --> 00:54:42,200
You've got secondary demand, 
which is one of the things that 

993
00:54:42,200 --> 00:54:45,360
we didn't touch on. 
But this industry as I 

994
00:54:45,360 --> 00:54:47,560
mentioned, was driven by long 
term contracts. 

995
00:54:48,360 --> 00:54:54,160
In periods of excess supply like
occurred after Fukushima when 54

996
00:54:54,160 --> 00:54:56,040
reactors went off the grid, you 
had a backup. 

997
00:54:56,080 --> 00:55:00,880
The utilities would only 
contract at about 30, three, 

998
00:55:00,880 --> 00:55:04,920
3537% of their annual needs. 
So they would burn fuel in a 

999
00:55:04,920 --> 00:55:08,040
reactor and then only contract 
for 1/3 of that roughly. 

1000
00:55:08,680 --> 00:55:10,080
And they did that last cycle 
too. 

1001
00:55:10,080 --> 00:55:13,240
And they did that last cycle 
from like 92 to O4. 

1002
00:55:13,400 --> 00:55:17,120
They burned 3435%. 
And then all of a sudden when 

1003
00:55:17,120 --> 00:55:20,280
they decided to go back into the
market again because they were 

1004
00:55:20,280 --> 00:55:23,800
complacent and again, because 
they just, it's just how they 

1005
00:55:23,800 --> 00:55:26,160
operate. 
They, they go to extremes and 

1006
00:55:26,160 --> 00:55:30,400
they wound up purchasing some 
years 120 a 130% and more of 

1007
00:55:30,400 --> 00:55:34,120
annual requirements. 
And so when you look at that 

1008
00:55:34,120 --> 00:55:38,360
here, you Fast forward to since 
Fukushima through 2022, what 

1009
00:55:38,360 --> 00:55:41,920
were they doing? 
They were buying about 36 to 37%

1010
00:55:41,920 --> 00:55:44,360
of their annual demand, 
replacing it with contracts. 

1011
00:55:44,720 --> 00:55:47,480
Again, they've under contracted.
So there's going to be secondary

1012
00:55:47,480 --> 00:55:50,160
demand. 
So we look at this new demand 

1013
00:55:50,160 --> 00:55:55,600
coming from all of these major 
countries that heretofore had 

1014
00:55:56,000 --> 00:55:58,240
been turning negative are now 
doing a 180. 

1015
00:55:58,600 --> 00:56:02,440
You've got SMR demand coming, 
you've got extensions coming, 

1016
00:56:02,440 --> 00:56:05,360
you've got up rates, which a lot
of people don't talk about where

1017
00:56:05,360 --> 00:56:08,960
the nuclear power plant will 
increase the productivity. 

1018
00:56:08,960 --> 00:56:12,760
They spend money to increase the
output of the plant and that can

1019
00:56:12,760 --> 00:56:16,680
be very meaningful. 
That is not in people's numbers.

1020
00:56:17,120 --> 00:56:21,760
And so when we look at that 
demand profile now, the thing we

1021
00:56:21,760 --> 00:56:25,880
haven't seen because the 
utilities have been so slow to 

1022
00:56:25,880 --> 00:56:29,560
react to cover all of their 
future uranium needs. 

1023
00:56:29,560 --> 00:56:33,520
And Bill, if you think about any
mining that build a copper mine,

1024
00:56:33,520 --> 00:56:36,920
to build any mine, it could take
decades from discovery, from the

1025
00:56:37,120 --> 00:56:40,160
exploration to discovery to 
permitting the licensing, the 

1026
00:56:40,160 --> 00:56:42,160
building and financing and all 
that stuff. 

1027
00:56:42,560 --> 00:56:45,640
And uranium is no different. 
Nuclear uranium mines take 

1028
00:56:46,040 --> 00:56:52,600
decades in many cases. 
And so in mining world, seven 

1029
00:56:52,600 --> 00:56:58,280
years, five years is tomorrow. 
And so in the case of uranium, 

1030
00:56:58,280 --> 00:57:02,160
when you look just out to 2030, 
we could look to 20402050, who 

1031
00:57:02,160 --> 00:57:03,840
knows, right. 
A lot can happen in there. 

1032
00:57:03,840 --> 00:57:07,640
But let me just look out 6-7 
years from now depending on a 

1033
00:57:07,640 --> 00:57:11,760
few different variables. 
But anywhere from 20 to 25% of 

1034
00:57:11,760 --> 00:57:17,720
the supply that is needed for 
the demand in that year 2030 

1035
00:57:17,760 --> 00:57:20,120
doesn't yet exist in the form of
a mine. 

1036
00:57:20,680 --> 00:57:25,280
So there are identified 
projects, they're going through 

1037
00:57:25,280 --> 00:57:28,600
the licensing and permitting 
phase, but they're not mines and

1038
00:57:28,600 --> 00:57:30,840
building stuff happens all the 
time. 

1039
00:57:31,240 --> 00:57:35,960
And so when you look at that, 
it's very, very significant as 

1040
00:57:35,960 --> 00:57:38,920
to what's out there that needs 
to be built. 

1041
00:57:39,480 --> 00:57:43,680
Another 5 to 8% can come from 
existing projects that are on 

1042
00:57:43,680 --> 00:57:48,320
care and maintenance. 
So you've not because it because

1043
00:57:48,320 --> 00:57:52,120
the utilities we're still 
disbelieving they haven't 

1044
00:57:52,120 --> 00:57:55,040
committed enough long term 
pounds under contract. 

1045
00:57:55,040 --> 00:57:57,960
If we did go 2040, it's the 
number that's in my head. 

1046
00:57:58,360 --> 00:58:03,000
I think the number is about 2.2 
to £2.4 billion and again 

1047
00:58:03,000 --> 00:58:08,440
roughly by our math today 210, 
twenty £30 million per year of 

1048
00:58:08,440 --> 00:58:12,720
consumption, but there's over £2
billion it's not contracted for.

1049
00:58:13,080 --> 00:58:15,320
So those are called uncovered 
requirements. 

1050
00:58:15,840 --> 00:58:22,320
So the utilities are facing a 
significant delivery waterfall 

1051
00:58:22,320 --> 00:58:24,720
expiry. 
So all the old contracts they 

1052
00:58:24,720 --> 00:58:29,760
signed are starting to fall off 
a Cliff right now into a period 

1053
00:58:29,760 --> 00:58:33,640
where they need to start 
contracting for a demand profile

1054
00:58:33,840 --> 00:58:38,080
they as a cohort globally did 
not anticipate. 

1055
00:58:38,800 --> 00:58:44,040
Normally in these cycles, you 
don't see demand moving that 

1056
00:58:44,040 --> 00:58:46,480
much. 
So they may have been slow in 

1057
00:58:46,480 --> 00:58:49,280
the last cycle. 
In the last cycle they were 

1058
00:58:49,560 --> 00:58:54,480
contracting at at 3435% from 92 
to O four. 

1059
00:58:54,480 --> 00:58:58,640
And then they went up to 110. 
Twenty, 30% of annual needs and 

1060
00:58:58,640 --> 00:59:01,200
they contracted for because 
inventories were down. 

1061
00:59:01,560 --> 00:59:05,440
But that demand profile then was
not gangbusters. 

1062
00:59:05,440 --> 00:59:11,320
It was meh, low single digits. 
Now all of a sudden they've had 

1063
00:59:11,320 --> 00:59:15,560
the same complacency except 
there at in the last cycle. 

1064
00:59:15,560 --> 00:59:19,040
By the way I should add when the
contracting started in mass in 

1065
00:59:19,040 --> 00:59:23,800
O5, when you looked out to the 
future over a six year period, 

1066
00:59:24,320 --> 00:59:28,520
there was a couple £100 million 
of surplus in the market and 

1067
00:59:28,520 --> 00:59:32,560
when they started contracting 
prices went parabolic. 

1068
00:59:33,040 --> 00:59:37,720
Fast forward to today, even by 
the industry forecasters who we 

1069
00:59:38,120 --> 00:59:41,600
vehemently disagree with and 
think they're dramatically 

1070
00:59:42,000 --> 00:59:45,320
understating their real supply 
demand numbers just because 

1071
00:59:45,320 --> 00:59:49,120
their own analytics not for any 
other purpose they would they 

1072
00:59:49,120 --> 00:59:53,760
show deficits. 
And so when we look at you 

1073
00:59:53,760 --> 00:59:57,400
asked, even after the price 
move, do I still feel I feel the

1074
00:59:57,400 --> 01:00:02,440
asymmetry is is as good, if not 
better likely, but because. 

1075
01:00:02,920 --> 01:00:06,080
The demand side of the equation 
has moved up so much and these 

1076
01:00:06,080 --> 01:00:08,600
are once these things get in 
motion, they stay in motion. 

1077
01:00:08,600 --> 01:00:10,880
Once once things are in 
construction, they stay in 

1078
01:00:10,880 --> 01:00:13,000
construction. 
So yeah, it does. 

1079
01:00:13,000 --> 01:00:14,520
It feels good. 
Now, that doesn't mean they're 

1080
01:00:14,720 --> 01:00:18,400
with it though, Like I said, 
brings more interest, brings 

1081
01:00:18,400 --> 01:00:21,160
more people who bring their own 
investing playbook to it. 

1082
01:00:21,160 --> 01:00:24,760
And when they're coming in and 
you've got big funds coming in 

1083
01:00:24,760 --> 01:00:27,120
with large amounts of capital 
and that they think they're 

1084
01:00:27,120 --> 01:00:30,320
looking at copper or gold. 
And, and again, remember, a lot 

1085
01:00:30,320 --> 01:00:35,280
of at least Western US, I'll say
investors, they don't look at 

1086
01:00:35,280 --> 01:00:40,280
commodities almost ever, right? 
But now they see this commodity 

1087
01:00:40,280 --> 01:00:43,200
is working and they're coming 
into it it and they look at it 

1088
01:00:43,200 --> 01:00:45,880
like they, they treat it like 
their tech data, like their data

1089
01:00:45,880 --> 01:00:47,360
points looking at a tech 
company. 

1090
01:00:47,640 --> 01:00:50,800
And you know, we hear what's 
important to them and we just 

1091
01:00:50,800 --> 01:00:53,600
think that, you know that that's
not the play. 

1092
01:00:53,840 --> 01:00:57,920
And so, so there will be some 
increased volatility with it. 

1093
01:00:57,920 --> 01:01:02,880
But when I I look at the amount 
of uncovered requirements, those

1094
01:01:02,880 --> 01:01:06,960
that are not contracted for, I 
look at the precarious nature of

1095
01:01:06,960 --> 01:01:13,000
mine supply one here's another 
point Bill is 65% of all pounds 

1096
01:01:13,000 --> 01:01:17,840
of uranium produced are produced
in the East and almost 70% of 

1097
01:01:17,840 --> 01:01:20,080
pounds consumed or consumed in 
the West. 

1098
01:01:20,920 --> 01:01:25,760
And in that, one of the things 
that the people have brought 

1099
01:01:25,800 --> 01:01:31,360
with their assumptions is that 
Kazakhstan, they produce 41% of 

1100
01:01:31,360 --> 01:01:35,440
global uranium and they're 20% 
owned by the public and that was

1101
01:01:35,440 --> 01:01:38,640
floated in 2019. 
The rest is owned by the state, 

1102
01:01:38,640 --> 01:01:43,480
by the sovereign wealth fund. 
And everyone assumes that 

1103
01:01:43,480 --> 01:01:47,280
Khazaram Prom, which is the name
of the company, when they came 

1104
01:01:47,720 --> 01:01:51,640
public their pat, their cost to 
produce a pound of uranium was 

1105
01:01:51,640 --> 01:01:55,960
something like $14.00 per pound 
on an all in sustaining cost 

1106
01:01:55,960 --> 01:01:59,080
basis. 
So cash cost plus other expenses

1107
01:01:59,080 --> 01:02:02,760
to run the company and other 
items about 14 bucks a pound. 

1108
01:02:02,760 --> 01:02:05,840
And and you recall I said 
earlier, the average cost to 

1109
01:02:05,840 --> 01:02:10,480
produce is in the mid 50s. 
So, so the prevailing wisdom 

1110
01:02:10,480 --> 01:02:13,120
would be, well, the Kozaks are 
the low cost producer. 

1111
01:02:13,120 --> 01:02:16,320
They could just pound supply 
into the market and they're the 

1112
01:02:16,320 --> 01:02:19,120
largest producer and they're 
just a spigot that's always 

1113
01:02:19,120 --> 01:02:21,000
going to get turned on. 
And those are what all the real 

1114
01:02:21,000 --> 01:02:23,680
sharp folks who go to idea 
dinners, we'll talk about. 

1115
01:02:23,680 --> 01:02:27,520
We hear that all the time and I 
tell the sharp folks they should

1116
01:02:27,520 --> 01:02:30,400
go back and sharpen their 
pencils a little bit because if 

1117
01:02:30,400 --> 01:02:34,160
you actually did the work on 
Cazada Prom, what you would see 

1118
01:02:34,160 --> 01:02:38,800
is that the state owned producer
in Kazakhstan does produce a lot

1119
01:02:38,800 --> 01:02:42,400
of uranium. 
They also cost in tangay and 

1120
01:02:42,400 --> 01:02:46,840
they sell in dollars. 
And so in around 20/12/2013 time

1121
01:02:46,840 --> 01:02:51,080
period, the tangay was in the 75
to 85 tangay to the dollar 

1122
01:02:51,080 --> 01:02:54,320
range. 
They devalued the currency and 

1123
01:02:54,320 --> 01:02:57,880
let it float against the dollar.
And so by the time And so when 

1124
01:02:57,880 --> 01:03:01,720
if you were to look back back 
then before the company was 

1125
01:03:01,720 --> 01:03:04,360
public, they had debt. 
And so they did have annual 

1126
01:03:04,360 --> 01:03:08,640
reports and if you were studying
like we did in in 16 and 17, 

1127
01:03:08,640 --> 01:03:11,560
went back and found those. 
One of the things we noticed is 

1128
01:03:11,560 --> 01:03:15,440
wow producing in the high 20s 
and mid 30s and then all of a 

1129
01:03:15,440 --> 01:03:18,360
sudden as you start to get to 
the devaluation and the 10 gig 

1130
01:03:18,360 --> 01:03:21,960
goes from 75 to 8010 gig to 300 
and 4010 gig. 

1131
01:03:22,760 --> 01:03:26,200
All of a sudden you start to 
realize that hey, wait a second,

1132
01:03:26,400 --> 01:03:30,160
this is really an FX play to an 
extent yes, they produce thing 

1133
01:03:30,600 --> 01:03:35,120
yes, produce a lot of uranium. 
So now you Fast forward to so, 

1134
01:03:35,240 --> 01:03:39,720
so that that could they produce?
Yeah, Well, in 2017 they were 

1135
01:03:39,720 --> 01:03:42,560
the first to cut production and 
they said, well, we're cutting 

1136
01:03:42,560 --> 01:03:44,520
production. 
We don't like the prices and we 

1137
01:03:44,880 --> 01:03:48,280
we're taking a value over volume
strategy, which would be a 

1138
01:03:48,280 --> 01:03:51,120
departure from Eastern 
philosophy, right? 

1139
01:03:51,120 --> 01:03:52,720
The Russians just pounded out 
there. 

1140
01:03:53,280 --> 01:03:57,360
And so that was a departure. 
So they were disciplined in 18 

1141
01:03:57,360 --> 01:03:59,920
and 19. 
And in Kazakhstan they produce 

1142
01:03:59,920 --> 01:04:02,080
under what's called subsoil use 
agreements. 

1143
01:04:02,080 --> 01:04:05,160
Those are agreements between the
entity, the minor and the state 

1144
01:04:05,160 --> 01:04:07,680
as to how much you can produce 
and you to produce plus or minus

1145
01:04:07,680 --> 01:04:12,360
those agreed upon numbers, 20%. 
And if you go on either side of 

1146
01:04:12,360 --> 01:04:14,440
that, you have to go back to the
state and ask for approval. 

1147
01:04:14,440 --> 01:04:19,440
So in 2018 they cut, 2017, they 
cut production 20%, 2018 20%, 

1148
01:04:19,440 --> 01:04:22,680
2019 20%. 
Then COVID came along and it's 

1149
01:04:22,680 --> 01:04:24,880
been 20% below. 
And everyone keeps saying, well,

1150
01:04:24,880 --> 01:04:26,120
they're going to turn the 
spigots on. 

1151
01:04:26,120 --> 01:04:27,360
They're going to turn the 
spigots on. 

1152
01:04:27,360 --> 01:04:29,320
And when they do, here comes a 
flood of uranium. 

1153
01:04:30,000 --> 01:04:34,480
And our view has been actually, 
no, no, actually the Kazakh 

1154
01:04:34,560 --> 01:04:38,360
uranium is challenged. 
It's a vast reserve. 

1155
01:04:38,360 --> 01:04:41,360
There's significant reserves. 
A lot of it was mined. 

1156
01:04:41,360 --> 01:04:45,480
They came out of nowhere in in 
2000, in 2005. 

1157
01:04:45,480 --> 01:04:49,000
If you look forward in 2015, 
they were supposed to go from 

1158
01:04:49,000 --> 01:04:51,680
9,000,000 lbs of production to 
£21 million. 

1159
01:04:51,960 --> 01:04:55,960
By the time you got to 2015, 
they were producing £56 million.

1160
01:04:56,240 --> 01:04:58,360
That's in the ballpark of what 
they produce today. 

1161
01:04:59,360 --> 01:05:02,760
And a lot of as most miners do, 
they take the good stuff first, 

1162
01:05:02,960 --> 01:05:04,240
right? 
And they leave the harder stuff 

1163
01:05:04,240 --> 01:05:07,280
behind. 
But as we've gone forward, the 

1164
01:05:07,400 --> 01:05:09,800
the reason you see a lot of this
discipline, they have a hard 

1165
01:05:09,800 --> 01:05:13,280
time getting supply. 
They have a lot of getting acid 

1166
01:05:13,280 --> 01:05:15,920
to do it. 
They're having a mere host of 

1167
01:05:15,920 --> 01:05:20,840
issues or not to mention that 
Russia is in their backyard and 

1168
01:05:20,840 --> 01:05:24,520
puts pressure on them as to 
where supply is going to go. 

1169
01:05:24,840 --> 01:05:30,800
But when they just recently gave
guidance for 2025, production is

1170
01:05:30,800 --> 01:05:33,760
down 17% versus the subsoil use 
agreement. 

1171
01:05:33,760 --> 01:05:36,160
And people thought that that 
would start to get closer. 

1172
01:05:36,640 --> 01:05:39,480
But what you really see is the 
cost to produce a pound of 

1173
01:05:39,480 --> 01:05:44,240
uranium is now around going to 
be guided to $28.00 a pound. 

1174
01:05:44,800 --> 01:05:48,840
So when they came public, their 
costs were mid teens and they 

1175
01:05:48,840 --> 01:05:51,640
were if you looked at what they 
were projecting out by 

1176
01:05:51,640 --> 01:05:57,200
2024-2025, they were low teens. 
Well they're not low teens. 

1177
01:05:57,520 --> 01:05:59,800
They're guiding to $28.00 a 
pound. 

1178
01:06:00,160 --> 01:06:03,800
And if you currency adjust, 
because the tenge has gone from 

1179
01:06:03,800 --> 01:06:08,720
3:40 when they came public in 
2019 to 480 now, that's really 

1180
01:06:08,720 --> 01:06:14,200
like 38 bucks a pound. 
And so rule of thumb, heuristic 

1181
01:06:14,280 --> 01:06:16,560
investor, institutional 
investor. 

1182
01:06:16,560 --> 01:06:19,000
Well, the Kazakhs are their 
state owned producer, largest in

1183
01:06:19,000 --> 01:06:21,080
the world. 
They're just going to keep 

1184
01:06:21,080 --> 01:06:24,960
sending low cost pounds. 
Reality of those pounds are 2 

1185
01:06:24,960 --> 01:06:28,000
1/2 times what they thought they
would cost. 

1186
01:06:28,280 --> 01:06:30,960
It's more expensive to produce. 
They're not producing as much. 

1187
01:06:31,320 --> 01:06:34,360
And with these geopolitical 
winds, you're seeing a lot of 

1188
01:06:34,360 --> 01:06:37,320
without getting into great 
detail, you're seeing a lot of 

1189
01:06:37,840 --> 01:06:41,640
the influence, the Russian 
influence in Kazakhstan move 

1190
01:06:42,200 --> 01:06:46,320
that those pounds very likely to
head east, not West and the West

1191
01:06:46,440 --> 01:06:48,640
and, and, and some of the 
western utilities need it. 

1192
01:06:49,120 --> 01:06:52,320
So that's another factor that's 
out there that's hanging over 

1193
01:06:52,320 --> 01:06:54,840
the market. 
And I'm not sure that that as as

1194
01:06:55,320 --> 01:06:57,720
odd as it may sound, I'm not 
sure that's fully appreciated. 

1195
01:06:58,320 --> 01:07:00,240
That's interesting. 
I mean. 

1196
01:07:00,280 --> 01:07:03,400
When I think back to what you 
were talking about, when you've 

1197
01:07:03,400 --> 01:07:06,200
got the potential, I guess the 
narrative in the market was the 

1198
01:07:06,200 --> 01:07:11,240
overhang from Russia using some 
of their nukes to to what 

1199
01:07:11,280 --> 01:07:13,800
unenrich D enrich. 
How do I how do I don't know 

1200
01:07:13,800 --> 01:07:16,120
what it is, but they were 
basically like using surplus 

1201
01:07:16,120 --> 01:07:20,640
uranium from the nukes and there
was just a lot of I mean, when I

1202
01:07:20,640 --> 01:07:21,920
thought about it, I just said 
this. 

1203
01:07:21,920 --> 01:07:25,880
This would like require truly 
dedicating my life to getting 

1204
01:07:25,880 --> 01:07:28,880
through the opacity here. 
Well, so they did, and it sounds

1205
01:07:28,880 --> 01:07:30,560
like it's true it. 
Remains true. 

1206
01:07:30,800 --> 01:07:33,200
Yeah, it's a good point. 
The opacity is still there. 

1207
01:07:33,200 --> 01:07:36,360
As to to that nukes thing that's
called a megatons to megawatts 

1208
01:07:36,360 --> 01:07:41,840
intro from after the wall fell 
in Berlin and Russia and USSR 

1209
01:07:41,840 --> 01:07:44,840
went away, the US was concerned 
that a lot of those nuclear 

1210
01:07:44,840 --> 01:07:47,400
warheads would wind up in in bad
actors hands. 

1211
01:07:47,400 --> 01:07:53,920
So they had an agreement now in 
from 93 to 2013 to down blend a 

1212
01:07:53,920 --> 01:07:58,840
number of 1600 nuclear reactors.
Take the highly enriched 

1213
01:07:58,840 --> 01:08:03,000
uranium, which is a nuclear 
warhead and and down blend it to

1214
01:08:03,000 --> 01:08:08,040
low enriched, which is what you 
use for reactors. 1 is 90% for 

1215
01:08:08,040 --> 01:08:12,240
bombs and the other is 3 to 5% 
for reactors and take that and 

1216
01:08:12,240 --> 01:08:15,040
it's a very expensive and 
complicated process to down 

1217
01:08:15,040 --> 01:08:16,439
blend it and then you could use 
it. 

1218
01:08:16,439 --> 01:08:20,439
And that was a way the Americans
could pay the Russians to not be

1219
01:08:20,439 --> 01:08:22,960
bad actor, to not send, to sell 
it to bad actors. 

1220
01:08:23,520 --> 01:08:26,720
And that existed. 
And that created an additional 

1221
01:08:26,720 --> 01:08:29,040
£20 million of supply into the 
market. 

1222
01:08:29,040 --> 01:08:32,720
Now again, for context, at that 
time, during that time period, 

1223
01:08:32,720 --> 01:08:36,279
you were probably looking at 
£170 million of demand into the 

1224
01:08:36,560 --> 01:08:39,279
US. 
It was 50, so the US lot of 

1225
01:08:39,279 --> 01:08:41,399
incremental pounds. 
Exactly. 

1226
01:08:41,439 --> 01:08:45,160
And and that's gone away now. 
And the opportunity might exist 

1227
01:08:45,160 --> 01:08:48,800
down the road for some warheads 
to be used for these new 

1228
01:08:48,800 --> 01:08:51,760
advanced reactors. 
If there's a shortage of low 

1229
01:08:51,760 --> 01:08:54,960
enriched capacity, they might be
able to to use it. 

1230
01:08:54,960 --> 01:08:57,560
But you're talking to a 
miniscule amount which would be 

1231
01:08:57,680 --> 01:09:02,200
wanted for those SMRS which is a
mid twenty 30s type thing down 

1232
01:09:02,200 --> 01:09:05,560
the road. 
So that that's a good thing from

1233
01:09:05,600 --> 01:09:08,319
the potential for available 
demand, although it probably 

1234
01:09:08,319 --> 01:09:11,520
would very unlikely happen 
because you can't, it would be 

1235
01:09:12,560 --> 01:09:14,560
the availability. 
But it could it be out there, 

1236
01:09:14,560 --> 01:09:16,880
Yeah. 
Could it help advance SMRS? 

1237
01:09:16,880 --> 01:09:19,319
It it might be able to. 
We don't factor that in. 

1238
01:09:19,319 --> 01:09:21,000
It could that would be a good 
thing. 

1239
01:09:21,240 --> 01:09:25,439
But yeah, so there was a lot of 
the SMRS use, I should say the 

1240
01:09:25,439 --> 01:09:29,160
SMRS use high, high assay 
enriched uranium. 

1241
01:09:29,160 --> 01:09:34,439
So it's a 20% enrichment level 
versus the three to 4% 

1242
01:09:34,520 --> 01:09:36,279
enrichment level. 
So you don't have to down blend 

1243
01:09:36,279 --> 01:09:38,120
it as much. 
But the SMR? 

1244
01:09:38,120 --> 01:09:40,840
How long does an SMR take to get
sort of from? 

1245
01:09:41,399 --> 01:09:46,120
Conception to implementation 
conception a long time decade. 

1246
01:09:46,120 --> 01:09:50,560
A while, but in terms of the 
features to an SMR, and I am not

1247
01:09:50,560 --> 01:09:54,240
an expert on SMRS, but the big 
reactors in the West, big 

1248
01:09:54,240 --> 01:09:57,480
reactors have been a problem 
because they're customized. 

1249
01:09:57,480 --> 01:10:02,000
Every reactor is, even though 
it's a model, it's built on site

1250
01:10:02,240 --> 01:10:05,880
and so there's variability in 
the construction and delays and 

1251
01:10:05,920 --> 01:10:09,760
cost overruns. 
It was the last big one in 

1252
01:10:09,760 --> 01:10:11,520
Georgia. 
Yeah, exactly. 

1253
01:10:11,560 --> 01:10:13,040
Yeah, and that thing was a mess,
right? 

1254
01:10:13,040 --> 01:10:16,680
From an overrun standpoint. 
For years and years and years. 

1255
01:10:17,000 --> 01:10:21,240
And immense amount of billions 
overruns because they're each 

1256
01:10:21,240 --> 01:10:24,480
one is custom. 
Well, the the SMRS are built in 

1257
01:10:24,480 --> 01:10:27,520
a factory and so it makes it 
standardized and you can have 

1258
01:10:27,520 --> 01:10:29,920
standardized supply chain. 
So interesting. 

1259
01:10:29,920 --> 01:10:32,960
Yeah. 
So, so that is in the future 

1260
01:10:32,960 --> 01:10:35,480
though we we put very, even 
though you could have that 

1261
01:10:35,480 --> 01:10:38,280
demand, we in our modeling, we 
put very, very, very little 

1262
01:10:38,280 --> 01:10:40,160
demand for it. 
So did the reason. 

1263
01:10:40,160 --> 01:10:43,560
I find it intriguing and. 
And this is obviously no longer 

1264
01:10:43,560 --> 01:10:46,520
like a secret because of what 
Microsoft just announced. 

1265
01:10:46,520 --> 01:10:51,360
But I have been racking my brain
to figure out how we can have 

1266
01:10:51,480 --> 01:10:59,680
the forecasted energy demand 
usage of AI and also pursue a 

1267
01:10:59,680 --> 01:11:03,920
green solution to energy. 
And the only answer in my head 

1268
01:11:03,920 --> 01:11:08,440
has been nuclear because I just 
don't I unless I guess battery 

1269
01:11:08,440 --> 01:11:11,480
storage just gets so much better
but it just doesn't seem 

1270
01:11:11,480 --> 01:11:13,280
possible to me. 
Exactly. 

1271
01:11:13,280 --> 01:11:17,560
Nuclear is a very elegant. 
Existing simple it sounds it 

1272
01:11:17,560 --> 01:11:20,600
sounds hot, but it's a simple 
solution right it's when you 

1273
01:11:20,600 --> 01:11:23,760
look at it on us from a safety 
standpoint per terawatt hour 

1274
01:11:23,760 --> 01:11:27,440
it's the safest in the world 
Well, you know what's wild Mike 

1275
01:11:27,440 --> 01:11:30,200
is the the. 
Reaction to Fukushima. 

1276
01:11:30,760 --> 01:11:34,040
And I mean, unless my research 
is wrong, which is it's very 

1277
01:11:34,040 --> 01:11:37,800
possible, but I don't think that
there was maybe like one or two 

1278
01:11:37,800 --> 01:11:43,280
direct deaths attributable to 
the health consequences. 

1279
01:11:43,280 --> 01:11:45,520
And like, didn't one person just
recently die? 

1280
01:11:45,520 --> 01:11:49,520
But like the the deaths were all
related to the earthquake and 

1281
01:11:49,520 --> 01:11:51,280
the tsunami, which was a 
tragedy. 

1282
01:11:51,760 --> 01:11:54,200
But that's not a nuclear reactor
issue. 

1283
01:11:54,200 --> 01:11:56,440
That's a nature issue. 
Exactly. 

1284
01:11:56,520 --> 01:12:00,280
Yes, that's exactly right. 
And it gets, I don't want to 

1285
01:12:00,280 --> 01:12:02,920
trivialize the deaths of the 
people at the plant. 

1286
01:12:02,920 --> 01:12:06,680
That's terrible for them. 
But yeah, so when you look at it

1287
01:12:06,680 --> 01:12:11,800
over the the the data over 
decades now, it is a very safe 

1288
01:12:11,800 --> 01:12:14,960
form electricity generation. 
And I think the Microsoft deal 

1289
01:12:15,040 --> 01:12:17,840
of like I said earlier in the 
beginning of all reactors, right

1290
01:12:17,840 --> 01:12:21,560
Three Mile Island, which has 
this stigma attached to it that 

1291
01:12:21,560 --> 01:12:24,080
was operator error. 
And here they are bring the 

1292
01:12:24,080 --> 01:12:26,640
plant pack online. 
So it's a really a nice ringing 

1293
01:12:26,640 --> 01:12:29,040
endorsement from a major tech 
company. 

1294
01:12:29,240 --> 01:12:31,560
I'll tell you as a as a person 
who. 

1295
01:12:31,560 --> 01:12:34,360
Roots for capitalism. 
It was pretty nice to see that 

1296
01:12:34,360 --> 01:12:37,680
headline too, because it would 
be there would be a beautiful 

1297
01:12:37,680 --> 01:12:41,520
thing about the biggest tech 
companies in America solving the

1298
01:12:41,520 --> 01:12:45,080
green energy crisis through 
capitalism that is now come I 

1299
01:12:45,080 --> 01:12:47,800
root for well. 
So it's a great .1 of the 

1300
01:12:47,840 --> 01:12:51,440
things. 
That I've noticed with it's such

1301
01:12:51,440 --> 01:12:55,600
a great point with the fuel 
buyers is always waiting for the

1302
01:12:55,600 --> 01:12:59,720
government to come in in one way
shape or another, always hoping 

1303
01:13:00,360 --> 01:13:03,560
on all different for all 
different facets versus letting 

1304
01:13:03,560 --> 01:13:06,360
the market solve it. 
And here I to to your point, 

1305
01:13:06,360 --> 01:13:10,320
you're seeing the market solve 
like this with Amazon at the 

1306
01:13:10,320 --> 01:13:13,760
Susquehanna and and then and 
this with the Microsoft three 

1307
01:13:13,760 --> 01:13:17,160
mile Island. 
I mean, the just just 

1308
01:13:17,680 --> 01:13:20,480
Constellation stock was up 20% 
on the news Friday. 

1309
01:13:20,480 --> 01:13:23,920
The markets are telling them 
it's OK, go out and build more 

1310
01:13:23,920 --> 01:13:27,000
reactors, go out and do these 
are good things to happen. 

1311
01:13:27,520 --> 01:13:30,560
And so it's funny how the free 
market can solve for a lot of 

1312
01:13:30,560 --> 01:13:32,400
things. 
It will be interesting to see 

1313
01:13:32,400 --> 01:13:34,680
because that that's not how fuel
buyers think. 

1314
01:13:35,800 --> 01:13:37,080
Yeah, I don't. 
I don't know that it's how the 

1315
01:13:37,080 --> 01:13:39,600
people in our government. 
Want to think either and that's 

1316
01:13:39,600 --> 01:13:44,040
why I'm really rooting for it to
be to be a real not, not what 

1317
01:13:44,040 --> 01:13:47,680
bottom up solution and it would 
be, I'm rooting for it. 

1318
01:13:47,720 --> 01:13:51,880
It would be awesome. 
So we'll see. 

1319
01:13:52,000 --> 01:13:56,480
Have you? 
Changed your views on the 

1320
01:13:57,000 --> 01:14:00,800
incremental power generation 
from renewables. 

1321
01:14:00,800 --> 01:14:05,240
Now that it's something that you
followed for six years or so, I 

1322
01:14:05,240 --> 01:14:07,720
got to imagine that you're 
looking at a tangentially, 

1323
01:14:07,720 --> 01:14:10,640
right? 
I think there's a great. 

1324
01:14:10,640 --> 01:14:14,920
Role for it and I think there's 
a nice growth profile to it just

1325
01:14:14,920 --> 01:14:19,640
like similar like I think about 
I think about EVs right it seems

1326
01:14:19,640 --> 01:14:23,760
people like to frame debates 
it's all or nothing and those 

1327
01:14:23,760 --> 01:14:25,400
are those rules of thumb right 
it's. 

1328
01:14:25,960 --> 01:14:28,640
It's a lot easier to live that 
way than to have the nuance in 

1329
01:14:28,640 --> 01:14:31,360
the conversation, like you look 
at platinum group metals. 

1330
01:14:31,360 --> 01:14:34,600
Palladium and platinum catalyst 
for catalytic converters, right?

1331
01:14:34,640 --> 01:14:38,800
Well, the PGMS, the commodities 
been shot, the miners have been 

1332
01:14:38,800 --> 01:14:40,480
shot. 
The people in the service, 

1333
01:14:40,480 --> 01:14:43,000
there's some people who recycle 
it, their stocks have been shot 

1334
01:14:43,560 --> 01:14:45,080
because EVs were going to save 
the day. 

1335
01:14:45,080 --> 01:14:47,760
And then, well, now EV growth 
has gone from, I don't know, 50,

1336
01:14:47,760 --> 01:14:50,640
sixty, 70% down to 10%, whatever
it might be. 

1337
01:14:50,640 --> 01:14:54,400
Every day you see, it seems you 
see a new car company or truck 

1338
01:14:54,400 --> 01:14:57,160
company saying they're going to 
slow down a little. 

1339
01:14:57,160 --> 01:14:59,760
So then it right. 
That doesn't mean EVs are not 

1340
01:14:59,760 --> 01:15:01,880
going to be there. 
They'll be there maybe a slower 

1341
01:15:01,880 --> 01:15:03,760
pace and markets will adjust to 
that. 

1342
01:15:04,040 --> 01:15:06,480
Same thing with wind and solar. 
I think they're, they serve a 

1343
01:15:06,480 --> 01:15:09,080
really great purpose in certain 
parts of the world and I think 

1344
01:15:09,080 --> 01:15:11,240
there will be a reasonable 
growth rate to it. 

1345
01:15:11,600 --> 01:15:14,400
So, but again, they it's all for
nothing. 

1346
01:15:14,400 --> 01:15:17,720
It seems that people think. 
So we haven't gone down that 

1347
01:15:17,720 --> 01:15:19,360
road from an investment 
standpoint. 

1348
01:15:19,440 --> 01:15:23,080
Our focus is on on that portion 
of it has been uranium. 

1349
01:15:23,080 --> 01:15:26,320
But it often like there's three 
sides to every story, right? 

1350
01:15:26,320 --> 01:15:28,120
Your side, their side and the 
truth. 

1351
01:15:28,200 --> 01:15:31,560
And it's, it seems like that's 
the way with these industries 

1352
01:15:31,560 --> 01:15:34,120
that there's bulls and bears and
the truth lies somewhere in 

1353
01:15:34,120 --> 01:15:36,920
between. 
Yeah, the EV thing I think is 

1354
01:15:36,920 --> 01:15:40,400
really interesting because the. 
Growth has slowed or or even 

1355
01:15:40,400 --> 01:15:44,880
gone negative, but it's like, 
OK, well give me a large 

1356
01:15:44,880 --> 01:15:49,560
purchase consumer discretionary 
funded by debt asset class that 

1357
01:15:49,600 --> 01:15:52,840
has grown over the last two 
years like you can't find it 

1358
01:15:53,040 --> 01:15:55,320
right, right. 
So you know how much of. 

1359
01:15:55,320 --> 01:15:58,200
This is. 
Interest rates versus the more I

1360
01:15:58,200 --> 01:16:00,160
don't know it's, it's, it's 
going to be interesting to look 

1361
01:16:00,160 --> 01:16:02,480
back 3-4 years and see what 
happened. 

1362
01:16:03,000 --> 01:16:04,640
It is. 
That's why we've been just 

1363
01:16:04,640 --> 01:16:07,080
sniffing just. 
Trying to explore the PGM side 

1364
01:16:07,080 --> 01:16:10,120
of things it I see a lot of 
similarities to uranium in a 

1365
01:16:10,120 --> 01:16:15,480
sense where you've got a a 
market that is, you know, you've

1366
01:16:15,480 --> 01:16:19,600
got the major producers in PGM's
it's Russia and South Africa and

1367
01:16:19,600 --> 01:16:21,800
uranium. 
We've got Kazakhstan as a major 

1368
01:16:21,800 --> 01:16:26,320
producer, but the Russians, it's
one's one's persona non grata to

1369
01:16:26,320 --> 01:16:30,240
the West and South Africa is 
very challenged state to produce

1370
01:16:30,240 --> 01:16:32,480
in. 
So you got real price risk all 

1371
01:16:32,480 --> 01:16:36,320
the time in there. 
You've got a technology where 

1372
01:16:36,600 --> 01:16:40,320
people just assume that the ice 
engine is going away of the dodo

1373
01:16:40,320 --> 01:16:44,160
bird and so they just ready 
fire, aim and shoot anything 

1374
01:16:44,160 --> 01:16:47,280
associated with that. 
Just like you had people thought

1375
01:16:47,280 --> 01:16:50,080
nuclear technology, nuclear 
power was going away of the dodo

1376
01:16:50,080 --> 01:16:54,200
bird just six years ago. 
And the truth is neither is 

1377
01:16:54,200 --> 01:16:57,640
happening, right. 
As these EV platforms slow, 

1378
01:16:58,040 --> 01:17:00,400
well, the ICE engines are 
hanging in there. 

1379
01:17:00,560 --> 01:17:04,240
And so it's just finding that 
price where they can. 

1380
01:17:04,240 --> 01:17:07,560
There's an economic incentive to
produce and the companies can 

1381
01:17:08,280 --> 01:17:10,280
bat. 
So there are similarities there.

1382
01:17:10,280 --> 01:17:13,280
And I So from that standpoint, 
we do sniff around the PGM 

1383
01:17:13,280 --> 01:17:16,680
space. 
Yeah, more cyclicals. 

1384
01:17:16,760 --> 01:17:18,720
Did did somebody hurt you when 
you were a child? 

1385
01:17:19,720 --> 01:17:22,960
Pretty much I. 
Think I'll tell you what I know 

1386
01:17:23,000 --> 01:17:25,440
the the secular stuff I find 
kind of boring. 

1387
01:17:25,600 --> 01:17:29,560
So and I think, you know, it's a
really good point you bring up 

1388
01:17:29,560 --> 01:17:32,280
though, but I think investing 
you've got to do what your 

1389
01:17:32,280 --> 01:17:35,720
personality is, right? 
And then what I learned early in

1390
01:17:35,720 --> 01:17:38,560
my career was being a contrarian
for the sake of being a 

1391
01:17:38,560 --> 01:17:41,320
contrarian is a way to get your 
head handed to you, right? 

1392
01:17:41,800 --> 01:17:46,280
It's OK to question things, but 
you have to, you can't just be 

1393
01:17:46,280 --> 01:17:47,920
contrarian. 
And so there's a lot of things 

1394
01:17:47,920 --> 01:17:49,760
that over the years you look at 
and you say, you know what, I 

1395
01:17:49,760 --> 01:17:52,360
could see where I might be 
right, but there's enough 

1396
01:17:52,360 --> 01:17:55,400
evidence proving showing that 
I'm not it's time to move on. 

1397
01:17:55,680 --> 01:17:57,840
And I look for that every day in
nuclear and I can't find it. 

1398
01:17:59,240 --> 01:18:02,040
What would you if you had 
parting advice? 

1399
01:18:02,040 --> 01:18:08,360
To let's say younger analyst, I 
mean knowing what you know now 

1400
01:18:08,360 --> 01:18:12,040
and stumbling upon this trade 
when you did and, and not even a

1401
01:18:12,040 --> 01:18:14,920
trade at this point like a true 
long term investment. 

1402
01:18:15,200 --> 01:18:18,320
What would you tell people to go
out and look for and seek? 

1403
01:18:18,920 --> 01:18:24,120
I would look for industries. 
That are really down on their 

1404
01:18:24,120 --> 01:18:28,400
luck that we're look at the I 
mean I look at my world is is 

1405
01:18:28,720 --> 01:18:30,720
commodity and commodity linked 
equities. 

1406
01:18:30,720 --> 01:18:34,160
But it could apply to any 
industry where something is down

1407
01:18:34,160 --> 01:18:39,000
seventy 8090% where you've had a
lot of fail a lot of failure. 

1408
01:18:39,200 --> 01:18:43,800
And the longer the, the longer 
that's existed, the, the better 

1409
01:18:43,800 --> 01:18:48,000
the chances is that human 
element coming in the recency 

1410
01:18:48,000 --> 01:18:52,080
biases which permeate all sides 
of the of the market. 

1411
01:18:52,360 --> 01:18:55,200
So that's where I would look. 
And if you're a young analyst, 

1412
01:18:55,200 --> 01:18:58,440
you will have access. 
If you're working at a fund, 

1413
01:18:58,760 --> 01:19:01,000
you'll have access to the sell 
side research. 

1414
01:19:01,000 --> 01:19:05,400
I would really try and stay away
from that at first because it's 

1415
01:19:05,400 --> 01:19:08,560
going to be biased. 
And you know, now I'm not 

1416
01:19:08,560 --> 01:19:11,080
getting into agendas and all 
that, but you know, if you're an

1417
01:19:11,080 --> 01:19:13,200
analyst and you're recovering an
industry that's been beaten up 

1418
01:19:13,200 --> 01:19:15,200
for seven years, are you going 
to be the one that's going to 

1419
01:19:15,200 --> 01:19:16,760
stick your neck out and pound 
the table to buy it? 

1420
01:19:16,760 --> 01:19:18,880
Probably not. 
You might be, but that doesn't 

1421
01:19:18,880 --> 01:19:22,680
really happen a lot and you tend
to see the follow them follow a 

1422
01:19:23,840 --> 01:19:27,560
career preservation right And 
that I I get that, but I well, 

1423
01:19:27,600 --> 01:19:29,840
Mike going back to the to an 
earlier part in our. 

1424
01:19:29,840 --> 01:19:32,160
Conversation. 
If they're talking to the 

1425
01:19:32,160 --> 01:19:35,200
insiders in the industry and the
people inside the industry are 

1426
01:19:35,200 --> 01:19:37,880
convinced the industry is dying,
you're not going to get a unique

1427
01:19:37,880 --> 01:19:40,720
view, 100% Bill. 
And that's what happens. 

1428
01:19:40,720 --> 01:19:45,040
And so when what early on, when 
I would start talking to uranium

1429
01:19:45,040 --> 01:19:48,440
analysts, as I got to know that 
and started to form my views, I 

1430
01:19:48,440 --> 01:19:52,440
got, I was met with this, not 
all, but some of them say you're

1431
01:19:52,440 --> 01:19:53,520
wasting your time. 
What are you doing? 

1432
01:19:53,920 --> 01:19:57,120
And so it all comes down to when
you're looking at commodity 

1433
01:19:57,120 --> 01:20:00,600
linked type things. 
It's all 4th grade math, It's 

1434
01:20:00,600 --> 01:20:02,200
supply and demand. 
None of this stuff is that 

1435
01:20:02,200 --> 01:20:04,240
complicated. 
Uranium has some enrichment math

1436
01:20:04,240 --> 01:20:05,320
that you got to try and figure 
out. 

1437
01:20:05,320 --> 01:20:07,800
It's a little more complicated, 
but that may I don't know 

1438
01:20:07,800 --> 01:20:09,760
that's. 
You can figure it out. 

1439
01:20:10,160 --> 01:20:12,480
So it's really looking for 
industries that have been beaten

1440
01:20:12,480 --> 01:20:16,640
up, where a lot of the companies
have disappeared, where there's 

1441
01:20:16,880 --> 01:20:21,720
a negative bias permeating it, 
and then trying to take a very 

1442
01:20:22,520 --> 01:20:25,120
holistic view of supply and 
demand. 

1443
01:20:25,520 --> 01:20:29,480
And it really just requires 
spending some time doing it, 

1444
01:20:29,480 --> 01:20:33,400
right, finding your own sources,
like for a week, went to the WNA

1445
01:20:33,400 --> 01:20:37,000
and downloaded the PRISM 
database and, and, and looking 

1446
01:20:37,000 --> 01:20:39,080
at all the different reactors, 
trying to understand it takes 

1447
01:20:39,080 --> 01:20:41,960
time. 
And if you're a young analyst, 

1448
01:20:41,960 --> 01:20:44,880
you have to work for a firm that
is willing to give you that 

1449
01:20:44,880 --> 01:20:49,240
time, right? 
I often hear from younger 

1450
01:20:49,240 --> 01:20:52,560
analysts or guys will work for 
me, say they're talking to 

1451
01:20:52,560 --> 01:20:55,560
someone who's looking at uranium
and the spot prices. 

1452
01:20:55,600 --> 01:20:57,880
This is a good example. 
Spot prices down a couple of 

1453
01:20:57,880 --> 01:21:01,240
bucks and my guy will get a call
from someone at one of these 

1454
01:21:01,240 --> 01:21:03,720
firms, say my boss says I got to
be missing something. 

1455
01:21:03,720 --> 01:21:07,480
Somebody knows something you 
don't, you know, it's like, OK, 

1456
01:21:07,480 --> 01:21:10,440
well, that's not true. 
You might think that because but

1457
01:21:10,440 --> 01:21:14,720
this is an oil, right? 
This isn't a look that even that

1458
01:21:14,760 --> 01:21:17,280
I could make an argument, but 
it's not the case. 

1459
01:21:17,280 --> 01:21:21,400
But there you just have to 
ignore the noise and you have to

1460
01:21:21,400 --> 01:21:25,560
be the firm that allows you to 
do that right, That has has 

1461
01:21:25,720 --> 01:21:28,160
longer view cat longer term 
capital. 

1462
01:21:28,160 --> 01:21:31,560
If you're in this for a quick 
trade, you're probably, it's not

1463
01:21:31,560 --> 01:21:34,680
the trade, it's not the 
investment, but it's it, it 

1464
01:21:34,680 --> 01:21:39,560
really is. 
Let let your own research guide 

1465
01:21:40,000 --> 01:21:43,360
your numbers and let those 
numbers guide your conviction. 

1466
01:21:43,560 --> 01:21:48,480
When somebody tells us something
about nuclear uranium that can 

1467
01:21:48,480 --> 01:21:51,000
affect supplier demand. 
Well, I could plug and play it 

1468
01:21:51,000 --> 01:21:53,200
into our model. 
And I really, I, I don't care 

1469
01:21:53,200 --> 01:21:55,880
what the narrative is. 
I understand how the math works 

1470
01:21:55,880 --> 01:21:57,040
and, and then we'll go from 
there. 

1471
01:21:57,040 --> 01:22:00,480
I have to respect the narrative.
Like I said earlier, it helps 

1472
01:22:00,920 --> 01:22:04,520
inform maybe when I want how I 
want a position sometimes, but 

1473
01:22:04,520 --> 01:22:07,960
just do your own work. 
I worked for a really, really 

1474
01:22:07,960 --> 01:22:10,200
good hedge fund manager many 
years ago. 

1475
01:22:10,200 --> 01:22:13,320
I won't mention his name here, 
but and one of his rules was 

1476
01:22:13,320 --> 01:22:15,760
never underestimate the laziness
of investors. 

1477
01:22:16,240 --> 01:22:20,280
And right, just because you hear
it doesn't mean it's so and so 

1478
01:22:20,600 --> 01:22:23,560
just say do your own work. 
I like it. 

1479
01:22:24,400 --> 01:22:26,080
Well, Mike, I. 
Appreciate you. 

1480
01:22:26,080 --> 01:22:29,640
Coming on the program. 
I was reticent to dip my toe 

1481
01:22:29,640 --> 01:22:34,080
into uranium because it has 
bubbled up into my feet a little

1482
01:22:34,080 --> 01:22:35,960
bit more. 
And whenever people kind of get 

1483
01:22:35,960 --> 01:22:38,080
on a trade, I get a little bit 
nervous about it. 

1484
01:22:38,080 --> 01:22:41,240
But I always told myself if Mike
Alkin ever contacts me or 

1485
01:22:41,240 --> 01:22:44,160
anything and wants to come on 
the show, he's the guy I'm doing

1486
01:22:44,160 --> 01:22:46,360
it with. 
Or that guy, John Quakes, John, 

1487
01:22:46,600 --> 01:22:49,040
John and I have never actually 
chatted and, and I don't know, 

1488
01:22:49,040 --> 01:22:51,720
like I said when you popped into
my I don't know if you followed 

1489
01:22:51,720 --> 01:22:54,760
me on Twitter or somehow like 
like something I was going 

1490
01:22:54,760 --> 01:22:56,480
through it because I don't post 
anything. 

1491
01:22:56,480 --> 01:23:00,480
And I checked Twitter every few 
weeks and I happened to go in 

1492
01:23:00,480 --> 01:23:04,240
and I saw on my timeline 
something you had an interview 

1493
01:23:04,240 --> 01:23:06,560
and I've seen you do things 
before and I've always loved 

1494
01:23:06,560 --> 01:23:09,640
your work. 
And but I noticed in my thing, I

1495
01:23:09,640 --> 01:23:11,440
didn't follow you. 
I said, oh, let me follow. 

1496
01:23:11,560 --> 01:23:15,320
So I because I don't know how. 
I I because I lost track of you.

1497
01:23:15,720 --> 01:23:17,120
Yeah, man. 
And then I was like, is this 

1498
01:23:17,120 --> 01:23:20,160
really Mike Alkin? 
Is that you? 

1499
01:23:20,240 --> 01:23:20,680
I said. 
Yeah. 

1500
01:23:20,680 --> 01:23:23,040
And then that was that. 
But yeah, so that's great. 

1501
01:23:23,040 --> 01:23:26,920
I'm glad we connected, as am I, 
as am I, and I I hope to. 

1502
01:23:26,920 --> 01:23:29,560
The extent that this gets the 
word out on you and your firm, I

1503
01:23:29,560 --> 01:23:32,480
hope you get some good inbounds 
and I, I hope maybe some more 

1504
01:23:32,480 --> 01:23:36,600
informed calls come in. 
And I, I appreciate you teaching

1505
01:23:36,600 --> 01:23:39,520
my, my listeners something. 
Is your podcast still up? 

1506
01:23:39,760 --> 01:23:41,840
No, I haven't done that since 
2019. 

1507
01:23:42,320 --> 01:23:44,720
Yeah, I didn't know if it was 
still in the feed or something. 

1508
01:23:44,760 --> 01:23:46,080
That's a good question. 
I don't know. 

1509
01:23:46,560 --> 01:23:48,560
Yeah. 
People should listen to it, to 

1510
01:23:48,560 --> 01:23:50,960
the. 
Extent your content is your 

1511
01:23:50,960 --> 01:23:53,000
resume. 
Your resume is loud and clear on

1512
01:23:53,000 --> 01:23:55,320
this idea and I recommend you 
for it. 

1513
01:23:55,320 --> 01:23:56,720
There's a bunch of stuff on 
YouTube. 

1514
01:23:56,720 --> 01:23:57,800
We don't have a channel, but 
I've. 

1515
01:23:57,800 --> 01:23:59,320
Done interviews and stuff like 
that? 

1516
01:24:00,200 --> 01:24:01,720
Well, good deal. 
How can people get in touch with

1517
01:24:01,720 --> 01:24:03,600
you? 
I think if you go to Sachem 

1518
01:24:03,600 --> 01:24:07,480
Cove. 
Dot com there's a way my I have 

1519
01:24:07,480 --> 01:24:10,880
a business partner, Tim Rotola, 
who runs the that side of the 

1520
01:24:10,880 --> 01:24:12,760
business. 
I don't go to the website, so I 

1521
01:24:12,760 --> 01:24:14,640
don't know, but I think it's 
sachem.com. 

1522
01:24:14,720 --> 01:24:17,480
Yeah, we'll, we'll drop it in 
the show notes and again. 

1523
01:24:17,480 --> 01:24:19,840
Thanks for your time. 
It was a pleasure and I really 

1524
01:24:19,840 --> 01:24:20,920
enjoyed it. 
Thanks so much. 

1525
01:24:21,360 --> 01:24:22,240
All right. 
Mike, take care. 

1526
01:24:22,520 --> 01:24:23,080
OK, bye.