Small Uranium Companies May Need to Change Strategies to Survive – Dustin Garrow (Transcript)

Dustin Garrow, former Paladin Director, and industry advisor to Uranium companies, Uranium ETFs and Uranium Funds, was involved in writing the WNA Nuclear Fuel report, especially the uranium chapter. A lot of investors on social media are seeing the findings of the report as a signal for a recovery in the uranium price. We ask Dustin Garrow if this a realistic assumption.

Analysts say there needs to be production at higher price. This report says ‘yes there needs to be more investment in the fuel cycle and particularly uranium. So everyone is saying the same thing. The Demand forecast marginally positive. Dustin tell some of the factors for altering the data from companies to show a more realistic outlook.

Will some of the junior uranium companies fall off the cliff if the price discovery takes longer than hoped. How will their strategies need to change?

Certainty is still not here, but the mood is more positive. Dustin Garrow saw 10-12 investment groups which is more than have attended more many years. Not a lot of the US utilities. He talks about conversations with generalist investors. And also an update about the 90 Day Working Group.

The report has previously had a reputation of being vague. But a lot of hard work has gone in to making it a little bit more commercial. But still avoids talking about the economics! It doesn’t talk price. Surprised, we were. But it does now discuss long-term contracts and term market.

Did you know that the EU and US represents over 50% of the uranium requirements. 1.9 billion pounds of uranium, and 90% was on long-term contracts.

Interview Highlights:

  • WNA Expectations
  • WNA Fuel Report: What Will it Do For The Market?
  • Current Mood in The Market: When Will Price Discovery Happen?
  • Struggles of Raising Funds in The Junior Space
  • Investment Hacks: What Should You Look Out For Before Investing?
  • Buying Physical Uranium: What Should You Know?

Click here to watch the interview.


Matthew Gordon: It has. We, like you, have been trotting around, meeting people, interviewing people at the WNA Symposium London, getting a sense of what the mood is. What do you want to get out of it?

Dustin Garrow: I think an important part is the biannual market Fuel Report from the WNA. I happen to have been involved in the uranium chapter. And the initial reactions have been very positive from outside organizations and people. I think the report reflects more of the concern of some of the fuel cycle participants. And it goes not just to uranium, but also the conversion side. I think the industry perspective now is more in line with what I’ve been seeing, particularly in the uranium side, on the supply issues that are looming.

Matthew Gordon: The WNA Fuel Report comes out every two years. It has had a reputation of being just a little bit vague. It paints a broad picture. But this year, a lot of hard work has gone into it. And we’ve met some of the authors of that. You were involved as well. It’s just that little bit more commercial. It’s getting to where it needs to be. You were involved with the uranium component. What was the brief?

Dustin Garrow: I’ve been involved in the report for many series of it. It was originally designed as an internal communication document. It wasn’t nearly as critical as to how it was put together. And the other thing is you can’t talk economics, can’t talk prices for anti-competitive reasons. But then it became the industry position, as particularly more investor groups, began to look in the uranium side. So, there’s been that lengthy transition. Still can’t talk economics. But it now it addresses things like the need for long-term contracts. There is still a big hurdle at this point. A lot of companies are at the starting gate in various forms, but without the utilities committing to more than a 2-3 forward year agreement, they can’t raise financing. It’s now being recognized, the term-market, it’s role in this industry. I looked at the US and the EU deliveries since 2000. There’s really good data on both the regions, which represents more than 50% of uranium requirements. Over that period, they’ve taken delivery of 1.9Bn lbs of uranium and 91% was under long-term contracts. So, the idea that the utilities rely on the spot market just doesn’t reflect reality. They still buy about 20Mlbs a year in the spot.

Matthew Gordon: It talks about long-term contracts which is a really important part of the industry for sure, but it’s not giving any indication around price because it can’t be anti-competitive.

Dustin Garrow: So you say things like ‘adequate’. And that depends on the specific company. What’s adequate for a Cameco is not adequate for a new build project somewhere else. But it’s a crucial element in the progression of the production facilities.

Matthew Gordon: If I look at people like TradeTech or UXC, they can get into this. And I think is important for commercial reasons that they can get into this. They sell those reports into utilities funds etc. But these interviews are for the ordinary guy like me and you, who want to buy shares in equities. What does this report do for them? Does it give certainty to the marketplace so therefore, people start behaving in a different way and therefore the equities react?

Dustin Garrow: What’s important is a lot of the investment analysts have concluded that there is a need for more production and it will be at a higher price. It has to be because of the economics of the new production facilities. The WNA, without talking the economic side, is saying, y’es, there is a need for more investments in the fuel cycle and particularly uranium’. So now everyone is saying the same thing. Now the contrarian would say, ‘well, now it’s time to look over the other direction’. I think one thing that was brought out in the WNA Fuel Report is the demand forecast. Recently the WNA had a low-case which had demand eventually dropping off. Well, now even the low-case is a positive I think it’s 0.1% growth. But it’s not a drop off. So, across the three cases, the reference case is about 2% growth per year and the higher one is 3.5%

Matthew Gordon: How did that how did they marry this up with the supply case? Most companies will overstate, will be a little bit hopeful about what they’re going to be capable of doing, but they are restricted by a number of factors.

Dustin Garrow: I think what what’s another important thing is there’s more judgment being put into the WNA Fuel Report. In other words, you can take the public statements of all these companies and say, ‘well, his history suggests that it’s going to take longer, it’s going to be slower’, or whatever and more of that’s going in the report.

Matthew Gordon: That’s great news.

Dustin Garrow: So, it’s not like, ‘oh, no, you’ve got to say just public information’. So, there’s some judgment that goes into it from people…Frank Haney, who ran the working group. He’s retiring next year after 50 years in the industry. So, we have some long beards involved.

Matthew Gordon: So that’s the WNA Fuel Report. Generally, very positively received. It’s certainly an upgrade from where it’s been, a lot of hard work gone into it and a lot more realism. Let’s talk about mood. I’ve been speaking to people and I’d say the general mood is positive, without necessarily being certain. It’s better than it was 6 months ago when we first started discovering the world of uranium. I’ve had some fantastically wide-ranging views on when price discovery happens from 3 months through to 18 months. Now everyone’s got a different business model, and everyone has different needs. But the people sitting in the middle are thinking maybe it’s going to happen next year. What are you hearing?

Dustin Garrow: I thought it was interesting that at the WNA symposium I think there were ten or twelve investment groups represented. We’ve never had that before. We’ve had maybe 2 or 3.

Matthew Gordon: And these are generalists?

Dustin Garrow: These are these are the guys that are either going to buy physical or buy inequities. They’re the guys that are going to put the money up for the industry. And someone said last night at a dinner I attended… when you’ve been around in this business so long, you walk in a room and you sense the mood, and it is on that positive side by the producers, either real or those that plan to come into production. The meetings that I’ve had outside of this symposium had been very positive. It’s not, ‘oh, well, what about the Japanese? They’re never going to’…It’s more like, ‘I’m on board now. When is it going to happen?’. The Section 232 in the United States… we had the July 12th memorandum from the President, which some people interpreted as, he had no interest in helping the domestic industry. But if you read his statement, it was ‘at this time’. And now the 90 Day Working Group will come out with some kind of remedy. But it will be uranium conversion, enrichment and probably be pretty neutral regarding the utilities. What’s going to be their exposure? But the point being, it’s not going to affect the general market. It’ll be kind of played out in support of the US government. But I think some of the utilities, particularly in the US, have the big unfilled needs, are saying, ‘well, I still don’t know what’s going to come out’. We’ll have that answer by mid-October. And then I think that they’ll start making their procurement decisions.

Matthew Gordon: We’ve had similar conversations. I think quotas, tariffs, subsidies. No-one knows.

Dustin Garrow: I think that’s all off the table. There will be some form of government support just directly. It won’t limit imports of other origins or anything like that.

Matthew Gordon: Let’s step back and see what happens there. But I think that’s going to be very interesting, obviously, for the US uranium companies. One of yours, Energy Fuels, obviously waiting to see what’s happening there.

Dustin Garrow: I think that activity in the term-market is what’s going to help raise the spot price. So, it’s not going to be the spot price goes up and then there’s term activity. The utilities are already doing their due diligence. They’re contacting suppliers. How much have you got? What timeframe? What kind of pricing are you looking for? That’s a precursor for them coming out. And like one of the US utilities was just in the long-term market, 2021-2025… So, again, they’re starting the process that they’ve not been willing to do because of the price differentials for a number of years.

Matthew Gordon: So, you were at the Eight Capital dinner last night. What were you hearing? What were the questions that are being asked?

Dustin Garrow: Well, no one’s saying, ‘well, is the price going to drop?’. What are the factors that are going to move it up and when do we see those asserting themselves? Now, some of us, we are die hard optimists. We could start to see it before the end of the year. But I think by first quarter, keep in mind, there’s a big conference in Nashville at the end of October, where there’s only like 3 US utilities here. They’ll all be in Nashville; the producers will be there. I think there’ll be much more discussion because we’ll know what the working group recommendation is or outcome. So, we could see some of them will say, ‘well, I’m going to get out there now. I’m not going to wait’. And we could start to see an uptick in term-contracts.

Matthew Gordon: Based on your assertion that you think it’s pretty soon, a lot of companies are going to like that news. Not saying it’s going to happen, just that they’re going to like your view. If that doesn’t happen… we’ve been speaking to a few people and we’ve been interviewing a few people. So, we’ve got a broad sense of what’s happening with it with a junior uranium space. A lot of them are needing to raise capital to keep going. They may get to the end of the year, but that’s it. Do you feel that the funds or the institutions that you’re talking to are ready to have those conversations with these juniors or are they going to struggle?

Dustin Garrow: I think some, because they have a good business plan, good projects, they’ll be able to maybe live on the drip for a while. They’re not going to get that big multi $100M financing done without term-contracts. I think they may be optimistic on how long that takes. It’s not that the price goes up, the next day the phone rings and all the utilities sign big contracts and by the end of the week away you go. It can take months and months. And at some point, the Cameco’s enter the market. And at some point, you’re going to see a lot of activity once you get to a certain degree.

Matthew Gordon: That’s great saying that because I think if I look at the retail following that we’ve got within uranium. Very passionate, very optimistic and patient group of people, very knowledgeable too. But they shouldn’t expect an immediate pop in price. There’ll be a gradual escalation on price. Is that what you’re saying? That could be as well as long as 12 months before it gets to where it needs to be? When does it get to $50?

Dustin Garrow: Well the term-price at $30 we could see $40 very quickly, because I think that’s the next plateau. A bit of contracting by some, then another pop up to $50. Well, how long does that take? Are we dictated to by the utilities when they come on the market? So, yes, by some time. First half of next year should you see a lot of term-contracting activity. And it’ll affect the spot-price. I think we’re within a 6-month window.

Matthew Gordon: I’m going to go back to my institutional days. I’m looking at price, if it hits $40. Most of these companies are still under water at $50-$55. So, in a meaningful way, it doesn’t matter if it is $20 or $40, but for the funds, if they see contracts in place, they have security. They still have to take a guess on what the future holds. And that the company can get product to the utilities. They’re got to say this will get to $55. That’s only break even for some of these companies. Some these companies need to make more than that to be able to pay back anything they have borrowed. So, there’s still a lot of uncertainty in terms of ability to raise capital. Is there not, at this point?

Dustin Garrow: Yes. That’s why some of them are out meeting, a lot of meetings, a lot of discussions and preparation for them. Then you go out and you do your whatever amount of term-contracting. I think the financing is available, but with the right conditions.

Matthew Gordon. We’ve been meeting and talking to a lot of the funds and institutions, and they’re generalists who, as you say, are coming back in and having a look at what’s going on. They’re having to get back up to speed, to understand what’s happening in the market, and they’ve going to take a view on what the future looks like. But, yes, I think the money is there, under the right conditionas. But that is going to come down to 2 quite important things that I’ve discovered in the past 6 months, management teams who have produced uranium and got it into market. Not many of them, right? And then, of course, the basic fundamentals of mining, is this a good asset? Can you get it out of the ground, let alone get it into market?

Dustin Garrow: Well, as you know, we’re having more specific questions. In other words, will a rising tide lift all boats? I think some of the investors that have either been in the space or more sophisticated, whatever, are saying, well, now of this group of companies, where should I place my funds? I think probably the primary question that I’m getting back is, ‘I’m on board, I think it’s great, next year. But where do I place my funds?’ And part of it is, like you say, management teams, the experience. And that’s hard to come by these days. Very difficult. There’s just not many veterans left. And uranium is a unique commodity because of the political, social issues surrounding it.

Matthew Gordon: I’ve been calling it in the past few days ‘Mining +’. Mining’s hard enough. Then you have the uranium component, which is a political hot bed. And some of those geopolitical concerns. But without getting at the macro, we all agree that the general consensus is it’s positive, a huge infrastructure needs filling. But if we come back to the management team. There’s about 50-55 companies in the uranium space at the moment. As the market recovers, you’re going to have new entrants coming in. It’s hard to imagine that any of them are going to have relevant uranium experience.

Dustin Garrow: It will be difficult.

Matthew Gordon: So, again, for our Subscribers, that’s something that they need to consider when making an investment decision. A new story doesn’t necessarily equate to capital appreciation, because these new entrants are unlikely to get into production with new management teams with no experience. Not impossible, just unlikely.

Dustin Garrow: During the last uplift, there were like 400 / 500 companies. I was at PDAC and everybody was tacking up a sign. ‘We also do uranium’, on top of everything else. And geologists with some drill logs they were they were getting funded. I think this time around it will be more difficult, because the questions will be asked, ‘who is behind it?’, peal it to the next layer and. And who’s going to do this? I want names. And that’s going to be a difficult part of the equation for some of the companies to convince funds. And it goes into the term-contracting. The utilities will say, ‘I’ll do a 200,000lbs /300,000lbs contract. I’m not going to do 500,000lbs. I don’t know you guys. I don’t know your project. It’s not built. So, I’m going to be cautious’. So, that means junior companies have to even do more contracts than maybe an established producer, of which there aren’t many left.

Matthew Gordon: Yes. A few things going on there. If you don’t have anyone who’s produced or been involved with producing uranium before, as an investor, you’ve got to think twice because it’s complex. It is not just drilling holes in the ground, finding it, digging it. It’s not that simple. There’s what happens afterwards. The bit that you’ve got a huge track record on was, I’m not selling you by the way… I’m just referencing that you have huge experience in this, the contract side of things. That’s not easy because, time comes into this. There are buying cycles. Term-contracts are 5, 7 years, aren’t they?

Dustin Garrow: They come in cycles. And just as a quick side note, when we did the bankable contracts for Langer Heinrich, the banks laid out very specific requirements. How much volume? At what price? Over so many years. So, we had to then construct a contracting plan that met all those needs. And sometimes you have holes and the banks go ‘fill the hole before I’m going to press that release of funds’. So, there’s more to it than like I said, the phone rings and you pass around contracts and you’re done. Won’t happen that way. It’s not to say these other companies can’t be successful. It just may take a bit more time. They may have to be more flexible in contracting.

Matthew Gordon: I think the phrase I heard yesterday was that ‘they don’t know what they don’t know’.

Dustin Garrow: And it’ll come to their front door.

Matthew Gordon: And that takes time. And that takes money. And sometimes they can’t fix it. So, a lot of things to be cautious of as an investor in the uranium space, unless you get a team that’s been there, done it before. I think that’s important because a lot of people, generalists, I’m not talking about the wonderful uranium crowd that have been in there through thick and thin over the last two years. I’m talking about generalists coming back home when uranium does kickback, will need to understand that. It’s not a case of all boats float on a high tide. I fundamentally disagree with that statement. I think all boats float for a while. And then the inevitable happens, they sink. So that’s great if you get it on the way up. But if you’re if you’re left on the boat, you’re in trouble.

Dustin Garrow: TradeTech, one of the two long time industry consulting firms has just put out a study on production. And it goes beyond, ‘well, here are the costs’. They look at full cost because a new project’s not going to be built on cash costs only, but then they try to look at what are the impediments? What about the secondary licensing? What about the mine plans? What about contract? Have they gone out and approached the market? Are they ready to do that? So, it’s kind of a guideline, a cookbook, to look at and go, ‘well, you know, just because you’ve got the best technical project, you may not be in the first mover group. You may not veto the third’, because of where the projects located for a number of reasons. So, the industry is trying to help some of the consulting firms in that regard.

Matthew Gordon: But that’s fine for people like you and me. We can afford that report. I saw it yesterday. Great report. And we can interpret that and extrapolate what we want from that for retail, family office, high net worth. They’re not going pay for that report. They don’t have access to that. They’re going to have to trust the information that they’ve got access to. And that’s why I’m interested in talking to people like you, you’ve been around the block a few times. You’ve seen a few cycles, influencers who understand what’s going on in the uranium space. But it can also help bring to light some of these issues. What the company says and what the company is capable doing are sometimes polar opposites. They’re very far apart and that’s the difference between making money and losing money. And that’s important. This is investor’s money. That’s what I care about.

Dustin Garrow: I think money will be made in this space again. I think it will probably be on a more selective basis.

Matthew Gordon: Pick the right team. The right boat.

Dustin Garrow: Yes. And a lot of it’s the right team that can get things done.

Matthew Gordon: Are you seeing any good stories out there? Over the past 2-3 days and over the past six month I’ve heard different business models and I don’t mean physical or ETFs or equities. I just mean companies which are up or coming at it in a different way, which makes sense, or companies which have got all the fundamentals in place. What type of company would you invest in? Or advocate in investing in?

Dustin Garrow: I think you’ve hit the high points, those that can demonstrate some experience in the commodity and mining in general. That always helps. If they’re not totally cash starved at the moment, that’s a plus. It gives them a little more breathing room so they can go out and meet with utilities and lay the groundwork. And if it’s like, ‘well we can’t go out, we can’t talk to anybody, we don’t have any money’, then it’ll be tough for the utilities to put you on their supplier list. When they don’t see you and you may have the best widget, but they can’t see it. The utilities need yellow cake in the can. They aren’t that interested in your share price. They can’t stuff shares or certificates in their reactor. They want to make sure in 2023 on June 1st you’re going to deliver that 100,000lbs, because they work it into their fuel plan. So that’s what they’re after. And so it goes beyond just the investor side. You’ve got to convince the customers that you’ve got credibility, particularly with new projects. If you’re a new person on the block it’s it can be a challenge.

Matthew Gordon: I just talked about something which was buying physical uranium. There’s a company in the UK called Yellow Cake. You’ve got one in North America which is called Uranium Participation Corporation (UPC). How does that work? What is buying physical uranium?

Dustin Garrow: There’s really more than one model and I’ll talk UPC, Yellow Cake. They’re being characterized as sequesters of the uranium. UPC has held their inventory for 15 years. And Yellow Cake, the business model, as you know, I’m chief commercial officer for Yellow Cake. Is to accumulate that inventory at good acquisition cost. The current 9.4Mlbs we acquired at under $22. Buy it and hold it for an extended period, add to it when the stars are aligned correctly to where we go out and raise money, buy more. We’ve got the option with the Kazakhs. And it’s an investment that the investor can make up a bet on the market. In other words, ‘I think it’s going to keep going up. I will accumulate shares’. At some point they may say it’s $45-50, could come off. Then they’ll take a different decision. But it’s basically that store of value that they can make decisions on.

Matthew Gordon: And it’s based purely on the price of uranium spot that that day. ‘I bought it $25, it’s now at $40, I’m checking out’, because it just happens to be in the form of shares. You’re buying and selling physical product.

Dustin Garrow: But the material doesn’t like come in the market. Now there’s a different group, which there’s 6, 8, 10 investors that have bought physical. Now that means they hold the U308 at a conversion facility. They come in, they add to that when they think the price is going up. And at some point, I think when they say, ‘well, OK, I’ve doubled my money in six months and I’ll sell some of it off’. I think that happened earlier this year. So, that’s a different model.

Matthew Gordon: One is physically selling off, but that’s a group of institutional guys, presumably. The first one you described was there’s an inventory sitting there. So, you can you can buy shares in that. It will continue to sit there. And once you want to sell your share, you can sell it someone else. But the uranium still remains there. It’s not going into the market per se. It’s a security.

Dustin Garrow: Yes, it’s a lot easier than if you buy physical because then you get into the storage accounts. There’s fees, there’s all kinds of things. Not to say that’s a bad part of a three-legged stool, but it’s different. And I know the analysts are really struggling with ‘how do you model that?’. Cameco has mentioned it on their calls. But apparently late last year, that group bought 8-10Mlbs. Could have been more, could have been less. And I’m asked how and when will they sell? At what price? Some might sell at $35. They go, ‘hey, I bought it at $25 I’ll sell it’. That’s a great deal, I’ll go do something else. Others may say this thing’s rate going up quickly. I’ll hold to $50. They may sell at $35 and come back at $40. So, it’s a growing part of the spot market that to some degree you can’t model. It’s like, ‘well, how do we model this? We know what the utilities are going to do. We know the producer buying’. I contend you can’t model it. If it was one person you go, well, I can kind of figure out what they’re doing, but it’s now a diverse group all over the world. South America. Australia. North America.

Matthew Gordon: Right, so if I’m looking at something like Yellow Cake. You buy at $22. If the price goes down. There’s nothing you can do about that. So, the value of what you bought is less than what you paid for it. But your expectation by investors buying shares is that it’s going to go up. So, there’s no equity risk per se, it’s just purely on the products above the ground sitting in containers, Cameco’s facility or wherever it’s held. Whereas equities, a bit more exposure to all the risks below the ground and management decision making and availability of cash. So, it’s just a different risk profile.

Dustin Garrow: So, it allows you to participate in the uranium space by either Yellow Cake, UPC or physical. I understand one of the large banks that’s been involved in buying physical has been providing that service. You don’t have to get a supplier or storage agreement. We’ll do it under ours. So, there’s the entrepreneurial side of that, for a fee. So, then that takes some of the goodness out of it. And then it’s the equities. Everybody says, well I’m going to buy Cameco. Well yes. They’re a fundamental part of the business. But actually their upsides are limited by ceiling prices and defined price contracts. So, if the price goes to above $100, if you look at their sensitivity table, they start to hit a ceiling. Now, on the downside, they don’t go down below about $30. So, they’ve got a collar. And that’s part of their business model. I’m not sure everybody looks at that. They think, well, if the price goes to $200 it great but  in reality Cameco will hit their ceiling.

Matthew Gordon: It’s also not good because there will be a lot of entrants, new entrants in at that point.

Dustin Garrow: I mean but then the different strategy, different risk.

Matthew Gordon: So, to finish off because I know you’ve got places to be, you’re meeting lots of people today. You think uranium people should be looking at it, should be considering as part of their investment portfolio. General consensus is quite positive.

Dustin Garrow: Yes. More and more people are looking. I did a roadshow in April with yellowcake and it was mostly North America. And certainly, we did Boston, New York, but out on the West Coast. Los Angeles. San Diego. So, we see a broader spectrum of interest. And I think it’s waiting on the Section 232 though, we don’t know what that kind of means. But once the green light goes, even if it’s a pale green. I think there’s going to be a lot of investment.

Matthew Gordon: People will be waiting until then, I think generalists are waiting till then, see what that outcome is, whatever it is, some degree of certainty about how to move forward.

Dustin Garrow: Figure out what does it mean and then the utilities will react so you’ll see that term market start to pick up.

Matthew Gordon: Dustin. Good to see you face to face here in London. Enjoy the rest of your time here. I think you’re diving on aeroplane tomorrow. We’ll catch up hopefully in October.

Regrets About Writing the Section 232 Petition? More Pain to Come? We Chat to Uranium Guru Dustin Garrow (Transcript)

Would he do it again? How do the Utilities make decisions about Uranium spot price versus Uranium contract prices. And do the utilities hold the key to unlocking the Uranium spot market and how will sovereigns take control. Who survives, who dies?

Dustin Garrow helped write the Section 232 Petition, now on Donald Trump’s desk, so he knows more than most about Section 232. But what’s his view? And how do you build a Uranium business today? We talk to Dustin Garrow about the issues in the market. Why he is strong on US Uranium companies even though the US does not hold sway on the global stage any more? Find out on CRUX.

Click here to watch the interview.


Matthew Gordon: I just want to kind of set the scene here. You’ve been long in the Uranium market, you live and breathe it. It’s in your blood. And we’re taking advantage of you today to maybe help the listeners and followers of CruxInvestor.com understand what’s going on in the Uranium market at the moment. Would you agree there’s a general acceptance that the 232, which I think you helped draft if I’m not mistaken, with UREnergy and Energy Fuels. Do you think that that has in itself frozen the market? In terms of, utilities are nervous about making any kind of decision until the outcome of that is known. Is that, would that be a fair statement?

Dustin Garrow: Yeah I think that’s reasonable. And just for the listeners’ benefits. One of my clients is Energy Fuels, which was one of the two petitioners so I have a bit of confidentiality, I have to deal with. But yeah, utilities first of all felt that the administration was not likely to upset their nuclear fuel purchasing because some of their reactors are in very difficult electricity markets. And any increase in costs, certainly is not something they would like to see. But yeah, I was at a big conference in Miami in April and talked to a number of the fuel managers and they just said we really don’t know the best course of action here. And a couple of them actually said we really would like to get this behind us, whatever it is.

Matthew Gordon: I want to get onto that side of things because I think the market has discussed at length 232, and what may or may not be in it, you know, what may or may not come out of it. But I want you to talk to me about supply-demand. If we may start with the utilities. These are a bunch of smart guys. They’re actuaries in all but name. And they’re trying to make decisions based on multiple criteria. Can you give us some sort of insight into that decision making that they’ve got to go through in terms that risk mitigation, when they’re buying.

Dustin Garrow: Yeah absolutely. Just keep in mind, the nuclear fuel cycle, just by the nature of the industry, is quote ‘long-term’. So in other words, they have to buy fuel well in advance of when they will put it into their reactor, because it has to go through various processing steps, be fabricated, taken to the site. So you’ve got pretty much anywhere from a year to a year and a half. But they really start that planning well in advance. And so the fuel managers with their risk management groups at the utilities, are having to look well forward and as I mentioned earlier, they protect themselves usually through long-term contract.

Matthew Gordon: What is the long term? What’s the term of the contract here?

Dustin Garrow: So what I would say one today, we did have a US utility in the market not too long ago, in 2018. They were looking for delivery starting in 2020. They would go through 2024 and then they always appreciate a year or two of extension option. So normally they’re looking anywhere from 2-3yrs out and then for maybe 4-5yrs. It is interesting just as a side note, the Euratom Supply Agency just came out with their fuel report. And they said the average contract for their utilities was signed 9 years ago. So keep in mind these are very long-term planning horizons. And so when something like the 232 comes up, they… the proposal is they buy 25% of their requirements from newly produced US Uranium. So that’s a fairly large chunk of their Uranium requirements. So that’s what’s kind of frozen them, if you want, they wouldn’t say that, but it’s kind of hindered their planning, because they don’t know which road to take particularly for future longer-term contracts, not necessarily just spot buying.

Matthew Gordon: So the utilities are… they have a kind of can control on the spot price in the sense that until they start buying, people don’t really know where they stand. So can you just give us a little bit more insight into the sorts of things that are going through their heads. You met with some of them in April. I guess you speak to them regularly. It’s beyond 232, which is the American component to this. There’s a lot of the geographical mitigation of risk. They’re not gonna buy from one source. That would be problematic, I’m sure, or could be problematic, I’m sure.  What are the things that they’re looking for in their contracts?

Dustin Garrow: You know I guess if I have a speciality it’s long-term contracts. And what they want is a diversity of supply. You know they have to take that into account.

Matthew Gordon: What does that mean? What do you mean by diversity?

Dustin Garrow: What I mean is geographic region. So then they’re looking at political risk. They’re looking at transportation issues and technologies. In other words, you can mine Uranium underground mining, in fairly high risk environments like the Athabasca Basin, where they actually freeze the ore bodies or put in freeze curtains to hold water back. And the other is in situ recovery, where they drill well fields. And so that’s Kazakhstan, Uzbekistan. Conventional mines in Africa, there’s Namibia, Niger, Australia. So Uranium is mined globally. It’s not like some of the other fuels that if it’s a coal source, then you know you’re generally linked to something fairly close at hand. Uranium and Nuclear fuel is truly global. And so they have to take into account those sources and then as I said as they move into the fuel cycle, to conversion, enrichment of the Uranium and fabrication, there’s various facilities around the world. So where do they contract? Again under acceptable risk which then drives their, for example, strategic inventory. You know if you’re buying from a region that might be a bit more politically unsettling, you might want to carry more inventory. So it’s a pretty complex calculus they use. Now when I started the US, you usually bought from US suppliers. It was kind of a lot more simple, now it’s truly global.

Matthew Gordon: Yeah, absolutely, the US have kind of fallen by the wayside for whatever reason, for a multitude of different reasons. And we can get into where nuclear sits because obviously Uranium and nuclear sit side by side and it’s very emotional, emotive subject, as I’m sure you’re aware. But just sticking with the utilities just a little bit longer if we may. So the utilities It would be reasonable to say that they are controlling the spot price that moment until they know what’s going on. The spot price is driving the planning for the equities, the public companies that are producing this stuff. And today it’s a mid-$20s say. They need it to be $50+ to be economic. Anything between where we are today and $50 is a moot point. It doesn’t kind of shift the dial in any way. So what’s got to happen? What’s going to happen? Is it’s just 232?

Dustin Garrow: No I think 232 just was a complicating factor. In other words that the utilities were beginning to move into an era… I won’t get into the other parts of the fuel cycle, but their profits have been significantly depressed. So the utilities who looking forward, they’re seeing higher prices. And so they’re trying to come up with a good defensible strategy on how do you cover your future needs in the most economic, and under reasonable risk, parameters. And it’s not particularly easy at this point. So again 232 showed up and they said well this just kind of puts a little stop on what we’re doing. Because a number, and we’re looking at longer-term contracting, and then 232 came in.

Matthew Gordon: With hindsight would you have recommended to those two companies that they do submit the petition. Would you have done 232 with hindsight?

Dustin Garrow: As a producer? Yeah I think as you’re probably well aware, what was happening was these longer term contracts at higher prices. The US utilities paid an average of $39 a pound last year for over 40M pounds of deliveries, in an $24 average spot market. So that the longer-term contracts, which are characterised as legacy, were helping a lot of a number of the producers stay in business. But the utilities have been really hesitant to extend or even negotiate new long-term contracts. And so particularly in the case of the US, you were seeing the industry really… production last year was under a 1.5Mlbs. This year going to be well under 1Mlbs. And so the producers are really looking at a situation where they’re trying to keep the lights on. The other thing quickly to keep in mind the 232 is national security. So in the case of the United States, the Department of Defense starts to play a role because whatever their future needs are, have to be addressed by US origin fuel. You cannot use any Uranium conversion, enrichment from any other country

Matthew Gordon: So that bifurcation in the market does that mean there’s two sets of prices potentially, is the solution?

Dustin Garrow: I think it depends on the volume. In other words if it stays at 25%, then it’s going to be 10Mlbs to 12Mlbs pounds a year. So it becomes a fairly noticeable part. But if it’s somehow smaller President Trump say 6Mlbs to 8Mlbs pounds a year. Department of Defense may start buying some.

Matthew Gordon: Where’s the real cost in this? You know with weapons grade enriched Uranium, 90% enrichment. Where does the cost come? Is it at the Uranium getting it out of the hole stage or is it, you know, all in the enrichment phase, in which case the Uranium component’s, again, it’s irrelevant isn’t it?

Dustin Garrow: It depends on what you’re addressing. If it’s commercial grade Uranium for power reactors, it’s one thing. Uranium is a fairly significant part of that process. Now if you go into the military side, then it’s enrichment, because you’ve got it from its natural state to a very high enrichment.

Matthew Gordon: This kind of and I do promise to the listeners that we’re going get back to picking winners and losers in terms of… But I do want to talk about the strategy and who the winners are going to be with this arena in which we’re playing right now. Which is this space before companies can manufacture, produce Uranium profitably. You’ve got countries, and your friend Mark at Energy Fuels, I think he would argue that there’s a geopolitical story going on here with Russia, with China etc. And then there are obviously the public limited companies themselves who each have their own business models and business drivers and needs. And they’re all global players. Certainly the producers and the ones with cash, they’re global players. So who do you think is going to win? First of all can we talk about the China-Russia component. So what’s going on there? we’ve got these SMR’s which people are offering into places in Africa: we’ll build it, we will run it and we’ll have long term contracts with you. That helps countries like that. You’ve got all sorts of PPP models. How is China and Russia making it difficult for America to get back on to the platform?

Dustin Garrow: Well first of all let’s talk about the Russian side which is again very complicated, very long history. There is in fact the suspension agreement which affected the amount of Russian nuclear fuel that could be imported to the US which has been in place in various forms since 1992 or 1993 and it’s now being reviewed once again. What we’re seeing I think with China and Russia is some competition on a geopolitical front. In other words they’re very active in marketing export reactors now to do that as you point out they not only provide the reactor itself they provide the fuel they take it away. So if you approach a country such as South Africa or Saudi Arabia I know the Russians are talking to the Saudis right now. Once you put a reactor somewhere 60 to 80 year life. So it’s an interesting geopolitical issue which is quite complicated. But what happened with the Russians is they sold a lot of Uranium after the dissolution of the Soviet Union. And so right now the myth that the one part that is a challenge to them is Uranium. So that’s why they’re getting active again in Central Asia. They have their own Uranium production. They have a proposed mine in Tanzania. So the Russians actually I’ve heard are quote short Uranium for domestic uses for export reactors. And so they’re being much more cautious on some of their sales but they have a lot of enrichment capacity. So that’s what they’re selling into the U.S.. So that’s kind of the Russian story. Now the Chinese is different. They’ve been stockpiling Uranium to support their own program. But at times they do sell in this, like the United States but they’ve not been a big factor in the export market they’re producing in Namibia. They have domestic production. They have long-term contracts to buy in Australia and Canada. So they’re really more in a stockpiling mode to support their really significant growth in reactor build.

Matthew Gordon: But right okay, I mean that’s the component. So you’re saying there’s a business component to this but there’s also this geopolitical component which basically means control especially with 60-80 year contracts. You have control over that country’s energy needs and that’s a problem. That’s a problem for U.S. companies right.

Dustin Garrow: Yeah. I mean the U.S. companies first of all we had 2, we had more, we had a number of reactor manufacturers back in the 70s and 80s. And now we’ve got officially General Electric Hitachi and Westinghouse, Toshiba are still in the business. General Electric is kind of really wound down the reactor business. So we’re left with Westinghouse which is effectively controlled by the Japanese. So when you look at some of these projects you know the Russians and the Chinese will come in and not only do they offer the reactor and the ancillary services they will finance it so they will provide the necessary capital. So the U.S. you know Westinghouse has been at a real disadvantage in some of these countries. Now they’ve been successful in China. And you know because China wanted some of all of the technologies so they’ve done that. But yeah I mean you need EXIM bank financing so it’s much more complicated because Westinghouse is not a state owned entity like the exports of Russia and China.

Matthew Gordon: Yes I think, it’s an all-in solution, it’s a one packaged product. You go to the whoever is running the country and you say I can give you whatever 10%-20% of your energy needs like that.

Dustin Garrow: A big part of them yes. And I’ve heard that they’ll just send a bill, you know we’ll produce X amount of energy you pay your annual bill and we take care of everything else. So it would be attractive to some of the countries, to smaller countries in particular.

Matthew Gordon: I’ve seen that with hydroelectric in Asia as well it’s the same sort of packaged product that makes it a lot easier. You pay over a 40 year contract. So is there some degree of frustration with American companies that countries like France or Germany or Australia are kind of aren’t towing the sort of traditional party line of you know we’re going to side with the US here. Everyone’s got their own business interests at heart here. And you know that doesn’t necessarily help in terms of the Entente Cordiale. And we do see it in other areas and obviously with what’s going on in Iran at the moment as well so there’s… You know America was a powerhouse when they spoke people listened. But do you think that’s not happening anymore.

Dustin Garrow: Well that’s one of the topics it just came up actually quite recently that if you don’t have a robust nuclear industry domestically you really start to lose any leverage internationally. Let’s pick on South Korea which was successful in getting a four reactor package in the Emirates which they’re now, the reactors are starting to come on. But they have a phase out program in South Korea. Now it will go for many decades but it’s just like Japanese exports of nuclear technology or equipment. When you’re in, not a phase out, but let’s just say they continue to struggle to bring on more reactors you kind of lose that leverage where you’ve got the Russians and the Chinese the French to a more limited degree doing export reactors. They’ve got a lot more say than if well you know… we don’t have the products or the services or but you know listen to what we tell you.

Matthew Gordon: Yes it’s… I appreciate that it’s a difficult space and difficult time for some of the U.S. players at the moment. So if we may come on to the public companies the producers developers and explorers. now mining’s a tough space. Full stop. But mining Uranium, you’ve got that added emotive content all because of the association with nuclear. People in countries like Spain make things difficult for, I won’t mention names but we know who we’re talking about. You know and all over the world where this nuclear component is slightly misunderstood by some and others will tell you that it’s zero carbon and it’s the solution. Bill Gates putting in a $1Bn of his own money into this. You’ve got polarising views I guess is what I’m coming at. So how do the companies, main players being Kazatomprom, Cameco and then a kind of handful of others in production and then a bunch of explorers in the world. Let’s not forget this is mining because we always forget, we get so excited about talking about Uranium we forget it’s mining with its usual mining problems: finding it digging it out of the ground economically producing it selling it in a market which may or may not be receptive to it in terms of spot price. Can we start with Kazatomprom and Cameco. Are they influencing or controlling price at the moment. I think Cameco is trying to find 9M pounds to fulfil orders for this year alone. So what are they thinking?

Dustin Garrow: Actually much more than that. I think that you know and first of all lets focus on Cameco. Because they are a Western Company, a very large producer made up of two government organisations in the long past. You know I think what happened there, and certainly on the Cameco side, and it was a big surprise I think to the industry when they decided to put McArthur River on care and maintenance which was producing 18M pounds a year in a 150M-160M pound production scenario and say they’re going to buy and you know they’ve been very public to say we are trying to get the price up. So are they manipulating? No they’re basically just saying we’re going to retire available supply and even better because we have long-term contract commitments we’re going to become a buyer in the market. Now there is the, on the Kazakh side, there is a world nuclear fuel market meeting going on at Lisbon as we speak. And yesterday they made a presentation and part of the feedback I got was they said the price is too low. So I mean they’re publicly stating the price is too low. They’ve cut back production. You know what they had planned to do. These are two big producers that are attempting to, not manipulate, to try influence the price so they can stay in economic production because right now if you look at the spot price more than half the world production is uneconomic. Now fortunately for the utilities quite a bit of it is state owned be it China be it you know, Kazatomprom which is now kind of a split between public and private. So you know it’s pretty clear prices have to be higher in order for these… for production to go forward or restarts and certainly new mines which everyone pretty well recognises need to be built. There’s no question you need new capacity as older mines like Ranger in Australia. Rossing  looks like it may get a bit more life because it’s been purchased by the Chinese. $25 – That’s why again most of the producers have longer-term contracts at much higher pricing.

Matthew Gordon: Can I ask a question about this Dustin, because people want to draw parallels to the last uptick where companies like your former company Paladin, just shot to the stars. 10,000x return kind of numbers being thrown around. But the thing that also happened back then was you went from broadly 50 companies to 500 companies. People got excited. We’re gonna all have a Uranium company. But do you feel that this time because this dip in the price has gone on for so long. Do you think there’s scope for certain players, we won’t name names, to go and buy up some of these better Explorers/Developers. Some of the Australian companies I’m thinking of, with assets either in Australia, or Africa or elsewhere. There are some good projects which are quite short of cash. But just hoping this thing, the market changes soon. So how do they survive? Do they go… keep at trying to raise capital? I know there’s a bunch more Uranium funds out there. That’s the good news, like Yellowcake. But how do they keep going? How do they keep the lights on? Do they keep the lights on? Or do a couple of big guys come along and say we’ll just wrap things up now, while times are tough for them, because we know where the market’s going?

Dustin Garrow: I would like to think that some of the big mining companies would kind of re-emerge, and come in and as you say sweep up some of these good mines, that may be suffering financially. What we’re seeing though, is actually the opposite. The big mining companies like RioTinto, that have been in this business 40yrs are now exiting totally. And I’ve not heard of any interest, no matter what they think of where the price is going, of coming back into Uranium. BHP is a bit of a reluctant participant because they’ve got…

Matthew Gordon: Those are super companies. It’s too… this market is too small. Uranium market compared to Gold, compared to Iron Ore. It’s too small. They’re not going to do that. But there must be some mid-tiers with a bunch of cash, thinking this could be interesting?

Dustin Garrow: Yes. But I think they look at the… they’ve either looked at Uranium in the past, and maybe didn’t get involved. And then you had Fukushima and they say they think they’re lucky stars that they hadn’t gotten involved. But yeah you would think there would be some that would say, ‘hey this looks like a very interesting area’. Now I have done a number of investor road shows, for Yellowcake. And I say the investment community in general is very interested in Uranium. And there’s a lot of capital at the starting gate, but they’re saying, ‘232. Let’s see what the outcome is. When does the market move. How strongly does it move up’. And I think it’s to…

Matthew Gordon: But if that’s the bottleneck Dustin, but that’s the bottleneck. If 232 is the bottleneck, all they’re saying is timing. All we’re talking about is timing here. But they have to do some groundwork on basic due diligence on mining companies right. There are going be some good ones and some bad ones.

Dustin Garrow: I would like to say yes I’ve heard that there’s several you know mid-tier mining companies high credibility availability of capital that are doing that. I’ve not heard of a one. You know I think again we’re depending on which media you follow is, either a strong story or it’s going down as fast as you can. So I think that’s part of the problem. It’s a strange commodity. Like you say, the most regulated commodity in the world. The mine that’s proposed for Spain, I understand they have over 120 permits and licenses. You know it’s a gravel pit. It’s not iron ore. It’s really really challenging.

Matthew Gordon: Maybe it’s a discussion for another day in terms of what is the logic that’s going on there. Because that’s an excessive amount of permits by any standard. And I think it’s because it’s Uranium, nothing else.

Dustin Garrow: It’s radiation. And it’s Uranium. It’s not good no matter what. And so everybody in the certainly the government side, they want to make sure, be at local governments, state governments, federal governments. It’s the laundry list is almost endless.

Matthew Gordon: Your backside is covered.

Dustin Garrow: You have the ones with the Uranium in their blood. The one company that I worked for previously, was really set up to when the stars aligned really move forward quickly. The mine in Namibia was put together in a little over a year. And that’s a unique situation.

Matthew Gordon: But the thing that’s changed there. Obviously Fukushima happened, and again I’ve had all sorts of numbers thrown at me with that. But I think with Paladin… it was a massive marketing exercise. But the marketing exercise was to utilities, to get them to see that you’re a good company. You deliver what you say you deliver on time it would be there, because the biggest crime in the utilities space is not ordering and buying product to fill these large reactors. So is that the only difference. The fact that this black swan event Fukushima, and I get Chernobyl and Three Mile Island before that, and the safety numbers around that. But is that the only difference between when you were going around the world talking about Paladin and today? What do companies need to do to get people to be positive?

Dustin Garrow: Well I think you know obviously I lived through Three Mile Island and Chernobyl and all of that. I think what was unique about Fukushima was the Japanese were viewed as a gold standard. They were if you want to name a country, at 54 reactors and for that event to happen, which again took everybody by surprise, and then the aftermath was the shut down of that entire industry sector, and the length of time, like Gitzel at Cameco said nobody thought we’d be 8yrs later and we have 9 operating reactors. It’s been such a slow…. So then you had Germany immediately react. You had some of the Taiwan and we want to get out of this business because it’s unsafe. I think the fact that the tsunami created a situation no one had anticipated, you know cut off fuel to the diesel generator, all this.. we go into the ins and outs of Fukushima. That started everybody stepping back. So you know, you’re basically asking in the absence of Fukushima… well the industry would have I think continued to grow. There would have been… it would have been more orderly, in my mind. You’ve now lost that orderly progression throughout the fuel cycle. It’s not just Uranium, but let’s just look at Uranium. So low-price has caused a lot of capital destruction. Let’s put it that way. And a lot of kind of I think lack of interest.

Matthew Gordon: But do you think it’s also created new technologies? You know people are talking about new technologies within the space, not just the SMR, the small reactors, but the technology… the reactors will last 60yrs, 80yrs now, not 40 years. So that kind of view to safety has been enhanced. And you got people like I mentioned previously Bill Gates, espousing the virtues, and I think even one of Mike Alkin’s friends, Elon Musk would (that’s a private joke). You know, are talking about the virtues of carbon neutral nuclear base-load power. It makes sense. The smart guys are saying it makes sense. But you’ve got this nagging doubt. This historic slightly ageing view of the industry, which you guys are trying to overcome. And so it’s not just 232, and what it’ `s doing for utilities. But it’s that public perception for politicians, like the Germans who are re-viewing their nuclear stance, as the French have done in terms of delaying it. But does the industry need to work harder at the publicity side of things. I mean how do they get people over that hump?

Dustin Garrow: As I’ve mentioned, I’ve been in this business since the first Arab oil embargo, a long time. And because I think the industry was created by highly specialised engineers and utilities. The communication to the general public has not been  strong suit. Let me put it that way. And just leave us alone. We know how to do that, which was, when I got in this business around before 1980. The forecast for the United States was to have a 1,000 reactors. I’ve got that forecast from the Atomic Energy Commission. We got to 10% of that. But that was the thought. This was going to keep the meter. It’s complicated. Unfortunately it came out of the weapons side. And so there was always that uncertainty, I guess, or concern. And so then these events, accidents have just added to that. So going forward, that’s why when you look at the forecast of installed nuclear capacity, it isn’t a negative number. It’s like 1%-2%  growth. And thank goodness the Chinese… now keep in mind at the time of Fukushima, they had 13 reactors operating. Now 45. So this is a program that is on the fast track.  And it’s happening elsewhere, but not in the traditional markets.

Matthew Gordon: Just in terms of getting back to for our retail high net worth and family office investors. Let’s make this understandable for them. So it’s a very complicated arena. It’s a very emotional arena in which people are operating. You’ve got the fundamentals of mining, which you need to understand. You’ve got this Uranium / Nuclear relationship going on. And it’s going through a dip in the cycle. But if you are saying to me, that large companies are thinking twice about buying up equity, other public companies, small public companies, not just the BHP’s, but anyone you say you haven’t heard of anyone thinking of doing this. Why on earth would a retail investor buy into these shares at the moment? Because there’s a lot of noise. And I’ve looked back at videos from 2yrs, 18 months a year ago, and people were saying the same things then as they are now. So if I had 18 months ago invested in Cannabis, let’s say, and was now, I’ve reaped my rewards from that decision, and I was looking to invest in something. Why do you think Uranium is going to take off and when?

Dustin Garrow: Well I think let me reference one of the larger consulting companies in this industry, UX out of Atlanta. They say this demand is kind of behind the dyke. In other words, in the absence, let’s pick on 232, the utilities would have already been out in the term-markets, signing long-term contracts. Some of which would be with these smaller, newer, proposed producers. Now what happens there is, you get smaller volumes. In other words you get a 200,000lbs pa contract instead of 500,000lbs pa because you have to prove that you’re going to be able to deliver. And so the utilities, what they need is Yellowcake in the can. They don’t care what your share price is or anything else. They’ve got to have fuel. So I think what we’re seeing is, as you say, how did these guys survive? How do they hold their breath? Some were on the drip. They’re going to raise a little bit of capital. But then I think that any day we could have a 232 decision, and the utilities, that was my point about talking to the fuel managers, I want to get this behind me, because I need to cover my needs post 2020. In other words it’s not, tomorrow I need to buy 100lbs. They couldn’t care less about that. It’s need to cover 5Mlbs pa starting early 2020s. So what I think is going to happen, actually I think the situation is more attractive, because you don’t have 500 companies saying, ‘oh I can do this’. And I think the investor community has learned lessons. They’ve done their due diligence, and no longer they going, ‘gee who in the 500 are likely…’ You can whittle it down fairly quickly. And it has to do with status of the project. Location. Management. I think some of the companies that have brought in non-Uranium people, have found out that because it’s such a different commodity… and that’s another thing is availability of skilled professionals, management and even at the mill site… let’s put it at kind of the operating site. There is a real lack. And so you really have to step back and say, ‘Well OK let me look at this universe, and I can get rid of…’.  Now rising tide will lift all boats. I think if we start to see a $50 price then you can make some money. But in general, you’ve got to look at during the last uplift it was all Kazakhstan. It went from under 10Mlbs to over 50Mlbs. Because they had all these projects that the Soviet system had defined and were kind of ready to go. And the only other one was Paladin. I mean really when you look at it. Small ISR mines in Wyoming took 5-6yrs because of permitting because… and a key factor is term contracts. Just as another thing to look at. The Kazakh’s transact at the spot price. That’s their official transfer price. But in the West, there’s never been a Uranium project built based on the spot market. It’s always been always from contract.

Matthew Gordon: I hear you 100%. I’m going to make you call the timing on this. When’s it going to get over $50?

Dustin Garrow: Oh I’ve given up forecasting prices a long time ago. It should be higher at the end of the year.

Matthew Gordon: Oh you’re good. You’re good.

Dustin Garrow: I should point out there’s a big gap between kind of $25 and $50, which is really the incentive price. I think we could see a strong move, and then depends on who’s able to get into business, and so it’s going to be an interesting market over the next probably several years.

Matthew Gordon: Okay. Thanks very much for your time. I appreciate it. Lovely to talk to you as always and we’ll speak to you again real soon.

Dustin Garrow: We’ll probably talk right after 232.

Matthew Gordon: Yeah that’s right. Thanks very much.