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MacroVoices #517 Justin Huhn: Uranium at The Tipping Point
01:28:11
MacroVoices Erik Townsend & Patrick Ceresna welcome, Justin Huhn. They’ll discuss the outlook for nuclear energy generally and for uranium markets in particular https://bit.ly/4rgcNyd 🔻Download Big Picture Trading Chartbook 📈📉: https://bit.ly/4qRKO8v ✅Sign up for a FREE 14-day trial at Big Picture Trading: https://bit.ly/4d1fcag 🔴 Subscribe to Patrick’s Youtube Channel: https://www.youtube.com/@Patrick_Ceresna 🔴 Subscribe to Erik's Substack: https://eriktownsend.substack.com/
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- [00:08]
A
This is Macro Voices, the free weekly financial podcast targeting professional finance, high net worth individuals, family offices and other sophisticated investors. Macro Voices is all about the brightest minds in the world of finance and macroeconomics, telling it like it is bullish or bearish. No holds barred. Now here are your hosts Eric Townsend and Patrick Seresna.
- [00:34]
B
Macro voices Episode 517 was produced on January 29th, 2026. I'm Eric Townsend. As regular listeners know, I'm convinced that uranium will be the big trade of 2026. So uranium insider Founder and editor Justin Hune returns as this week's feature interview guest. Justin and I will discuss the outlook for nuclear energy generally and for uranium markets in particular. And Justin prepared a slide deck I strongly encourage you to download to accompany the feature. Then be sure to stay tuned for our post game segment after the feature interview when we'll have Patrick's Trade of the Week plus our perspective on all the major markets.
- [01:13]
C
And I'm Patrick Surezna with the Macro Scoreboard week over week as of the close of Wednesday, January 28, 2026, the S&P 500 index up 150 basis points trading at 69.78. The S&P 500 printed 7000 on an intraday basis for the first time. We'll take a closer look at that chart and the key technical levels to watch in the post game segment. The US dollar index down 249 basis points trading at 96.33. That US dollar route continues the March WTI crude oil contract up 427 basis points trading at 6321. The breakout to new multi month highs. The March r Bob Gasoline up 106 basis points to 190 the February gold contract up 963 basis points trading at 5303 parabolic. We'll discuss that in greater detail in the post game. The March copper contract up 260 basis points trading at 592. A breakout to all time new highs on the COMEX and the February uranium up 1559 basis points trading at 90 and a quarter just blasted off in the last week the US 10 year treasury yield up 1 basis point trading at 426 and the key news to watch this week is the PPI inflation numbers and next next week we have the ISM manufacturing and services PMIs and the closely watched jobs numbers. This week's feature interview guest is Uranium Insider Founder Justin Hune. Eric and Justin discuss why the Uranium market is tightening the shift back towards long term utility contracting. And while financial vehicles like SPUT can add pressure to the physical market and more, Eric's interview with Justin Huhn is coming up as Macro Voices continues right here@macrovoices.com.
- [03:18]
A
And now with this week's special guest, here's your host, Eric Townsend.
- [03:24]
B
Joining me now is Uranium Insider founder and newsletter editor, Justin Hune. Justin, great to have you back on the show. I can't believe it's been a year since we've had you on, folks. Justin prepared a slide deck to accompany today's interview. You're definitely going to want to download this one. You'll find the link in your Research Roundup email. If you don't have a Research Roundup email, just go to our homepage, macrovoices.com, click the red button above Justin's picture that says Looking for the downloads. Justin wow. First of all, I want to give you credit. Just a few weeks ago, this correction that we saw in Uranium Stocks, I think you called the bottom of that exactly to the day in the newsletter. That was a great help to me and your other newsletter subscribers. I want to move on though, to another call that you've just made in the last few days. You guys are starting to trim some positions just because, boy, this as much as I'm incredibly bullish, we've had such an incredible run the last few weeks. I look at the stochastics now that we're extreme oversold on both the daily and the weekly charts. Now they're falling into overbought territory. So what do you think? Are you guys trimming just because it's discipline and you've done so well, or is it maybe a turning point where we're about to get a swing trade lower?
- [04:40]
D
It's definitely the former. First of all, happy to be back. Thank you so much for having me on. Always enjoy speaking with you. I know you guys have done a lot of work in this space, so always enjoy these conversations. Yeah, the space right now has had a stellar start to the year. In fact, the fast four weeks basically been straight up for the uranium equities. The ETFs are up 30 plus percent to start the year. It's been a pretty incredible move. We have, as you know, a trading portfolio that we established last year that did extremely well for us last year. In fact, we established it in February of 2025 and it's up over 100% since inception, and that involves swing trading, a basket of highly liquid stocks in the space. So for us, this is more of a chart Interpretation, as well as some influence from either the physical market and or sentiment. So sentiment is definitely heating up here. That's one sign. But the physical market is chugging along. We just had the UXC print today, over $91 a pound, up from the low 80s to start the year. So it's been a solid move so far in physical. We think that move has plenty of legs. So as far as trimming positions, that primarily is the swing trading portfolio for the most part. We do have a bit of cash in both portfolios, but we are very net long here and expecting further moves. So not expecting a big trough. The broad market is not necessarily my forte, but if that loses some momentum, we could definitely see some downside here for the equities. But for now it's looking very, very strong. And Sput here has a war chest. They're going to end the day with over 200 million in cash, and that's a lot of money to buy physical uranium. And luckily they're not the only players in the spot market right now. But we can dive deeper into that if you want.
- [06:21]
B
Yeah, let's go a little deeper on that subject. Because sput, the Sprott Physical Uranium Trust, I think most investors don't understand how pivotal of a role it plays when SPUT is trading at a discount to nav. It does not have the ability somebod buying some more SPUT is not like buying uranium in the market and taking any supply off the market. But when SPUT trades at a premium to nav, like it is right now, every share that somebody buys where this trust itself can issue a new share and raise cash, that's cash that you would think is immediately, in the most immediate sense, in the moment that you buy that share, you would think that that's sort of buying uranium on the spot market, but that's not. There's a lag effect there. Sput's built up a war chest, as you said. Why are they doing that and what happens? And when will it happen that they start to put that money to work? Because for the longest time everybody was saying, sput's not raising money. That's the reason we're not really seeing the spot price moving. Well, now we are seeing the spot price moving. Sput is raising money, but they're not putting the money to work. How come?
- [07:34]
D
So they bought the monthly average of the prior negotiated limitation of annual purchasing of £9 million in January, already £750,000. And in our estimation, they were doing this because they needed to do A couple of things before they could come back in and raise a lot more money or buy a lot more pounds, which is re establish their ATM and renegotiate the not only the shelf prospectus and file the shelf prospectus, which they did for 2 billion and their ATM now has a fresh 1 billion. But also renegotiate that annual limitation with the Ontario Securities Commission, which I believe they are in process of doing right now, or if not in the coming weeks. Either way, they are back in the market doing some purchasing today. But leading up to filing that new prospectus and negotiating with the osc, it seemed like they were sort of treading lightly. So they weren't issuing as much as many units as they normally would when trading at a premium. And as mentioned, we've had a very equities risk on environment for the entire month so far with the exception of a couple of days. And so they just traded at an increasingly large premium to their net asset value. I think the highest closing nav that they had this month was pushing 9% premium. So yesterday, once we saw that their ATM had been re upped to a billion, we saw spot trade down pretty heavily, taking it all the way essentially back down to nav. And what that was was Spud actually issuing units into the market. They raised almost 20 million yesterday. As far as we can tell, they've probably raised north of 50. I think they've raised somewhere between 60 and $70 million today alone on Tuesday the 27th as we record this. So the war chest is basically a factor of them not buying uranium because they were treading lightly prior to negotiating again with the osc. So that is all sort of coming to a close and they're going to be back. It, it feels to me, Eric, like there's a bit of a Wall street awareness of some type of kind of uranium squeeze environment here. In fact, we're seeing multiple elements in the physical market that are resembling Q3 of 2023, which is essentially, we had a firmly established trend in the spot price and the sellers started to hold on a bit more tightly to their pounds. And we started to see that, that dynamic over the past, let's say week or so kind of wasn't there to end the year, not in the beginning of the month. But it's not just Spud in there buying. You know, we see traders in there as well, other financials, hedge funds and banks are in there as well. And utilities also, some of the utilities are kind of chasing the spot price here and there's decent activity in the term market. So all signs are pointing to further tightness in the physical market and higher prices.
- [10:10]
B
So just to recap all of that, the story of the last quarter of 2025 was basically look the, the fundamentals are really terrific for the UR market but unfortunately the spot price just isn't moving for some reason. And until it does, this thing can't really be unleashed. Then you get all of a sudden sputz raising all this money. They've got the cash to buy much more uranium. They're not allowed to do it because their agreement with the OSC limits the amount that they can buy. As a result they're getting all of this cash built up. And despite the fact that they're not allowed to put that cash to work in the spot market, we're still up 30% on the year and January is over yet. So when they hopefully negotiate with the OSC and are allowed to invest the money that they're sitting on, the cash that they're sitting on, it potentially is big push up on prices. Now what I want to come to next because I think it's really important for investors to think about is a lot of people have been saying look, if you look at the charts, as much as the uranium miners have done fabulously well, that seems to be a lot of speculation. The spot price of uranium wasn't really doing so well and therefore the smart money ought to not be buying any more uranium stocks. We ought to be buying SPUT and other proxies for direct investment in not uranium miners but uranium itself because it's the commodity as opposed to the stocks that hasn't moved yet. So you really ought to be doing a sector rotation, if you will, out of the uranium miners into SPUT and other other proxies for uranium itself like YCA and the other tickers that are just uranium. Now that's a pretty popular view. I don't agree with it, Justin. What I think is going on is the commodity market has to balance itself in real time. The stock market is forward looking. The stock market saw this coming. That's the reason you saw such a big appreciation in the miners. And I think the miners have been kind of at a point where they can't get too far ahead of spot is spot finally takes off. I think the miners are set to explode higher. Which of those views is right because it really affects where you're going to put your money in this sector?
- [12:34]
D
Well, I think that an investment in SPUT or physical uranium, let's say here a proxy for physical Uranium is a very, very strong risk reward proposition. The downside for the spot uranium market here is relatively minimal. Of course you can have markets go risk off and SPUT can technically trade at a much larger discount to nav as it has a few times in the past, you know, pushing a 15, 16, 17% discount. I would argue the downside for spot here is, you know, 15 to 20% maybe in a risk off environment. But spot price is highly unlikely, at least right now, to be moving down at all, let alone, you know, a five or ten dollar move down. Now we will see this move up, eventually peak and eventually pull back probably to a higher low. The low of last year was in the low 60s. Then we had a floor move up into the 70s and I would argue the floor now is probably in the mid to high 80s as we're trading 91 here. So the, the confidence in spot moving higher is very, very high. And so your risk reward for spot is extremely attractive. Your downside might be 10, 15, 20 maximum. And the upside here could potentially be 100, maybe even more if things get really wild. So it's a very, very, it's a much safer investment, it's very liquid. So for large institutions that don't want to take on individual mining stock, risk buying SPUT is a no brainer. With that said, I agree with you. I think that Q4, you know, Q3, late Q3 into Q4 of last year was the equities market for the uranium mining stock sort of looking over the valley and expecting the prices to eventually move. And that was a pretty consensus type thought back then and kind of still is. We had the term market start to move up. After 15 months of consolidation, we had the spot market slowly start to move up. Like I said, we saw the floors move from the 60s into the 70s. Over just a few short months we were seeing evidence that utilities were starting to step back into the term market. And in particular last summer we saw large, very large utilities placing very small RFPs into the term market, seemingly sort of dipping their toe in the water, kind of testing the market to see where, what sort of responses they would get. And all of that tightening has, you know, one obvious conclusion, which is, which is a move up in price. So are the equities technically overbought? If you're looking at unbiased view of the charts, yeah, sure they are. But what is the backdrop? How do you value a company like NextGen, like Denison Mines, these, these emerging producers, if you price in $120 uranium instead of Going back to their feasibility studies, pricing in fifty or sixty dollar uranium. I mean, it's a very, very different environment. So. So I agree with you. I think the equities are looking over the valley, expecting this price move that we're currently in, I would argue the early stages of. I would say yes. And I mean, I own both. I think if you're going to buy uranium stocks, that's best to diversify. I think just the classic investment capital preservation tactics, you shouldn't spare those if you're investing in uranium, Definitely be diversified and don't go all in on one mining stock because it is still mining. And crazy stuff happens in mining. You can have permitting risk, you can have all sorts of things, accidents, et cetera, et cetera. So diversified basket of miners, plus a reasonable holding in the Sprott Physical Uranium Trust, or yellowcake, I think is really the way to go to allocate long here.
- [15:51]
B
Let's look at some of the charts in your slide deck, which is excellent. On the first page you're talking about nuclear growth projections. And I think this is really important to get into because as much as you and I are both extremely bullish on this sector, I think it's the trade of the decade if you. If not longer than a decade. But look, our job as professional investors is to take the contrarian side and say, how could we be getting this wrong? It seems to me like the growth projections for nuclear, we have to ask ourselves, okay, what could turn this trend around? Because as your chart on page one shows, it's just crazy high projections in terms of what's likely to happen, especially if the Trump administration continues to get its way and is able to promote the nuclear renaissance as much as Secretary Chris Wright has been. Seems to me like we do have a political risk here in the sense that President Trump, on fronts that are completely unrelated to energy, is maybe starting to not have as much unified support in the Republican Party for all of his policies. Do we have a risk that maybe the Trump administration won't be able to pump this as hard as they have been and we're going to have some of these projections come back down?
- [17:06]
D
Well, the good thing with Trump's proclamations in this particular case is that this is something that the industry actually wants. So you're seeing utility interest in building new nuclear. You're obviously seeing the Trump admin highlight the absolute imperative to increase electricity generation capacity domestically, not only just the growth of AI and data centers, et cetera, but just the growth of electrification and demand for electricity. Even X data centers is set to grow significantly. So they see the problem, they're trying to invest in it, they're trying to do what they can to support it. But you also have the tech companies, and the tech companies have extremely deep pockets, arguably almost as deep as the government itself, and they are investing directly in nuclear. And there's a further slide on this as well, slide number three, if you want to jump to that. A tech company investment is huge. We're seeing Meta, Oracle, Amazon, Microsoft, all invest billions and billions of dollars either with power purchase offtakes from nuclear utilities that are currently operating, or restarting island reactors like Constellation's deal with Microsoft to restart Three Mile Island. And we're actually seeing big tech companies make direct offtake deals. Like one, Amazon made a deal with Rio Tinto for copper supply. And I highlight this question here, just kind of throwing it out there, but it really is more of a tongue in cheek statement is will big tech companies secure fuel for their nuclear investments? I think that they will. I think that's an extreme right tail driver and potential catalyst for this investment for the price of uranium is to actually have a tech company make some sort of deal with a producer or an emerging producer to secure pounds as an offtake for future production of uranium, an eventual fuel for these reactors that they're either funding to life extend or funding to build. So how many reactors will we see the United States build in terms of new capacity is difficult to say. It's always been an obviously been a challenge for many, many decades. But clearly there's support not only from the federal government, but from all the entities I already mentioned. So I think if it's going to happen, it's probably going to happen now and soon. Will they be able to have 10 large AP1000 reactors under construction by 2030? I think so, but it remains to be seen. And this graphic of course goes out all the way to 2050 on page one here. And the big red bar is government targets. So anytime you're modeling that far out, you have to make a bunch of plugs and a bunch of assumptions with which the World Nuclear association, arguably a pro nuclear, but an unbiased analyst in terms of uranium demand, like they don't necessarily want to see more uranium demand or whatever you might say on that front, but they're taking all of the government targets and factoring those into this extremely bullish graphic. But if you even go over to 2035, so a 10 year picture, there's barely any plugs for those government targets. On that 10 year timeframe and in our own models, Eric, just looking at what's currently operating, what is likely to be life extended or already officially approved for life extension, and what's currently under construction and expected to hit the grid over that timeframe, that's the demand we actually model out for out to 2035 with very few plugs besides China continuing on the pace they're currently at now. Now that's how we model it. That's what we see for demand. Obviously the W and A, even going way out like this is a. This is more than a 3x in global nuclear capacity by 2050, will we hit those targets? It's hard to say in my estimation. It doesn't actually matter for the length of time for this investment thesis, in my opinion. But clearly there's an enormous amount of momentum, not only in the United States, but many other sovereigns that are looking to build nuclear here.
- [20:43]
B
On this theme of tech companies, I want to touch again on another potentially bearish risk factor. And again, I couldn't be more bullish on this sector. But if I think about what could go wrong, one of the things that could go wrong is Russia has a very large percentage of the enrichment capacity. So even if we can mine all the uranium that we need, and we can't, but the uranium bullish thesis is based on the idea of growing demand, not for raw uranium. Although raw uranium can be used in just a few reactor types, most of them require enriched uranium. And we're very dependent on foreign sources, particularly, particularly Russia, for that enrichment capacity. It seems to me that if the tech boys could figure out how to help, let's say, improve the pace at which something like laser enrichment is being adopted, by improving that technology, it could take a risk factor out of the market and it could accelerate demand dramatically. Because if I look at what the demand for the next 25 years for uranium is going to be, it seems to me like there's no question in my mind that there's going to be more demand than we could possibly build mines for if we can figure out how to refine and enrich it. And it's that enrichment capacity that I'm not so sure about. What do you think in terms of maybe the tech players getting more involved in enrichment or investing directly in enrichment?
- [22:09]
D
I think it's definitely possible. With that said, we're seeing a lot of investment, at least domestically here coming from the US federal government. We just saw three $900 million awards to General matters, Centris and Orano, which is Ironically, a French company that wants to build enrichment capacity here in the US And a smaller award for global laser enrichment. It's certainly possible. I'm honestly expecting the tech companies to get more involved in direct investment in the fuel cycle now that they're putting billions and billions of dollars down to, to build out the actual new nuclear capacity for the data centers. So that has yet to really hit. We have heard kind of whispers over the past year that the tech companies have been sort of poking around the fuel cycle and now seeing this direct offtake investment by Amazon with Rio Tinto for copper offtake. I don't think it's a wild estimation to believe that this is going to continue to happen on the uranium front. But yeah, the enrichment capacity I think is an interesting one. We're definitely seeing some being built out in China. Russia still has the largest capacity. The French are building some. There's a bit more being built out in the United States. Will it keep pace with the existing demand in the market? It seems to be. Will it be sufficient for these lofty projections like that graphic on page one of the slide deck? No. So if we're going to meet those needs, we're going to have to see much, much more capacity of both conversion and enrichment built out. Assuming that this build out is largely, you know, light water, boiling water, or advanced reactor designs and not heavy water, which so far it has been, not a whole lot of heavy water being built besides in India, and those are smaller reactors, much smaller capacity. So a lot more of the fuel services, fabrication, enrichment, conversion is going to be needed to meet these targets. But again, you know, these targets are also based on a lot of the reactors that haven't started construction yet either. So we hypothetically need that capacity right now. Based on what's under construction, it does appear that we see growth of enrichment capacity relatively in line with the growth of nuclear capacity.
- [24:09]
B
Ultimately, what really matters the most is whether the buyers are buying and whether the sellers have enough to meet the amount they want to buy. Let's move on to page four. Talk to me about what the history of this market has been and how it's evolving in terms of the attitude of fuel buyers. Because it seems like for a while, the last couple of years, we just kind of had this buyer strike where the buyers were convinced that increasing uranium prices were just a blip, that the prices were going to go back down, and they seem to be waiting it out. Is that changing finally?
- [24:40]
D
It does seem to be changing. It's very difficult for the investor mindset to kind of fully comprehend how utility fuel buyers generally operate and think about this market. You have fuel buyers that in many cases have been working in this industry, sometimes for the same utility for multiple decades. And the history of this market is very, very different from the present reality of this market. So if you go back, you know, go back into the 90s and 2000s following a huge price spike in the 70s where you had just a gigantic nuclear build out, you had 40 or 50 reactor construction starts per year in the mid-70s. It was a huge, huge buildout and in a massive mine supply. But you had utilities clamoring for uranium, you had the US buying uranium, you had the Russians buying uranium. It was, it was crazy. Just an absolutely huge price spike in the 70s with the oil crisis. Then you had the price crash because we had so much secondary supply. So starting in 1993, we had the Megatons and Megawatts program with 20 million pounds of Russian down blended high enriched uranium into fabricated fuel that was sent over to the United States fleet. 20 million pounds a year for 20 years. So the history of this market is big fluctuations in price. But most of the time, with the exception of a few spikes, one in the 70s, one from 04 to 07, and one theoretically potentially happening now, although I wouldn't argue that this is a temporary spike being driven by either some exogenous event or financialization, I think the financialization is influencing things here. But I just think Spud is kind of buying the marginal pound. We're seeing £100,000, £200,000 move price. It shouldn't be happening if it wasn't such a tight market. But the fuel buyer is looking back and saying, okay, forever. There's been all of the uranium I need at a relatively reasonable price price with very, very few exceptions. And their view of 04 to 07 was a massive commodities run. The Chinese did a decent amount of buying for a couple of years there. We had some mine floods and we had Uranium Participation Corporation, which became sput in 2021, buying uranium along with some hedge funds. It was a temporary spike. It came right back down after the gfc. But it started to grind higher again because the fundamental drivers were there. So that was a contracting cycle going back. And you can see, see in the graphic on page four that we had greater than replacement rates. A replacement rate essentially is how much uranium is being burned up in the nuclear fleet on globally on an annual basis. So going back to 2005, we had £250 million contracted, but we probably had about £170 million burned up in the reactor fleet. So greater than replacement rate, contracting big volumes. And that really led to that big move in price. Following that, following Fukushima, Japan shut off all the reactors, Germany started shutting them off. A few other countries had phase out plans like Belgium and Taiwan, and you had an abundant amount of uranium that was just hundreds of millions of pounds of oversupply liquid mobile inventory. Globally, the price crashed and utilities did not need to contract. So this is, this is long term contracting. This is a, these bars here are utilities calling up Cameco or Kazatomprom Uranium one and saying I want a contract for a few million pounds a year delivered out for a five year period, whatever it might be. They didn't need to do that because there was so much uranium floating around the spot market. They engaged in hundreds and hundreds of carry trades and not thousands. Where utilities engage with a trader and say I want a couple million pounds delivered, let's say two, three, four years out, they're usually more midterm, usually slightly smaller volume, and the trader goes and buys that material. In the spot market. The carry trade went a long way to cleaning up that mobile inventory. Those mobile inventories are largely gone. In fact, uxc, which is the primary nuclear fuel consultant in space, has essentially was warning, let's see, this was August of 23, so two and a half years ago they were warning that the age of inventory overhang is over, the buffer is largely gone. So fuel buyers here are starting to see that that liquidity in the market has largely dried up. Up. You can still buy in small volumes in the spot market or the carry trade if the math is right, based on the forward curve. But their options are running out in terms of what else can they do besides stepping up and signing large long term contracts with the primary producers, which is what they're starting to do. So we saw 71 million pounds added to the long term tally in Q4 of 2025 alone. A lot of tenders came into the market, a couple of large contracts were signed. And so how much can be bought in the spot market and carry trade? That number is diminishing. Secondary supplies are diminishing, inventories are diminishing. They can only flex up on contracts so much. So the flex provisions that were in these contracts that signed back in late 2000 teens, early 2000s, that are still being delivered on now, those flex provisions were for contracts that were majority, if not entirely base escalator to fixed price contracts. So if you signed a contract in 2020 for 80% fixed price and 20% market referenced at the time of delivery. And that fixed price was $40 a pound. And you're taking delivery now you flex up whatever is allowed in the contract, 20%, 30% flex provisions, sometimes for volume. Now that we're shifting to mostly, if not entirely, market reference contracts, those provisions start to look less attractive because you end up paying the same amount as the market reference delivery for the added pounds. So not only are there fewer flex provisions in the contract signed last year, the year before this year and moving forward, but the types of contracts have shifted. So all of the signs are there that we're shifting from a buyer's market to a seller's market. And this is a really, really difficult position for a fuel buyer right now. And I'll give you one example just to finish off this thought. These fuel buyers and these utilities are signing, not the fuel buyers, the utilities are signing power purchase agreement offtake with electricity consumers. And oftentimes these are long term agreements, 10 year agreements that basically fixed prices with, you know, inflation adjustments. So they know what they're going to be earning on the electricity side of things, right. With these agreements. Then they go and they call up Cameco, whoever it might be, and say I need to buy uranium to, to feed into this. Right? So Cameco says, okay, we're here at $91 spot. We'll sign a contract at $85 spot floor, 150, $160 ceilings, reference to the market at the time of delivery. I mean we're talking 50, 60, $70 spread between the floors and the ceilings. It's very, very difficult for utility to know what they're going to be bringing in on the revenue side of things, to not know what they're going to be paying on the fuel side of things. Really what it comes down to is they don't really have a choice and they're going to have to pay that. And they're starting to come to, let's say an acceptance. They've moved past the denial stage. Now they're moving into that acceptance stage and signing these larger, higher priced contracts that are largely referenced to the market at the time of delivery. And why are they referenced to the market at the time of delivery? Because producers want exposure to higher pricing environment which they are all very confidently betting on. And that really should tell you more than my pontifications, more than anyone else who's analyzing this market, what are the sellers asking for and what are they getting in their contracts? You know, if you want stability in an uncertain market, you're going to sign fixed price contracts. If you want exposure to what you are highly confident is going to pan out, you want reference to the market with ceilings that are sometimes close to 100% higher than where we are here. So that's what we're looking at. And utilities are slowly coming around. Fuel buyers, from what I'm hearing that have been multiple fuel buyers for large utilities that have been largely reliant on the spot market and carry trade for literally decades are shifting their strategy and focusing on security of supply rather than pulling every lever they possibly can to get a little bit here, a little bit there, as cheap as they can. That strategy is shifting and that's important as we go forward for term market volumes. Term market pricing, ultimately spot pricing, I
- [32:41]
B
would think that the seller's confidence has also got to be increasing with just the mechanics of what we're seeing in spot right now. Because if you're Cameco and you know, you're asking for those really high, you know, a floor that's just barely below the market, a ceiling that's way above the market, and the guy on the other side of the table is saying, you know, don't pull this crap on us or else we're gonna pull a buyer strike, you can just say, no, you're not. Sput is just awaiting regulatory approval to unleash a huge amount of cash that they're sitting on, which will easily support the spot market as long as we need to. You guys are not in a position to negotiate anything. Shut up inside. It seems like all of the sudden Cameco and the other big uranium suppliers can engage in. I'll go out in a limb here and say Trump style negotiating tactics of you don't have a choice, you're going to do what we tell you to do.
- [33:35]
D
Sure, yeah. The confidence in where this market is headed is very, very high amongst producers. And I think that the financialization of the sector is certainly supporting what the producers are wanting. To your point. And like I said, Sput being able to buy £100,000 here, £200,000 there in a highly liquid market, that shouldn't really matter. But it's that marginal pound is moving the price here and that alone is evidence of how tight the market is. And there's always some production coming into the spot market. It's not this static bucket that once it's gone, it's gone. It's just a settlement, It's a surplus settlement market market. But for the producers, seeing the spud activity, seeing the pressure on the spot market is certainly something that, that supports them wanting market referenced contracts that they're signing with utilities here. And, and like I said, you know, seeing how high these ceilings are going, that actually is literally telling you where they expect the price to go and who's done more work on the sector than the actual producers, especially the big producers that are having to sign these, these binding contracts for delivery every three, four, five, six, seven, sometimes 10 years out. You know, this is very, very important to their shareholders, very important to their bottom line. And, and they're seeing shareholder pressure that, that wants them to capture more of the upside in the future. And you see some of these brownfield restart companies that sign base escalated contracts at 80 bucks a pound were coming under fire from their shareholders. Like stop giving this away. We know the price is going higher. Hold out and capture that. And shareholder shareholder value is something that I think the utility fuel buyers don't really give enough, enough attention to. These companies don't exist to break even. And they all went through hell from 2008 all the way till, you know, just recently. So these companies went through absolute hell. Shareholders had been diluted to oblivion in the, in the 2000 teens. Finally the market is returning to bring some value to the actual producers and they are going to be beholden to their shareholders. And the shareholders want exposure to these rising prices. And that's something that, that utilities definitely have to understand going forward.
- [35:39]
B
Something you said earlier, Justin, was that the alignment of the industry with government policy meant that you're not getting a lot of pushback. One place I think there might be some pushback. If we move on to page five is the talk of a strategic uranium reserve. Intuitively you'd think the industry would be all for that. From what I hear, the utilities don't want there to be a strategic uranium reserve. What's that about?
- [36:04]
D
About? Well, it's just about the government being potentially a price insensitive buyer and adding pressure to an already tight market. So you know, the utilities are fully aware of the financialization of the sector and that you have very aggressive financial entities and SPUD is just a vehicle. It's really the investors that are coming into that and providing it with the capital to raise cash. But you also have hedge funds and banks and plenty of trader commodities traders that are all positioning net long. So the utilities are aware of all of this and they don't see a strategic uranium reserve being in their best interest, despite the fact that the spirit of the reserve potentially would be to hold you know a bunch of uranium for harder times in the future when perhaps that uranium could be sold or distributed to those utilities. That's really the spirit of the potential reserve and the, the existence of the reserve as it is now with this tiny amount of buying they did a few years back. Our understanding is that the buying that the SUR did, did, let's see, I think this was 2022 when they did buy from a couple of US producers that uranium is now in possession of the DOD. That's my understanding. So we believe that the Department of Defense actually is on the lower side in terms of their inventory. And that's not just for weaponry. That's of course for the nuclear navy and nuclear aircraft carriers. They're building multiples of these very large multi billion dollar ships currently that take a lot of uranium. Actually it's very, very highly enriched uranium that goes into these subs and these aircraft carriers and they're fueled once and we're talking many millions of pounds for a single fueling for one of these ships. So we think that there's pressure coming from that. But yes, of course the utilities have a strong lobby and I guarantee you they're doing what they can to put pressure against this establishment. So we're not necessarily betting on it, we're just going off of what we're hearing from the administration. They did establish or there's a proposal currently in Congress for a two and a half billion dollar stockpile of critical minerals of which uranium is one. And we hear Christopher Wright mention multiple times that they're considering a strategic uranium reserve. So maybe it happens, maybe it doesn't. It obviously would be intelligent for the security of the nuclear fleet of the United States to do that because the US utilities typically only hold about two years of inventory. So whether it happens or not, really not sure. But you're absolutely right. The utilities don't want it to happen and are doing what they can to pressure, pressure, you know, interest in the US Government to keep that from happening.
- [38:22]
B
So the government wants to underwrite free of charge an insurance policy to protect the nuclear utility industry from hard times by providing a safe haven resource of available uranium so that those utilities don't have to absorb the cost of holding those long term reserves themselves. And the utilities are objecting to that because it potentially interferes with what the prices are in the next three months. Sounds brilliant to me. Just genius and about and not at all out of character. From what I've heard from Mike Elkin about these nuclear fuel buyers, it sounds like exactly their mentality yeah, it's, you
- [39:04]
D
know, and I think the spirit of the reserve really is more of an acknowledgment of the reliance that 20% of our grid is on foreign entities. You know, we're mining a couple million pounds of uranium and consuming 50. Highly reliant on Russia for conversion and enrichment, highly reliant on Kazakhstan for uranium, and then secondarily Canada. So it's more of a just wanting to establish that to support the uranium miners in the United States than it is necessarily a basket of Uranium 4 utilities. But to your point, looking at that W and a graphic on page one, looking at the analysis that we do, that Goldman Sachs has been doing, that a number of other entities in the space have been doing, showing a clear and obvious very large growth in demand and struggling supply response. On the uranium side of things, the utilities and the fuel buyers don't really pay attention to that. Now that's speaking generally. There are a few fuel buyers in the United States that I know of personally that are very ahead of the curve. Their utilities are very well covered. They've done their own supply and demand modeling, for example. So they get it and they're well covered. And they know and believe that prices are coming higher prices are incoming for most of the rest of the utilities. They buy what they need to buy when they need to buy it and they have to get approval to do so from their upper management that has a budgeting committee and their bottom line matters. So, you know, if the US Strategic Green Reserve announcement causes a $5 jump in spot and then the actual buying causes another few dollars jump in spot, you know, that's tens of millions of dollars to their bottom line that they are looking out for, not only on deliveries but for their future purchases as well. So I understand why they're pressuring, but at the same time it doesn't really feel like it's in line with kind of the spirit of what's happening here.
- [40:47]
B
Justin, you mentioned some of the international aspects of this. Let's talk about the other side of slide number five here where you talk about a huge amount of demand from China and India for uranium. They're engaging with Canada for uranium supply. As soon as I saw that, I thought, well, wait a minute. Last time anybody tried to sell anything to China or India, President Trump kind of intervened and said, no, you're not allowed to do that or I'm going to hit you with tariffs. Is there a risk that the US Government, for the sake of America first policies, tries to veto or nix those deals and say, Canada, don't sell your uranium to India or China, only sell it to us. Does that potentially affect the market?
- [41:31]
D
Market? It's hard to say really. It's hard to really predict exactly what Trump will end up doing on this front. Obviously he wasn't happy to see that Carney was meeting with Xi and trying to establish a critical minerals deal, selling uranium and a number of other elements to China. I think that he's trying to influence that deal not necessarily to make more uranium and other things available to the United States, but also just to throw his weight around and influence these decisions. And I think that there's, there's, you know, a lot of this stuff with Trump, in my personal opinion. There's just so much more that's going on behind the scenes that any of us have any idea of. So what's really behind this? I have no idea. But we do know that China is scouring the globe for critical minerals, uranium included. China as a sovereign has the largest inventory of uranium by a long shot. Their numbers are huge, north of 600 million pounds of uranium. But importantly, that's total strategic commercial inventory. It's not just utility inventory. That also includes military inventory. So how much of that is actually allocated for the, for their civilian nuclear program is harder to say. But they also have the most aggressive builds and that uranium is never leaving the country. This is strategic. Once it's on their shores, it doesn't leave. The only exception is that is sometimes they buy and then resell. So for example, they've been buying Russian enrichment and reselling it into Europe and the United States. Those volumes are small, but they will engage in that type of trading. With all of that said, simply seeing both the Chinese and the Indians, and most importantly to this point is that they're both sovereigns, right? You know, the Chinese utilities, state owned, the Indian nuclear operators are state owned. They are looking at Canada for supply. And Canada has been the most reliable supplier to the west by far because Atom Prom has been perfectly reliable. But they've had trouble with their shipping routes when the west is trying to avoid shipments out of Russia. And they've had much more business engagement with both the Chinese and the Russians. So Canada is really our best source of uranium in the Western world. And to see two Eastern sovereigns start to negotiate with Canada and potentially with Cameco directly, especially on the fat on the side of India, should be and is somewhat of a wake up call to multiple Western utilities that the sovereigns are stepping in up because you have these, these private or publicly owned utilities that are, that are hemming and hawing about large procurements and much more price sensitive. And then you have the eastern sovereigns just stepping up and you know, I'm your huckleberry and let's get it done. So this is something that I think is going to be a trend going forward is you know, we're seeing that general trend anyways just kind of globally right now. We're going much, very, very quickly away from kind of a multipolar world to more of a nationalization type of world. And I think that a lot of countries are starting to kind of look out for number one in a way that we haven't seen in a number of decades. Kind of fourth turning type stuff. So will we see more sovereigns engage in, you know, America first type policies for themselves? We've heard the EU talking about having a strategic nuclear fuel stockpile. I think more of this is coming. And importantly Eric, this is all kind of right tail these strategic stockpiles that this secondary demand is not something that is very modeled out. So in our own models that secondary demand we have a plug number of 10 million pounds a year. Last year we saw the financials do almost double that alone. That's not talking utility inventory restocking, that's not talking sovereign stockpiling, that's just the financials. So that secondary demand is a very, very potentially large number. I think more of this is coming in the near future.
- [45:11]
B
Now we've been talking about western supply. Let's also cover the eastern hemisphere supply. Russia has, as we discussed, most of the enrichment capacity, but they don't produce a whole lot of uranium in Russia. It's Kazakhstan that's the big producer in that part of the world. Tell us what's going on here on page six.
- [45:29]
D
Yeah, this I think is a really, really interesting element of this market that is emerging. And the table on the left hand side came from some analysis that came out from Oceanhall. So I want to plug those guys. They did some good work on this front. So Kazakhstan is by far the world's largest producer. They produce about 40% of the uranium supply on an annual basis right now. And what happens in Kazakhstan affects this entire market. The graphic on the upper right of slide number six shows their existing production profile. They expect their production to peak in the next two or three or four years. And that is based on a very, very large project, the Budanovskoye project, which is a joint venture with Russia. Russia. So Russia, like you mentioned, has the largest capacity for both conversion and enrichment and conversion is the process of turning U308 or mined uranium into a gas uranium hexafluoride so that it can be enriched in a gas centrifuge. Despite the fact that Russia has the most capacity for conversion, they are net buyers of UF6, the product of conversion. That's how much demand they have for their enrichment services globally and how short they are on the uranium front. So they need uranium and they need it now and they need it badly. So they're putting a lot of pressure on Kazakhstan to develop this large jv. Well, if you look at the production volume ladder with these new mineral extraction tax hikes, you know that Budanovskoye project, its max capacity, 100% of subsoil use is 6,000 tons a year. So assuming they reach that which is possible, we model out that they do, but it's no guarantee that they do. They'll have an 18% tax on that. And look at the uranium price. We're already above $90 a pound. They could potentially be paying a 20 and a half percent tax on uranium coming out of the country. And this, of course, is a move on behalf of Kazakhstan, which is. The state is 75% owner of Kazatomprom and 25% publicly floated on the London Stock Exchange. The state is trying to do what they can to establish this taxation and ownership of the joint ventures as well, to maximize what they will be earning and benefiting out of these limited deposits in the country. Yes, they're very, very large. They'll be able to produce for decades going out into the future. But they want to capture this lightning in a bottle. So what this means is that the Budnovskoy project and the second largest is the Catco JV with the French, who are also very, very short uranium, and that can produce potentially up to 4,000 tons. So the two largest projects are going to be hit with the largest levels of taxation coming out of Kazakhstan. Buy the two entities that most need uranium globally, the French and the Russians. They need it and they need it very, very badly. They're both very short with pipeline problems for the uranium projects. I don't see this increase in the met in lowering production out of those projects. I see it affecting price. So they're going to want to do what they can to ramp those projects, which means prices have to go higher based on that. This is all to say that that Kazakhstan is limited and you can see their own production profile going out into the future. Yes, they don't have years on this X Axis. But this is about a 2050 graphic. So after peaking you can see it declines very, very rapidly. Some of their existing legacy projects are already in decline. Many more hit sharp decline rates in the next five, six, seven years. So they need to invest a lot of money in establishing new deposits which of course are less attractive than deposits since they first started to develop back in the 2000s. 2000s. And this all plays into, you know, just looking at this price graphic at the lower right of this, of this slide is this is inflation adjusted. And so if you look back at the inflation adjusted spike, even the term price went to 150 inflation adjusted back in 2007. And now we are at $88 term with a much, much, much more favorable environment. And all of the elements I've been discussing today, including the, these high mineral extraction taxes and the increasing moves that the country is making to, to increase their ownership of their joint venture projects when they renegotiate the license for the joint ventures. So some of these projects, all these JVs that are existing now have to be renegotiated over the course of the next 10 years when they are ownership goes from many cases, 50, 50, 49, 51 goes to 90, 10. Kazakhstan and the new developments for the JVs is automatically 75, 25. So Kazakhstan is starting to take much more seriously the ownership of their mineral wealth. And that is only going to have accretive pressure on the price.
- [50:01]
B
Let's jump ahead to page eight where you talk about secondary commercial inventories. First let's define that term, what we're talking about, but then explain what this trend is about where it seems like everybody had plenty of inventory and all of a sudden they don't. Why don't they? They.
- [50:16]
D
A lot of that inventory drawdown has simply come from the lack of procurement in the long term market and the lack of supply response.
- [50:24]
B
Let's just start with a definition of what we mean by secondary commercial inventory. Who's holding what inventory of what, where.
- [50:30]
D
Sure. So this, this is a little bit tricky because this data in this graphic comes from UXC and UXC counts inventory drawdown as secondary supply. They've come under a little bit of criticism for doing that over the years because they're technically double counting, right? They're that those pounds come out of the ground and in year X and that's counted as supply. And then when they're draw down that's counted as secondary supply. The reason they do that is because we're not seeing reactors actually not be able to operate because there is no fuel. So anytime you see the purchasing volumes on any given year less than the burn up rate, that gap is quote unquote inventory drawdown and or secondary supplies. So in this case you see that giant Orange Bar in 2021 as inventory drawdown or secondary supply. That was largely influenced by spots buying, right? We had what did they buy? 20 something million pounds in 2021. So they were buying excess inventories that were in the market. And so these commercial inventories is basically just any inventory that's held by any commercial entity. And so in 2021 a lot of that came from traders who were holding pounds in carry meant to deliver to utilities. The following year, two years, three years down the road, the SPUT started buying the spot price spike. These traders sold those held pounds to SPUT and then went back into the midterm market to procure from a producer. So that was kind of this reverse carry trade. And the reason why that inventory, that inventory number and that secondary supply number so big for 2021. But secondary supplies, they're always a part of this market. And so you can sort of put those in two different buckets. One is is actual mobile inventories that are held by somebody commercially somewhere. And the other is actual supply coming into the market that's new secondary supply. Now that would primarily come from enrichment, underfeeding or tails re enrichment. And without getting super geeky with this, this is a number that was pushing 25 to 30 million pounds annually just five years ago. This is probably closer to 10 million pounds a year right now. And this is basically when there's excess enrichment capacity. What enrichers will do is they'll actually spin those centrifuges down to a lower tails assay than what was dictated in a contract that the utility has provide to them the feedstock for that enrichment contract. So they spin to a lower tails, they have a little bit of extra feed and they under feed the centrifuge and sell that excess feedstock into the market as UF6, that is underfeeding tails. Re enrichment is actually when there's really a trough in enrichment demand, they can actually take tails material and spin it back up to natural UF6 and sell that into the market as well. So that is, that has literally been cut by 2/3 over the past five years. The other bucket is just these buffer inventories. Utilities hold them, in some cases, sovereigns hold them. And this is just material that's been sitting around from decade of overproduction in the 2020. Now that material is largely gone. But utilities will always hold some inventory. And the reason they do that is because the fuel cycle takes so long. For uranium to go from mined out of the ground into fabricated fuel takes at least 18 months and most commonly 24 to sometimes even 30 months. So because it takes so long, utilities will always hold inventory, and they usually hold it across the fuel cycle. So every utility will at least have one extra core load of fabricated fuel on site at all times. But they'll also hold some uranium, some UF6 at the conversion facilities, they'll hold some enriched uranium, and then, like I said, the fab fuel. So utility inventories are kind of always there. And what you're seeing when this UXC is projecting this out into the future is that buffer inventory is gone. So all we really have is a small amount of utility inventory that can buffer some, you know, some temporary swings in price or some temporary issues around supply, whatever it might be. But it's not this enormous amount of material that's overhanging the market. And as you see these big numbers, 21, 22, like I mentioned August 23rd, the age of inventory overhang is over. They can see that. And that's why they're projecting this out into the future. There just no longer is that buffer. And the conditions are absolutely there for this market to be disrupted. I say this all the time, Eric. You don't really have to even know exactly what is going to be the disruptor, just that the conditions are there for something to disrupt this market. And I'm not necessarily betting on disruption, but it's so obvious to me that something will disrupt this market. We don't know where the eventual supply is going to come from to balance the market. And the inventory side of things, the secondary supply side of things are so tight that a shock to supply, whatever it might be, whether that's the announcement of a stockpile from some sovereign, whether it's one of these large development projects like NextGen's Aero. You know, the entire nuclear industry is expecting this to be producing £29 million a year starting in 2031. That isn't happening. They don't know it yet, but that's not happening. Will it be producing eventually? Absolutely. How much and how soon is harder to say. But even by their own timelines, we see 2032 as first production, and that would be ramp up. And the company has already taking advantage of the power of the narrative here and the power of the story of this deposit, because it's so fundamental to the Supply even approaching anything balanced in the2030s, which it will maybe barely do if it comes online on time and on budget. But they're already saying, hey, we will be producing according to the market signals. Such a low cost, high grade project, they can cycle that production up and down as they see fit and essentially control that narrative. And they're starting to express that to the market. So. So it's just very fragile. Something's going to disrupt it. You don't have to know what that something is, just that the conditions are there for it to happen.
- [56:20]
B
Okay, so to summarize all of that, because I want to make sure I'm interpreting this right. If I went back 10 years and I said, oh my gosh, this uranium trade is going to be great because, boy, look at the balance of supply and demand. If just one mine went offline, it could unbalance the market and the price could skyrocket. People in the know would have said, sorry, it doesn't work that way. There's plenty of inventory hanging around. If the price up to the point that incentivizes those people to sell it, they'll sell it. There's plenty of buffer to absorb something going wrong. That was how it worked until last year that it stopped working that way. Now it really is back to if just one mine went offline, we'd be screwed and it would rocket the price much higher. Is that right?
- [57:05]
D
Absolutely, yeah. I don't know if I would necessarily agree with the statement that we'd be screwed. I do think that there's sufficient inventories out there to buffer something like that, but the price response would be massive. And, you know, this could really happen at any time. I think the most likely disruption is these very, very important larger development projects not panning out exactly as the industry expects. And the industry is basically looking at what the investors are looking at, right? They're looking at the feasibility studies, they're looking at what the company is telling investors, what they'll be producing and when. And of course that, that historically speaking, especially in the uranium world, just never happens. These mines are never built on time, they just aren't. And so that disruption is highly likely to pan out. But are there inventories? Yes, of course. The problem is those inventories largely are not for sale. So what are there? I remember there's a very popular uranium investor out there. I'm not going to mention him by name, but he basically was kind of bearish at this moment in time over the past couple of years, basically saying that, you know, there's £1.3 billion of commercial inventories. Like yeah, okay, half of that's in China. The rest of it is distributed around the global nuclear utilities. So US utilities have two years of inventory, EU utilities have three years of inventory. They don't draw those down Besides maybe a 5 or 10% drawdown here or there to try to buffer what they might feel is a temporary price spike and that's it. They're not going to draw them down to zero. Yes. If we go to $100, $115, $130, $150, will we see supply shake out here and there? Absolutely. We will see some inventory be sold in the market, we will see some profit taking. There's a decent amount of positioning here on behalf of hedge funds. They're not holding those pounds into perpetuity. They will sell them eventually. So there's always a little bit, a tiny, tiny bit of flex. But the big buffers are gone. There's no megatons to megawatt. Underfeeding is almost entirely gone. In fact, we would expect that we will potentially see some overfeeding in the coming years, which has the opposite effect. Extra demand for that enrichment process. And then of course, commercial inventories are on the low end, historically speaking as well, because Adam proms at a 10 year low in their own inventories. So just the general buffer is very, very small here.
- [59:24]
B
Justin, final question. We cannot responsibly both be as bullish as we are without asking the critical question of okay, what could happen to turn this all around? There has to be something, obviously. I guess the big one would be a worse than Fukushima sized nuclear accident that completely changes public sentiment globally around nuclear energy. And that could happen if somebody blew one of these things up as an act of terrorism in the world we live in, it's not at all impossible. Aside from that, what else can go wrong that could derail the extremely bullish hypothesis that both you and I share?
- [60:02]
D
Well, I suppose, you know, yeah, the nuclear accident potential, it's always there. I, in my opinion, the industry has much, much better safety checks in place following the Fukushima Daiichi disaster. So that was something that happened, you know, had no fatalities, but it did affect the industry. It caused Japan to shut off all the reactors and a number of other other countries do the same. So it had demand destruction, effectively 10 and eventually about 15% of global demand that was there in 2010 was gone by 2015. So demand destruction of some form or another is probably the biggest potential to kind of Turn this investment around. Because we don't see, at least in the near term, let's say the next five years, where supply is going to change the investment thesis eventually are we above 150, $200. And it stays there for a while and all of a sudden we see, you know, phosphate projects producing uranium and all of these marginal producers eventually going to produce reduction. Yeah, it will be a natural commodity cycle. This will have a peak someday. We don't see that happening in the near to the midterm. So the only thing that we could see that would change this, this thesis for us would be some kind of demand destruction. It wouldn't necessarily be because of a nuclear accident, because that doesn't necessarily mean demand destruction depending on how the accident actually would pan out. Certainly it'd be terrible for sentiment, at least in the near term, and probably really bad for the equities in the near term term. But would we see 50, 60, 70, 80 reactors shut off because of that? I don't really know and I kind of don't really think so. With that said, something else like if China all of a sudden says, okay, we're done building nuclear, we've reached our goals, you know, if that narrative is going to hurt and if they change their actual demand projections and their growth projections for nuclear, that affects the bottom line in terms of the supply and demand calculation. So. So a change in demand projections for whatever reason is really the only thing I can see that's going to derail this in the near to the midterm. But like I said, eventually this will be a commodities trade where high enough prices for long enough incentivizes enough supply that will eventually cap that price move and eventually will turn the price down. How soon that happens I can say very, very confidently. I don't see how that happens in any way, shape or form. Assuming the demand stays as, as what we're projecting, which I believe that it will in the next five, six, seven, eight years. I really don't see that happening. So even if we were at 150 uranium next week, it's still going to be years and years and years and years down the road for these marginal projects that could be profitable at that price to actually be producing into the market. So I think we have a strong Runway here. Eric, I know that you agree with me there, but hard to say what would cause that demand destruction. But that's the only thing that we would be looking for to actually change this trajectory.
- [62:54]
B
Justin, I can't thank you enough for another terrific interview before we close. Tell us about what you do at Uranium Insider. You publish a terrific newsletter. I quite enjoy receiving it. You got videos and all kinds of stuff. What's involved, how much does it cost and how do people sign up?
- [63:08]
D
Yeah, thanks Eric. Appreciate the support on that front. So, yeah, we basically cover this sector in and out on a daily basis. We've got a small team behind us, been doing this since 2019. We put a lot of focus into the physical market. This, in our estimation is the most important thing to fully understand if you're going to be invested in the sector. So we have multiple price reporters, multiple services, multiple connections in the industry, fuel buyers, traders, and we're communicating with these folks on a daily basis. We want to know what's happening out there in the physical market. The equities markets will definitely fluctuate. Sometimes they get way overbought relative to physical, sometimes they get way oversold relative to, relative to physical. But generally speaking, they move at least directionally with the price of uranium. So that's the most important thing that we follow and we track that and we report on that to our membership on a daily basis. We have a very in depth monthly newsletter. We do weekly update videos for our membership. We do a daily data sheet that follows the ETF and spot flows as well as the most important pieces of news on the physical market on a daily basis. We do a weekly watch list that does a technical analysis of the stocks that we cover. And I do a physical uranium market report once a week that dives much more deeply into what's happening in the spot term markets. And in my estimation, if you have a decent amount of money along this sector, you have to have this information. It's an absolute must to stay on top of what's happening here. And like we mentioned at the top of the interview, we have something called the dynamic model portfolio, which is a trading portfolio which as I mentioned, we established, published last February 2025 and that portfolio is up over 100%. So that aims to track physical sentiment and charting to give us trade signals, buying and selling to trade this sector. Because even though we are directionally very, very bullish for even the long term, we do have very strong swings to the upside and the downside. It's a very, very tradable market. So that's been a huge success for us. The newsletter is 7.99 a year, which I think is, is a pittance compared to what this sector offers in terms of upside potential. If you have even a small amount of money invested here Patrick Suresna and
- [65:12]
B
I will be back as Macro Voices continues right here@macrovoices.com.
- [65:22]
A
Now back to your hosts Eric Townsend and Patrick Suresna.
- [65:27]
C
Eric, it was great to have Justin back on the show. Now listen, you're going to find the download link for the post game Trade of the Week in your Research Roundup email. If you don't have a Research Roundup email, that means you have not yet registered@macrovoices.com just go to our homepage macrovoices.com and click on the red button over Justin's picture saying Looking for the downloads.
- [65:49]
B
Patrick Justin's take on the 2026 outlook for uranium miners jibes perfectly with my own view on that subject, and it screams out for call spreads or some other bullish options play on the min shares. But there's one gigantic challenge to this market because most of the smaller uranium miners don't have liquid options chains to trade. So how would you express a bullish view that the uranium miners will end 2026 much higher than they started the year?
- [66:18]
C
Eric Justin's Uranium outlook lines up with the bull case, but the setup is challenging here because the uranium miners have been going parabolic over the last month. That makes fresh delta 1 exposure hard to just even if you think that the momentum can keep running because a normal pullback in a frothy tape can be violent and fast. So the obvious solution is to express the view with options and keep the risk defined. The practical problem is most of the smaller uranium miners don't have liquid options chains. So rather than forcing structures into illiquid names, I'd express the trade through the most institutionally tradable proxy in the space, cameco, which is the symbol ccj. So for the trade of the week, I want to look at a bull call spread on Cameco with CCJ trading at $134. We look at the 2-20-2026 calls. We would buy the $140 strike call last trading at $6 and sell the 150 call last trading at $3. That's a 140 by 150 bull call spread for a net debit of $3 or $300 per one lot spread. I'm deliberately choosing the February expiration with 22 days left, which keeps this a momentum capture trade. We're not paying up for a lot of time value when we're keeping the structure tight with the aim of monetizing the near term froth while the tape is still hot. Now, if you're a longer term investor trying to express the full year thesis. The alternative would be a wider, longer dated spread with more Runway, but that comes with more premium outlay and more Vega exposure. So what have we created? We're buying a $10 wide upside spread for $3. So our max loss is $3 debit if CCJ settles below the $140 level at expiration and a max profit of $7 if CCJ trades at or above $150 at expiration. So we've got a defined downside and a greater than a 2 to 1 payoff on premium if the move extends. The whole point is to stay involved in the momentum, but do it in a way that doesn't require you to sit through the kind of drawdowns that comes with being outright long a stock when a parabolic tape finally takes a breath.
- [68:47]
B
Patrick Every Monday at Big Picture Trading, your webinar explains how retail investors can put on our most recent trade of the week. For those listeners that want to explore how to put on these trades in greater detail, don't miss out on a 14 day free trial@bigpicturetrading.com now let's dive into the post game chart.
- [69:06]
C
Dick all right, Eric, let's dive into the equities. What are your thoughts here?
- [69:10]
B
Well, Patrick, risk is sort of kind of back on for the S and P, but the action pales compared to what's going on in metals from gold to silver to copper to rare earth elements. And that very much jibes with my own big picture view that the great bull stock market of the early 2000s is giving way to the greater bull commodity market of the late 2000s. So I used this week's strength to top up in the S and P bear put spread that you described a couple of weeks ago to my full target allocation, achieving an average cost of about $64, well below where it was trading when you shared that trade with our listeners just a couple of weeks ago. Now it might well expire worthless, but I'm happy to pay up to have some downside protection here because I'm extremely overweight uranium miners and they're certain to take a hit in sympathy with the S and P if there's a major correction, as Darius Dale warned us was quite possible in our very first show of the year.
- [70:09]
C
All right, so well, Eric, we're trading at 7,000 and along 52 week highs on this S&P 500. And so we have breath of the market still being reasonably high and we had the start of the Mag 7 earnings at the time of recording, where at least Microsoft, Meta and Tesla are not doing anything crazy and in some cases actually going a little bit higher. This is really important because. Because if there was going to be advance of this S&P 500 to 7100 or 7400, it will need MAG7 participation. They've been quite oversold. We're about to get Apple's earnings. We're going to see how that comes in and we'll see whether that becomes a short term tailwind that allows that market to gravitate higher. Now, where the concern has to be is where there's the technical trigger points. And for systematic trading, whether it's CTA's volume targeting funds or risk parity funds, they are all going to have different trigger points. If this market has a downturn that lies several hundred S and P points away down below 6,800 for most estimates. And so the bulls have a little bit of a cushion here where even if there is some short term downside volatility to retest the 50 day moving average around 6900, the Bulls can actually stay in control of the tape for a bit. It's going to take actually quite a bit of a move here of like the 3,4% variety to start actually getting to that negative level where we could see, you know, selling beget more selling kind of negative feedback loops and liquidity crunches. That point here is that we're going to look for giving the bulls here the benefit of the doubt on the short term. We'll see how the rest of these MAG7 earnings come in and we'll see whether or not we can still see a print up to 71 or 7,400 on their overall overall. There will be a correction in this, inevitably. Will it though, come here in the next few weeks or does it still come from a higher level? We're going to find that out in the next few weeks for sure. All right, Eric, we got to talk about this dollar.
- [72:21]
B
Well, needless to say, President Trump telling the press point blank that he wasn't at all concerned to see the dollar selling off and thought it was a great thing. Well, that sent a shockwave through the markets. But what I find fascinating about this, Patrick, is that the Dixie basically held on to its September 17th low print around 95 and a half and it didn't make a new leg lower in the next trading session the following day. Now, when bad news fails to push the market farther down, that usually marks a bottom. So I'M going to be watching this very carefully. It's not what I was expecting. I thought we did have quite a bit more downside to go in the Dixie, but needless to say, gold and copper didn't stop going up the next day, but the Dixie stopped going down the next day. That disconnect, I think is noteworthy, to say the very least. So I'm gonna be watching this very carefully. I won't be surprised at all if we see at least a bounce here. Unless of course, the president makes even more comments to intentionally push the dollar lower. And I don't think that that's outside the realm of possibility. But barring that outlier case, I'm looking for a bounce.
- [73:28]
C
Well, Eric, there is serious technical damage being done to the dollar, but for me, the key is looking under the hood in that for the first time we are seeing a synchronized the cross currency strengthening against the dollar. And really the key one there was the yen when that intervention happened and that reversal played in that put that last currency into that basket. So we have a US Dollar index that is actually breaking key technical levels. All the previous lows of 2025 have already been broken and the window really at this moment is open for bear continuation to the downside. Technically the next kind of support level, it lies down around the 90 handle where the 2018 and 2021 lows were established. And really at this stage, it would take a miraculous save on the dollar for this not to be the path of least resistance when stepping back and realizing that the last six, seven months was this extended dollar consolidation. We are now for the first time since early 2025 currency markets wake up. And so let's see how this continues to play out. All right, Eric, let's talk oil.
- [74:43]
B
Well, exactly as our friend Dr. Anas Alhaji predicted weeks ago, President Trump apparently backing down, or perhaps I should say intentionally giving the false appearance of backing down from a strike on Iran was probably just biding time to reposition US Aircraft carrier battle group assets into the position needed to mount such a strike. Those assets are now in the med staged for an attack on Iran and the market has been on edge for the last 24 to 36 hours. I'm actually surprised that the $5 or so of geopolitical risk premium that's come into the WTI market wasn't much bigger than it has been so far. And of course Brent tends to show geopolitical risk more than WTI does because WTI is a US Benchmark. Meanwhile, the calendar spread trade that I described several weeks ago buying the CLZ6Z7. That's December of 26th through December of 27 calendar spread at minus $1.75 or $1.75 of backwardation. That trade has performed beautifully, moving out of moderate backwardation into modest contango. And I think it still has quite a ways to go.
- [75:57]
C
Yeah. Clearly Middle Eastern risk premiums are now being put in. The question is that will it trigger more systematic traders being squeezed out of shorts and cause traders to chase this trade, getting a substantial pivot in the liquidity flows that has kept oil repressed at this stage. It wouldn't shock me from a liquidity perspective for us to squeeze even up to the 70 handle in the week to come. I don't know whether that's a long term sustainable or whether it would just end up being where they would rebalance all the different traders that are offside. But at this stage, we have a clear breakout that can, at least on a trading basis, technically follow through. All right, Eric, let's move on to gold. Hot, hot, hot. Everyone wants to talk about this. We've finally seen this parabolic blow away. How do you size this up?
- [76:51]
B
Well, I said last week and exclaimed with, with you know, great enthusiasm. Oh boy. We've got a massive $23 wide unfilled gap which was, wow, fully $250 below the market. That presents a lot of retracement risk. Well, it's nothing compared to this week's retracement risk because just one week later and only 10 days after that gap opened, it's fully $1,000 below the market. Trump's comments on the dollar were the proximal catalyst. He made those remarks while I was recording Justin Hune's interview. And as Justin was speaking, it was hard for me to even follow what he was saying because I was watching my live chart watching gold rally fully $100 just in the time Justin and I were speaking and we're now up almost 600 do on the week at the time of this recording. That means the bull market is still on. But we could easily see $1,000 pullback just to fill that gap in before moving higher. Now, there's absolutely no doubt in my mind, Patrick, this market is headed toward a very ugly blow off top. But does that happen at 6,000 or 16,000 or 26,000? I have no idea. I don't think anybody else does. If the President keeps saying things like he's been saying, it's got a ways to go to the upside But I want to ask your thoughts on this, Patrick. How do we use options here to stay exposed to that upside while limiting downside retracement risk? Because we've got that open gap. And even if you don't believe the market superstition that all gaps have to be filled, look, it is just a very good technical case for a correction here. We're way overstretched. I don't even know what to call this. It's not overbought, it's not extreme overbought. What do you call it? Hyper overbought levels. What do we do to hedge this?
- [78:41]
C
Well Eric, this is the parabolic phase and we're going 5,500. Who knows whether we're going to be at 6,000 tomorrow. Like this thing is just going full parabolic. But when we see parabolic moves, these kind of huge acceleration moves, the one thing that becomes more predictable is time rather than price. And in my mind both silver and gold with them being in this parabolic parabolic phase are likely to have some sort of exhaustion point reached within even a week. And that could be still at higher prices. So what usually comes after this? Well, at this stage we clearly have a squeezing, whether dealer positioning, margin calls or whatever the ultimate catalyst is that's creating this upside surge. Inevitably when the buying exhausts we're going to have a reversion. But with us now rocking marketing well above the 5000 level, the interesting part will be when we do inevitably have a consolidation, do we sustain above 5,000 over a longer period of time and do we see now a new higher elevated level being established for the kind of long term levels on gold? Overall it's very hard to put new trades on unless you're doing structures such as bull call spreads like we talked about earlier on uranium, you can participate with short term spreads. But bey that at this stage it's about waiting for these consolidations and next buy on dips because it's very hard to to be adding positioning into this kind of froth. Now Eric, I want to talk about uranium in this chart. Now Eric, we obviously had a great interview with Justin talking about uranium, but I have this chart up here just showing these uranium futures and this move, including this big shoot up that we had here. How do you size this one all up?
- [80:33]
B
Well, obviously Patrick, Justin's feature interview covered the fundamentals in the subject quite well. So I'll just take an indulgence I can't resist and say we lost a lot of listeners in the end of 2024 and into early 2025 who angrily tweeted that they would never listen to macro voices again because that sub moronic imbecile Townsend just won't shut up about uranium. And of course I just was pounding the table on uranium in late 2024 as it continued to sell off to bargain basement levels. As one outspoken tweeter put it, Eric, why can't you just man up, admit that you were wrong about uranium and move on and stop telling us it's going to be a bull market. You were obviously wrong. I'm giving up on your stupid podcast because you wouldn't shut up about uranium, you stupid expletive. Blah, blah, blah. Well, you know Patrick, If I had $100,000 for each and every one of those jerks who made comments like that. Wait a minute. No, actually, let me do the math. No, actually, if it was 100,000 times each one of those guys, I'd have a whole lot less that I made on the uranium trade since April of last year. Sorry, hecklers. I'm quite literally laughing all the way to the bank. And I'm not laughing with you, I'm laughing at you.
- [81:49]
C
Well Eric, I'm just going to keep this technical. Right now, this huge breakout to $98 on the U308 futures, it really now looks, looks like the measured moves up to 120 to even $140 are in play. Now this is a weekly chart target. This is again like it would be reasonable to see that at some point this year, not necessarily next week. But clearly this new bull momentum has has kind of woken up the the uranium market that has been going through quite a bear market back in 2024 through to early 2025. And this really now is just a full of that bull craze that we had in 2023. All right, Eric, let's touch on copper.
- [82:34]
B
Wednesday's big green candle was definitely helped by Trump's dollar indifference comments, but it also marks an important technical breakout signal. Now, provided that that move above $6 can be sustained through a weekly close, I think this market is headed much higher. And Craig Tyndale's perspective from last week's interview, needless to say supports that view and suggests that it might be a whole lot lot higher.
- [82:58]
C
Eric, Copper consolidated at new highs throughout early part of January and this breakout just set in motion a brand new advance. We're trading at 6:30 at the time that we're recording this. There is now room for us to see 650even$7 on the upside of copper, the way things are moving and the fact that the entire commodity space is so hot, it's got everyone's attention. These commodities that are making these new highs, taking all of the flows. It wouldn't surprise me if this joined the party that we're seeing currently in uranium and gold.
- [83:36]
B
Patrick, before we wrap up this week's show, let's hit that 10 year treasury note chart.
- [83:41]
C
So finally, taking a Look at this 10 year treasury yield, we had the FOMC meeting. As expected, Powell left rates unchanged and it looks like it's gonna stay like that through into the second quarter where we see a new Fed chairman. At this stage, I was looking to see if this FOMC meeting created a reaction in bond markets, but that simply hasn't materialized. Things are very, very quiet. The 10 year yield sitting at around four and a quarter and this might just be a very boring place to be through the first quarter of the year. Still, maybe the jobs numbers or some other type of a surprise have to come in in order to wake up these bond markets right now. This is clearly not where the action is, folks.
- [84:25]
B
If you enjoy Patrick's chart decks, you can get them every single day of the week with a free trial of big pick. The details are on the last pages of the slide deck or just go to bigpicturetrading.com Patrick, tell them what they can expect to find in this week's Research Roundup.
- [84:40]
C
Well, in this week's Research Roundup you're going to find the transcript for today's interview as well as this trade of the week chart book we just discussed here in the post game, including a number of links to articles that we found interesting. You're going to find this link and so much more in this week's Research Roundup. That does it for this week's episode. We appreciate all the feedback and support we get from our listeners and we're always looking for suggestions on how we can make the program even better. For those of our listeners that write or blog about the markets and would like to share that content with our listeners, send us an email@researchroundupoices.com and we will consider it for our weekly distributions. If you have not already, follow our main account on X at Macro Voices for all the most recent updates and releases. You can also follow Eric on Xeric Townsend. That's Eric spelled with a K. And you can also follow me at Patrick Ceresna on behalf of Eric Townsend and myself, thank you all for listening and we'll see you all next week.
- [85:48]
A
That concludes this edition of Macro Voices. Be sure to tune in each week to hear feature interviews with the brightest minds in finance and macroeconomics. Macro Voices is made possible by sponsorship from BigPicture Trading.com the Internet's premier source of online education for traders. Please visit bigpicturetrading.com for more information. Please register your free account@macrovoices.com Once registered, you'll receive our free weekly Research roundup email containing containing links to supporting documents from our featured guests and the very best free financial content our volunteer research team could find on the Internet each week. You'll also gain access to our free listener discussion forums and research library. And the more registered users we have, the more we'll be able to recruit high profile feature interview guests for future programs. So please register your free account today@matt macrovoices.com if you haven't already. You can subscribe to Macro Voices on itunes to have Macro Voices automatically delivered to your mobile device each week, free of charge. You can email questions for the program to mailbagrovoices.com and we'll answer your questions on the air from time to time. In our Mailbag segment, Macro Voices is presented for informational and entertaining purposes only. The information presented on Macro Voices should not be construed as investment advice. Always consult a licensed investment professional before making investment decisions. The views and opinions expressed on Macro Voices are those of the participants and do not necessarily reflect those of the show's hosts or sponsors. Macro Voices, its producers, sponsors and hosts Eric Townsend Townsend and Patrick Ceresna, shall not be liable for losses resulting from investment decisions based on information or viewpoints presented on Macro Voices. Macro Voices is made possible by sponsorship from BigPicture Trading.com and by funding from Fourth Turning Capital Management, LLC. For more information, visit macrovoices.com
- [88:02]
D
SAM.