Uranium – Can America Reclaim Its Seat At Uranium’s Top Table?

Brandon Munro of Bannerman Resources

Recent developments in the uranium space rose to a crescendo recently when the US Department of Energy’s NFWG report outlined some policies to help resurrect America’s competitive nuclear energy advantage.

As a consequence, uranium investors have been left pondering their own positions. A common question regards timescales: when will this document become an effective catalyst of the American uranium industries rise back to prominence? It has already had something of an impact, with uranium securities rallying and the spot price of uranium making a gradual but definitive comeback.

However, when will America be able to elucidate to the market with genuine confidence a commercially viable technological solution to the uranium production conundrum?

This topic was explored in-depth by Crux Investor’s very own uranium expert, Brandon Munro, in a recent interview with us.

Matthew Gordon interviews Brandon Munro, 15th May 2020

Reasserting Strategic Dominance

The case can certainly be made that America is heading back to the table already. While many of the technologies in the States have struggled to prosper commercially, they have continued to be pushed forward and developed as private enterprises.

This is exemplified by the current situation in Australia: the nuclear power debate is totally restricted to SMRs only for several good reasons. There is one SMR reactor that appears to have the greatest chance of capturing the SMR debate because its audiovisuals are superior and it is the most advanced. This is a clear frontrunner. There are other competitive reactors that require consideration too; Bill Gates has utilised his huge profile to capture some imagination from those involved in the debate for his particular reactor product.

The main thing that has been slowing down the growth of the US uranium industry is the lack of availability when it comes to reactor sites. However, the government is now addressing this; they do not require money to the same extent to do this. It’s also not such a big issue for China and Russia. China has already selected a couple of site for theirs.

I think it is going back to the table already. If you look at some of the technologies that have continued in the meantime, they have continued to maybe not prosper, but they’re certainly as private enterprises, continued to push forward. And we’re seeing that, for example, in Australia where the nuclear power debate is fully restricted to SMRs-only, for a couple of probably pretty good reasons. And there’s one SMR reactor that had the best chance of, I think capturing the debate here because its audio visuals were superior, and it was the most advanced. And so, they’re definitely a front runner, but there are others as well. And of course, Bill Gates has used his profile to capture the imagination for their particular product.

What was slowing the US down was predominantly the availability of sites. And they are addressing that. They don’t need money to the same extent to do that. And that’s not such a big issue for China and Russia. And for example, China has already selected a couple of sites for their reactors.

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

Brandon Munro of Bannerman Resources

Uranium – How Much Pressure Will Russia Be Able To Exert On Countries Like Kazakhstan?

Brandon Munro of Bannerman Resources

A much-asked question by investors in the uranium space regards a particular geopolitical issue; namely, what sort of competitive pressure will Russia be able to apply to other uranium producers? Will Russia exert pressure on Kazakh uranium production and ensure that they can access it?

This question was covered by Crux Investor’s very own resident uranium expert, Brandon Munro, in a recent interview with us.

Matthew Gordon interviews Brandon Munro, 15th June 2020

Russia’s Impact On Kazakh Uranium Production

Grant Isaac, Senior VP/CFO at Cameco, made comments a few weeks ago on this exact topic; he has the same view as Munro. Russian is a country that has extensive nuclear exportation ambitions. However, it lacks sufficient domestic uranium program to satisfy these aims. There is insufficient mined uranium production and there is also a deficiency in treating tailings through the Russian uranium enrichment program.

As a consequence, Russia is perpetually looking across its border towards Kazakhstan in pursuit of uranium-based cooperation. There is already a thorough history of cooperation between the two nations, and a long-standing resemblance in social and cultural values. In addition, the the Kazakh economy is comprehensively integrated into Russia as a consequence of Kazakhstan’s reliance on Russian capital. It is also heavily reliant on Russia as an export market for other goods. I don’t imagine Russia will be too concerned about impaired Kazakh uranium production. Russia should continue to have access to all the material it needs.

However, to the south, China will have much more prominent concerns. In recent history, China has been able to buy as much uranium as it has desired from Kazakhstan. However, if the Russian export program continues down the same path it has been treading, China will have some serious apprehension around its supply of Kazakh uranium. There will be uncertainty surrounding how much uranium will be made available to them from Kazakhstan over the medium-to-long term.

Conclusion

In conclusion, it looks like Russia has a lot of economic authority to leverage over its uranium relationship with Kazakhstan. On the other hand, China could be left out in the cold seeking an alternative reprieve.

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

Brandon Munro of Bannerman Resources

Plateau Energy Metals (TSX-V: PLU) – A Light At The End Of The Tunnel For This Uranium-Lithium Player?

The Plateau Energy Metals company logo
Plateau Energy Metals Inc.
  • TSX-V: PLU
  • Shares Outstanding: 99M
  • Share price: C$0.29 (28.05.2020)
  • Market Cap: C$26M

Interview with Alex Holmes, CEO of uranium explorer and lithium developer, Plateau Energy Metals (TSX-V: PLU).

Uranium and lithium have been struggling in recent years. Spot prices have fallen to uneconomic lows and uranium and lithium companies have been struggling to stay afloat.

Plateau Energy Metals has a couple of great uranium and lithium projects, but will they ever see the light of day?

We Discuss:

  1. Company Overview
  2. Uranium: Overview of the Macro and Plans for the Asset
  3. Cash Position and Money Needed for Uranium Asset’s Development
  4. Lithium: A Breakdown of the Project
  5. Lithium Market Overview: Survival Mode vs Building Value
  6. Recent Raise: Are People Believing in a Positive Future for Lithium?
  7. MOU for SOP: Structure and Reasoning
  8. Reassurance for Shareholders Stuck in 2 Difficult Markets

If you are a uranium market spectator, feel free to check out some of the recent uranium articles on our platform as well as one of our most recent interviews with a uranium mining company. While you’re at it, why not check out another lithium interview or another EV-revolution-related article?

Company Page: https://www.bannermanresources.com.au/

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

The Plateau Energy Metals company logo

GoviEx Uranium (TSX-V: GXU) – How Is This African Uranium Developer Progressing?

The GoviEx Uranium company logo
GoviEx Uranium Inc.
  • TSX-V: GXU
  • Shares Outstanding: 439M
  • Share price: C$0.15 (18.05.2020)
  • Market Cap: C$66M

An interview with Daniel Major, CEO of uranium developer, GoviEx Uranium (TSX-V:GXU).

The NFWG report dropped recently, and uranium companies have been clamouring to give their take on proceedings. Major is a seasoned uranium mind. What did he make of the report? He isn’t surprised. He only thinks the document will benefit a few players, while the rest of the document is geopolitical.

What about GoviEx itself? The uranium junior is continuing with its revised PFS at uranium project, Madaouela. The aim is to prove it is just as economic as Cameco’s McArthur River uranium mine in a slightly lower price environment, sub-US$50/lbs.

We Discuss:

  1. Nuclear Fuel Report: Opinions and Insights into Geopolitics, Renewable Energy and Benefits to Non-US Miners
  2. Buying Uranium: Predictions on Price Movement
  3. GoviEx Affected by COVID-19: PFS Reset and Reasons for it
  4. Ablation: A Non-Commercially Understood Technology
  5. Linkwood Loan Repayment: An Update on the Situation
  6. Niger as Jurisdiction: Dealing with COVID-19 and Potential Terrorism Threats
  7. The Numbers: Raise, Cash Position and Burn Rate
  8. The Future: Ideas on JV’s and Partnerships

If you are a uranium market spectator, feel free to check out some of the recent uranium articles on our platform as well as one of our most recent interviews with a uranium mining company.

Company Page: https://www.goviex.com/

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

The GoviEx Uranium company logo

Brandon Munro – Building America’s Critical Minerals Technical Hub? (Transcript)

A photo of Bannerman Resources CEO, Brandon Munro.
Bannerman Resources Ltd.
  • ASX: BMN
  • Shares Outstanding: 1.06B
  • Share price: A$0.04 (27.05.2020)
  • Market Cap: A$40M

A Conversation with Brandon Munro, CEO of Bannerman Resources (ASX: BMN).

We have interviewed Munro throughout this uranium bear cycle; his insights have been incredibly useful for investors. Here is his previous interview.

Our weekly romp through the world of uranium with Brandon Munro, reveals that even in a relatively quiet week, there is much to discuss. Two potential large stories.

1. AOC says she is open, as is Joe Biden, to looking at nuclear as part of the solution for America’s energy. This calms unsettled nerves within utilities as the US elections loom at the end of this year. It gives clues about budgets and eases investment decisions, although we doubt any investment decisions will be made until after the election.

2. Is America trying to build and American Rare Earths Hub? Some big clues this week as Energy Fuels engages Constantine Karayannopoulos and Brock O’Kelley, two rare earth element industry experts who each have decades of experience producing commercially viable rare earth products, to aid in the development and implementation of commercial and technical REE strategies for the new US REE program. Karayannopoulous built and sold MolyCorp for c. $1.3BN, and currently runs Neo, one the world’s largest downstream rare earths businesses. Something big is happening here.

We also discuss the parallels between uranium and rare earths. The geopolitics and global weaponising of access is becoming exacerbated.

We Discuss:

  1. COVID-19’s Effect on Uranium Supply: A Look at Kazakhstan, Australia, Canada and Namibia
  2. Disruptions to the Market and What They Mean for Uranium Investors and Companies
  3. Spot Price Movement: Anticipating the Next Spikes and Throughs
  4. US Government Parties Supporting Uranium: AOC, Bipartisans and Others Affecting Public Perception
  5. Energy Fuels Announcement: Parallels Between Uranium and Rare Earths

CLICK HERE to watch the full interview.

Matthew Gordon: Hey Brandon, how you doing, Sir?

Brandon Munro: All good, Matt. How are you?

Matthew Gordon: Yes. Nice. Yes. Good. It’s been a long week. It feels like a long week already and it’s definitely the end of your week. So, thanks for touching base. But it’s been a quiet one all round, hasn’t it?

Brandon Munro: Yes. It’s got that feel about a week that has just consolidated after probably six, seven, eight weeks of fairly busy news and quite a lot of spot price activity. And you know, we have just had a very gentle uptick in the spot price, Uranium news, companies. It’s just been one of those weeks that has meandered along really.

Matthew Gordon: Meandered along. This is going to be a short one, and I mean it this time, but it is just worth kind of going through some of the things which are affecting the macro component because those things aren’t changing too much. If we look at Kazakhstan, obviously some numbers came out there. I mean, what’s your take on that?

Brandon Munro: Well, we have seen increasing COVID-19 cases in Kazakhstan over the last week, which is not always a trigger for relaxing restrictions as they’ve done. So you can expect from that that they will be cautious going forward. We have seen cases of, you know, 1,500 a day type thing, sorry, 350 a day type numbers coming through. And interestingly, Kazakhmys, which is the largest copper producer in Kazakhstan, they’ve now had to close one of their very big mines near Qaraghandy, and that’s the Nurkazgan copper porphyry mine. So, I think they had 35 cases out of about 1,100 workers, so it became a little hotspot for them and they expect to have it back into production with new shift rosters and all of that type of thing in June. But still, that’s a bit of a warning sign for Kazatomprom and anyone else in the industrial complex in Kazakhstan, that with rising cases, the chance of becoming a hotspot does increase.

So, we have seen continued high cases in Russia, although it is tapering off over the last week. So, I still see that as status quo. I don’t see any reason for the Kazakhs to be popping the champagne corks anytime soon there. And I’d expect to see no reason why we won’t have the Kazakh assets down for the three months that they’re expecting. And we’re a little bit more than halfway into that process now.

Matthew Gordon: Right. Okay. But again, as far as the macro story is concerned for Uranium, that continues to be good news in terms of its reduction of the supply into the marketplace. Should we touch upon some of the other countries as well? Obviously, we have talked in the past about Australia, Namibia and Canada. What are you hearing from them?

Brandon Munro: So, with Canada, first of all, we are still seeing quite a high caseload in Canada. It is tapering off in Saskatchewan; they’re starting to open up again. I think they’ve put down 8th June as the date for restaurants and bars and gyms and so on opening up. But the Northern territory still tells a different story there. So, La Loche, the village or the settlement that Cameco highlighted in their earnings call, they are seeing some level of reduction in cases, but it’s still a community in crisis and there’s little spot fires popping up around the place. There’s another settlement nearby that’s now had 35 cases in a first nation settlement. So I, again, there just isn’t any call for a relaxation of what Cameco has done there until we really see those first nation communities come through this and get over it.

Matthew Gordon: Then Australia, all fine there?

Brandon Munro:  Yes, it’s almost embarrassing to say it, being in Australia; we seem to have really come through this well. South Australia, which is the home to most of our Uranium production with the Olympic Dam and Beverly, they haven’t had a case since 7th May, and I think the last case before that was a couple of weeks before then and they don’t have any active cases left in the state. So, you can effectively declare South Australia free of COVID-19 for now. I mean, of course there’s risks about what will happen when they open up their internal borders into other States and there’s the chance of, I want to say a second wave, but it’s really still a first wave that we would be exposed to. Their main border is with Western Australia to the West and we have also got things pretty much under control; just a couple of cases each week. So, I don’t see any prospects for COVID-related supply disruption, or dramatic supply disruption at those Australian centres.

I would just say that there is still a lot of caution around interaction with indigenous communities, so that is affecting the way that ERA goes about its business. So, they’ve got different restrictions on their fly-in, fly-out and their drive-in, drive-out workforce to try and mitigate that. But the miners generally have adapted quite well now to all of these different ways of handling their shifts so it’s probably just in the irritant category now for ERA and for Olympic Dam.

Matthew Gordon: Okay. And then your territory in Namibia, are you back to work?

Brandon Munro:  Yes. Namibia is back to work. The mines in Namibia have been ticked through that. What they needed to do was present a COVID-19 management plan to the Ministry of Health before they could resume full production. They’ve done that. What we’re hearing on the ground is that neither of those giant Namibian mines are back to full production, but they are back at work. So that’s a good sign for Namibia, which has had fairly devastating economic ramifications from the shut-down, when the shutdown has been very effective at controlling the virus, they only had 16 cases that they’re aware of and now there’s a couple that have popped up in one part of the country. But again, if the testing is an indication of what’s going on in the population, they’ve effectively eradicated it for now. But at some very dramatic cost. And I think it is really heart-breaking to see what that’s done to a lot of the people there who are already on the poverty line or below. You definitely see a lot more impact on people from starvation and other related issues there compared to what they might’ve been facing with the virus itself. Into the longer term that’s going to promote a heavy development agenda and obviously incentivise the government to do whatever it can within its powers to bring on employment and development. So, in the medium term, that’s good for the Uranium industry there as well.

Matthew Gordon: Okay. So, what does all this mean? Okay. So, we have talked before, you know, in the past few shows about the macro stories, flight amount, et cetera. There continues to be disruption, and people are trying to get back to work. But what does it mean for the Uranium sector as a whole? And what’s it going to mean for some of the equities? You know, companies like Bannerman, companies that we, you know, in North America and Africa, what should people be looking for from these companies? Is it just more of the same, or how are you viewing it?

Brandon Munro: So, I think what’s relevant here is this supply disruption has contributed to accelerated destocking. Inventory has been the issue for our sector making a price break out for several years. So even though we have had fairly deep deficits, structural deficits, in terms of what is supplied in the world, primary and secondary versus what’s consumed, it’s destocking or under buying or working off inventories, whichever one of those terms you’d like to use, that’s what’s filled the gap. And that’s what has been necessary in order for the utilities to return to fully buying what they consume. So, if nothing else, this event or series of events, is probably going to take 20Mlbs out of the market. So, there’s 20M lbs of additional destocking. To put that into some sort of context for the viewers, in the US, which is the largest single market for Uranium, they destocked in 2018 to the extent of about 10M bs.

We will shortly have the numbers for 2019, but we think it was pretty similar. So, it has created the equivalent of two whole years of destocking in the US. And most people who look really closely at these numbers, and I’d consider myself in that category, believe that inventory has now returned to historically normal levels. And in certain pockets, it’s less than historically normal. And as we discussed last week, that comes in the context where there’s numerous reasons why utilities would ought to be preferring to be slightly on the heavy side for their commercial inventories right now. And what I was referring to for viewers who didn’t see last week’s show was Euratom and security of supply comments where they were very strong and advising their Euratom member utilities to maintain significant levels of inventory in order to risk manage a variety of different issues: transportation, bottlenecks in the conversion cycle and also in increasing geopolitical risk and potential for mine supply to be unavailable.

So that’s the immediate effect. The secondary effects of this go to sentiment. Now, investor sentiment – yes, that’s one thing, and I think we’re seeing Uranium stocks perform okay. They’ve sort of slowed down in terms of expectations and liquidity and volume and so on. But they have still recovered everything that they gave up to the market after COVID-19 spooked junior resources, at least. But what I really refer to when I say sentiment, is a reason for utilities to revisit their procurement strategies. In particular the procurement strategy of burning off their inventory or selling down their inventory. And at a simple decision, if it was taken more or less across the entire industry to buy what they burn, not to de-stock, not to underbuy any further, that’s going to put a lot of pressure on the structural deficit that without COVID-19 related disruption is still 20Mlbs. That’s more than 10% of the production in the market.

So I think if you look at those two things in combination; the destocking has occurred to an extent now where there is genuine tension and all it requires is the utilities to decide that that destocking has gone far enough and now it’s time to be a genuine buyer of material to cover what they’re burning in their reactors. And from there, demand growth will take care of that as we continue to see supply deficits at a structural level.

Matthew Gordon: So, do you think that people perhaps got a little bit too excited a couple of weeks ago with Uranium equities. The spot price, you know, has seen a significant recovery over the past couple of months. It’s sitting at around what, USD$34/lbs today or yesterday? Do you think that that needs to move much more to give the market further impetus to kind of move forward, or are we going to sort of see it sitting around these levels for some time to come?

Brandon Munro: I don’t think people got too excited, necessarily ,because if you look at where equities are at the moment compared to not only the spot price in absolute terms, but the setup that we have got for the rest of the year, I still think they’re deeply undervalued. What I do think happened is that many investors started this little upturn with unrealistic expectations of what would happen in the very short term. And that’s been a recurring theme in our conversations, for example, and some of the others that you’ve had as well. The expectation that this was the boom, and some of the exaggerated numbers that we have seen in terms of the extent of the supply disruption, we have seen a few commentators either get their numbers wrong or describe them in the wrong way. That’s been caught onto by some retail investors and others who think that this is like an absolute catalyst, and it’s not that. It has not had an effect on spot.

So, I think what we have seen is a slowing in equity prices, partly because there’s been some great profits for anyone who bought the dip, and as they have seen the spot price growth slow, that has been an appropriate time for them to consider taking profits. And also, for those investors who bought with just totally unrealistic expectations of what the trajectory is really going to look to. And so, I think that the setup is very, very strong for fourth quarter this year, and there’s probably going to be a few plateaus in the spot price. It’s going to have a few more lurches. It’s going to come back. But on fundamentals; fourth quarter this year, probably leading in from third quarter, are going to look fantastic. And so, for patient investors who can sit and buy these little mini dips along the way, I think there’s going to be great times.

Matthew Gordon: Yes, I think that’s right. And we have sort of said that for the past 2 or 3 conversations in the past 2 or 3-weeks. I want to talk about something else that happened this week: Alexandria Ocasio-Cortez, she is a representative from Eastern New York, US Representative, very vocal. She is a very young dynamic Democrat. And she seems to know how to use social media to great effect. And she’s come out and said that she would consider, or she’s open to nuclear as part of the green solution, which I think is big. And then the other thing that happened at the same time was that you had 10 across party or bi-partisan senators also call for the extension to the Russian suspension agreement. So, there’s a lot of noise happening in nuclear and therefore Uranium this week in the US, so that is not going away because, and the reason I say that, I think a lot of people were slightly disappointed with the Nuclear Fuel Working Group report. I think others latched on to it and said it was the next great thing. So, it’s definitely, there’s a discussion going on. What’s your take with regards to what’s happening in the United States on the topic of nuclear at the moment?

Brandon Munro: First of all, with the bipartisan comments and call for not only the Russian suspension agreement to be extended or continued, but also to be enhanced and strengthened, I don’t really see that as big news. From my perspective anyway; I thought that was a quite natural next step. It has made news because of its links with the Nuclear Fuel Working Group report that the DOE released a few weeks ago. And when you look through the list of provocateurs there, you’ve got the usual suspects who’ve already been quite vocal: Lindsey Graham, Senator Barrasso, et cetera, et cetera. I don’t look at that list for example and say, ‘Oh my goodness, that person, that’s interesting.’ On the other hand, AAC, her comments really are quite a watershed moment I think. And that is big news that perhaps has been underreported or under-recognised.

And so, if we take a step back, she has represented the vocal radical left and has very demonstrably excluded nuclear from any consideration under the green new deal with a fair bit of support from Bernie Sanders when he was still running at the time. And so, the green new deal was seen as, because that exclusion was seen as a real threat to, well, a threat to the nuclear industry and a threat to logic really, and certainly a strong threat to the achievability of its objectives. How can you possibly exclude what still is by far the largest source of clean energy in the US, and represents 22% of the grid? Now she’s had reason to change that and it’d be really interesting to know if Biden’s influence there and having a more moderating influence has played a role in that. And her comments itself for anyone out there, they should go to it directly, not only did she say that the door is open to nuclear, but she also emphasised that it is a critical part of the discussion, which is about as close as you can get to a backflip there in terms of her policy. And emphasising, I think 3 times in her comments, that the door remains open. That’s from my read, very much about allowing nuclear to come back into that conversation and start the new green deal. And there’s been a number of lobbyists and even community groups and employee groups from nuclear reactors who have proposed an alternative green deal that just has a bit more reality and allows nuclear to play its role.

So, for me, that’s important. It’s important because it is moderating the Democratic position as they start to get closer to the election. It means that one of the most attractive, if we can put it that way, like the most appealing, is perhaps a better way of saying it, one of the most appealing voices on that far left end of the Democrat party is now relatively aligned with the moderate view that Biden’s got towards nuclear. But it also goes to the capturing, I think, a realistic perspective from the younger generation when it comes to looking at what nuclear can do. What we typically see is a progression along many lifetimes where people start somewhat radically socialist and they go through university and they wave flags and they do all of that sort of stuff and they tie-dye their shirts and whatever else it was that you and I did when we were there. And then as reality sets in in life and they realise the hard grind of raising a family and paying bills, they sort of move more moderate and potentially out to the right. So, this is good for assisting the part of the constituency who are still going through that experiment with liberal socialist ideals and had made those ideals synonymous with anti-nuclear. Because the other thing to bear in mind is that subsection of society, they haven’t grown up with the fear of the bomb. And when you talk to many young people, and the stats bear this out in terms of when they segment their surveys about support for nuclear power, in many cases it is a reliance on things that Greta Thunberg is saying, or the AOC is saying, and just wanting to fall into line with the cult or with the movement, if I can put it that way. So this is important, and it’s important for shifting the generalised voter base in favour of nuclear power, and going into the election in November, it is moves like these that will create a really strong positive foundation for nuclear in the struggling US market, regardless of who gets in.

Matthew Gordon: I think it’s a very interesting time. And I think timing has been really important because if you look at people like Bill Gates, he has been banging the drum for a few years now about nuclear, you’ve got the t-shirt-wearing Michael Schellenberg who has been telling this story for a long time now. And then you’ve got things like the Michael Moore film which came out – Planet of the Humans, which I don’t know if you’ve watched, but you should watch. You have? Okay. You know, it’s kind of interesting, the narrative is interesting in terms of things slightly anti-renewable and what the implications are for a nuclear, there’s a kind of realism about what it takes to put all of this, these energy requirements together. And then you’ve got someone you know, young and dynamic like AOC and You know, telling a story to a different audience in a different time. It seems to, That’s why it’s interesting, what your thoughts were. So, it seems interesting that now 10 senators are coming together across party, bi-partisan coming together and pushing the, you know, ‘Made in America’ story, protectionism, security and all of that kind of stuff. And then you’ve kind of got a very sort of liberal, you know, Michael Moore, AOC type approach to this. Nuclear is getting support from a lot of different sides in terms of age groups, you know, institutional versus the kind of social media type thing. So, it is a very interesting, interesting time in that people, I think would better understand what nuclear is capable of. And of course, not everyone’s going to buy it or love it, but certainly the fact that it’s been talked about is good and it’s healthy.

The other thing, so, again, it’s possibly worth coming back to and seeing how that story plays out and develops. But another little thing, I said this would be short, but we always have an interesting conversation, don’t we? I don’t know how we do it. There was an announcement with Energy Fuels this week, because they have, we have previously talked to them about Rare Earths, you know, and it seems to be sort of intertwined with Uranium in terms of the, you know, radioactive material, etc. High value, the security component, strategic, geopolitical importance of it, you know, China being a big consumer of it and processor and et cetera. So there’s is a lot of parallels here, but Energy Fuels announced this week that they had engaged with, I’m going to have to look at this because this is a name which I’m going to struggle with: it says Constantine Karayannopoulos, who for those who don’t know, originally sold MolyCorp for about USD$1.3Bn. He is very big in the sector. I think he then sort of bought out when Molycorp then subsequently went bust and they then bought out Neo from it. And that’s Neo, Linus and Mountain Pass. Those are the 3 big players in the Rare Earth space, so that alignment with a US based company, with a US facility is interesting to me because of the parallels with Uranium. And I’m wondering, you know, what’s going on there? What are your thoughts on Rare Earths as a strategic mineral like Uranium is for the United States? Is that an important move for them or is that just, this is what happens in this industry?

Brandon Munro: No, most definitely. I mean, the parallels are really interesting with Rare Earths. First of all, at a geopolitical level they have similar consequences to industry that Uranium does. So, the dominance, particularly in the heavy Rare Earth sector that China has, and China’s willingness to weaponize it as well. So, if you go back to 2010, you might recall that there was an incident where an illegal Chinese fishing vessel was seized by Japan. And in one of the most interesting, blatant weaponizations of trade, China basically said, send them back or we’re not going to let any of our REEs cross the border for your technology industry. So that’s a reminder for people in the Uranium sector, just how important geopolitics can be. And whilst the concentration of Uranium is not as concentrated as Rare Earth elements, it’s not that far off when you think that four countries produce 80% of the world’s Uranium and the top 8 produced 95% of the world’s Uranium. It’s certainly not Copper or Zinc or something else that’s distributed pretty much anywhere.

The other interesting parallel is that, as you’ve noted, there’s a very strong coexistence of Uranium and Thorium in most REE minerals. So, most REE players need to have a good awareness and some understanding of Uranium and Thorium and radionuclides and all of the risks associated with that. And we have seen a little bit of the uphill battles that we face in the Uranium sector leaking out into the REE sector, such as Linus’s problems in Malaysia with local communities not having enough to do on a Thursday night and banding together to oppose the plant there and so on. So, there is a natural nesting if you like, of Uranium and REEs and I think any strategy that’s designed to safely extract the Uranium out of REE minerals for beneficial use rather than expensive storage just has to make sense.

Matthew Gordon: Yes, I’m intrigued by it and I’m going to try and speak to the CEO, Mark Chalmers next week, but I’m intrigued. It’s just, it feels to me there’s a kind of critical minerals story, a USA critical mineral story building here because the importance of Uranium, the importance of these Rare Earths, etc. I kind of feel that the stars are aligning there, because they, again, they’ll have very similar support in DC, in terms of Senators, or even in Capitol Hill itself, because these are very similar problems that they’re trying to solve. So, but look, one for another day.

Brandon Munro:  There are further parallels as well that we’re thinking about very much in the context of what the Nuclear Fuel Working Group report is driving at. You might recall that basically China said to a number of technology companies, the only way we can assure you access to heavy rare earths is for you to produce in China. And there they were successful in implementing a significant shift of technology production out of the US, out of South Korea, to a degree out of Japan. And all of those countries that just didn’t have heavy Rare Earths were enormously vulnerable. And so, China has got form, and I don’t see any reason why that form of influence on industrial bases won’t be exerted from Uranium. But here’s the interesting catch: China, the boot is on the other foot for China when it comes to Uranium, because unlike REEs where they control 95% of the market, it’s almost precisely the opposite. That will be, over time, they’ll be capable of producing only about 5% of their own Uranium domestically, absent some big discoveries. So, it is just fascinating to look at where the parallels and where the analogues are between those two sectors, so we should come back to it.

Matthew Gordon: We should definitely come back to it because I think that the language, that weaponizing is starting to be seen more. I think the USA is starting to use that language on a lot of topics, not just in the mining space. And I think, you know, the geopolitical component is always fascinating. It’s always interesting. I am sure there is a great book to be written on it as well. But look, Brandon, thanks so much for catching up with us this week. We didn’t think there was much to talk about. We were wrong.

Brandon Munro: Yes. Well either we are very interesting, or I just waffle too much. We’ll let the viewers decide that

Matthew Gordon: None of the above. So, we’re not, none of them. No, it’s not that you’re not interesting and you don’t waffle. I really enjoy it. Okay, well, I better let you get back to your weekend. You’ve got to get home, see the wife and kids, enjoy yourself. Anything planned for the weekend? Fun stuff?

Brandon Munro: Just a quiet one here. I have got a fair bit of work to catch up on. It’s going to be rainy on Sunday, so I have told the kids they can watch a movie and I’ll disappear back into the office.

Matthew Gordon: Beautiful. Good man. Okay, well keep at it. We’ll speak to you next week and see how the world has changed then.

Brandon Munro: Great. Okay. All right. Enjoy your weekend. Cheers, Matt.

Company Page: https://www.bannermanresources.com.au/

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

A photo of Bannerman Resources CEO, Brandon Munro.

Brandon Munro – Kazatomprom Moving Back Towards Production, Cameco Update, And A Look At SMRs

A photo of Bannerman Resources CEO, Brandon Munro.
Bannerman Resources Ltd.
  • ASX: BMN
  • Shares Outstanding: 1.06B
  • Share price: A$0.04 (20.05.2020)
  • Market Cap: A$42M

A Conversation with Brandon Munro, CEO of Bannerman Resources (ASX: BMN).

We have interviewed Munro throughout this uranium bear cycle; his insights have been incredibly useful for investors. Here is his previous interview.

This week we talk about some intriguing topics. Does Kazakhstan’s easing of safety restrictions indicate uranium production is about to start back up?

Then we move into SMRs and the geopolitical race that surrounds them. We talk about examples of application on land and at sea.

We then move into Cameco’s announcement that it will be getting the Port Hope Uranium Conversion Facility back up and running. What could this mean for the uranium space and uranium investors?

Lastly, we cover UR Atom’s recent statement. A must watch for uranium investors and generalists alike.

We Discuss:

  1. Australia’s Successful Management of COVID-19
  2. Kazakhstan Easing Restrictions, Does That Mean a Re-Start of Uranium Production
  3. Russia’s Relationship with Kazakhstan and Possibilities of Influencing Uranium Producers
  4. SMRs: The Geopolitical Race, and the ARDP Report
  5. Conventional vs SMR: Costs, Locations, Infrastructure and People’s Perception
  6. Cameco’s Port Hope Announcement
  7. Selling at Market: What’s Happening with Equities?
  8. UR Atom’s Statements: Importance of Maintaining Inventories and Diversifying Supply

Company Page: https://www.bannermanresources.com.au/

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

A photo of Bannerman Resources CEO, Brandon Munro.

Brandon Munro – Why are some uranium investors blaming Kazakhstan? (Transcript)

A photo of Bannerman Resources CEO, Brandon Munro.
Bannerman Resources Ltd.
  • ASX: BMN
  • Shares Outstanding: 1.06B
  • Share price: A$0.04 (20.05.2020)
  • Market Cap: A$42M

A Conversation with Brandon Munro, CEO of Bannerman Resources (ASX: BMN).

We have interviewed Munro throughout this uranium bear cycle; his insights have been incredibly useful for investors. Here is his previous interview.

Kazakhstan is easing emergency restrictions in some towns but what does that mean for the resumption of production of uranium at KazAtomProm. Munro explains. Also, we discuss what pressure Kazatomprom may be under and from where? Plus, how is Russia coping?

The US Govt is trying to get their seat back at the uranium table, after years of neglect. Will SMR technology be their saviour, and if so how long will it take. This week saw a big announcement with regard to their ongoing Advanced Reactor Demonstration Programme. Big numbers being thrown around. Bigger the US Dept of Energy has indicated.

And what are the Chinese and Russian SMR technologies capable of? We talk about use cases and applications on land and on sea.

Cameco has restarted their Port Hope facility, which was expected by most, but some selling in the market means that perhaps not everyone was pleased with the news.

And, finally, a sober statement by the European Atomic group, EurAtom warns of lack of transport hubs to accept nuclear shipments, lack of investment in conversion facilities and a permanent reduction of uranium and withdrawal from uranium exploration. And commented on that utilities must diversify supply and continue to maintain appropriate 3-years of strategic inventory levels. We discuss what they mean.

We Discuss:

  1. Australia’s Successful Management of COVID-19
  2. Kazakhstan Easing Restrictions, Does That Mean a Re-Start of Uranium Production
  3. Russia’s Relationship with Kazakhstan and Possibilities of Influencing Uranium Producers
  4. SMRs: The Geopolitical Race, and the ARDP Report
  5. Conventional vs SMR: Costs, Locations, Infrastructure and People’s Perception
  6. Cameco’s Port Hope Announcement
  7. Selling at Market: What’s Happening with Equities?
  8. UR Atom’s Statements: Importance of Maintaining Inventories and Diversifying Supply

CLICK HERE to watch the full interview.

Matthew Gordon: Hey Brandon. How are you doing, Sir?

Brandon Munro:  I’m well, thanks, Matt. What about yourself?

Matthew Gordon:  I’m good, but you look like you’re back in the office. Have you been allowed to?

Brandon Munro: Well, I am. Yes, things in Western Australia are going really, really well. We’re getting about one new case per week right now. So, we’ve decided to go back to the office and in fact, the government in Western Australia has told everyone to go back to work and has now made schooling compulsory again from next Monday. So, it’s nice to be back in the office.

Matthew Gordon: That’s fantastic. I hadn’t actually realised that. I spoke to my mother, like a good son should do, on, I think it was last Sunday, and she was saying, I didn’t realise this, but Australia’s had only around a 100 deaths across the board because of the policies that they have implemented. So, you have been managing this extremely well.  And, you know, because I do speak to a lot of Gold producers and others in Australia, and it seems to have gone quite well for you.

Brandon Munro: Well it has, in fairness, I think we’re assisted by just the way that we live in Australia. Western Australia is certainly benefiting from being very remote, and because of that remoteness we’re quite self-sufficient. So, closing the borders was for most people, just inconvenient: lots of loved ones being separated, you know, tragic stories, et cetera. A few businesses being affected by that. But in Perth, for so long, we’ve been such a long way from everywhere that it’s kind of normal. And where your mum is, I mean, Sydney and Melbourne, the States and new South Wales and Victoria, they have had a much greater concentration of COVID-19 cases and represented the majority of the fatalities as well. But they’re also bigger cities. They are denser cities. So, I think the combination of those two things and perhaps the really lovely warm weather that we’ve had has made the job a bit easier.

Matthew Gordon: It has. But we’ve got a nice segue here because Kazakhstan has ended the emergency and some restrictions as well, which obviously bodes well in terms of Uranium production. What is your take on that? Do you think they have come back too early? What do you know?

Brandon Munro: Well, based on the stats, the easing of restrictions seems appropriate. So, let’s just put to one side how solid those stats are for now. But Kazakhstan also benefits from being very low population density. Like Australia, it’s a very big country with a fairly small population. They do have more confined living, more European-style living, but they did lock down both in Nur-Sultan and Astana very, very early, and they closed their borders with China early. So, they took a number of measures that a former Soviet country can do quite easily in terms of the way that people are used to being regulated.

And so, where we’re at at the moment is, they announced it at the beginning of the week that the state of emergency has been lifted and a few of the restrictions have been changed. It’s less like a European lockdown and moving towards being a little bit more like an Australian lockdown. You can go and shop for things other than food now, for example. People can go back to offices if they need to, but we aren’t seeing any return to industrial activities. There’s still a lockdown of the regions there, and the report from the government and the comments from the president seemed to indicate that they’ll be reviewing that on a region by region basis. And as your audience would know, the regions that host the majority of Kazakh Uranium production were some of the earliest effected by COVID-19. So, I don’t see it really meaning anything for Uranium production and the resumption of wellhead development by KazAtomProm yet. It’s something clearly to follow. I think there’s possibly had an impact on equities this week with the headlines seeming to indicate that things are getting back to normal. But talking to people in Kazakhstan, it’s still a long, long way from that. It is the beginning of normalcy, but there’s still many, many steps that need to take place.

Matthew Gordon: Okay. And because if I look at some of the commentary in the marketplace at the moment, there’s a lot of adversarial, negative commentary around Kazakhstan: their impact in the market, the way that KazAtomProm playing this out. I know we’ve had conversations, and you know, you’re a believer and I know you have first-hand conversations with them, but you’re a believer that they are doing what they’re doing for all the right reasons. So, you don’t see them coming back anytime soon? Or do you think that they are going to be under some pressure from wherever to get back into production soon? Because, you know, as we said last week, oil revenues are starting to get bid.

Brandon Munro: There will be some pressure on them to come back soon, and when you read the president’s comments, and as you know I’m fortunate to have an in-house translator of Russian, so when you read the nuance of the president’s comments, they are obviously, like most countries, looking for industrial activity to recommence as soon as possible, but they’re also looking for stability of their currency. They are hoping that any forms of foreign currency can help to offset the impact of oil. So, on the one hand, you might say, look, that will create some level of pressure for KazAtomProm to come back, but you do need to remember that compared to what oil does for Kazakh foreign reserves. Uranium is still a tiny little blip. It’s very important to Kazakh pride because they have got such a dominant position in the Uranium market, but when it comes to dollars and cents or tenge, for that matter, it’s just a small little corner that doesn’t even register double digits when it comes to foreign reserves. And I think they will be very careful. It’s a big logistical mobilisation exercise here. They’ll need to get 22,000 people back operating to get this wellhead development going and they won’t want false starts. They won’t want to half-mobilise and then have, say, a second infection rate come from over the border, for example, one of two borders which are presenting a risk for them. And I think in the context of them having a good commercial basis for a continued shutdown, buffering those negative consequences to their operating business, I can imagine that they will take their time and make sure that they get it right.

Matthew Gordon: Okay. So it is inconsequential – Uranium revenues are inconsequential to the sovereign wealth fund, to the country as a whole; point well-made and well taken. But it does have a huge impact in the Uranium market, equity specifically. So, people and funds I suspect are going to want to see KazAtomProm not producing for some time because it will start putting more and more pressure – these lost pounds in the market is going to put pressure on. So can you, how long can you see them holding out for?

Brandon Munro: That’s how long is a piece of string in this situation. I mean, we could put on a white board, three great reasons why they should try and rush production back and three great reasons why they should hold off. And probably three extra reasons why the government would want them to come back and hold off at the same time, so there just aren’t any real indicators. I mean, one thing we should bear in mind is that their closest neighbour, both geographically but also culturally, Russia, is now going through a peak COVID phase. Their fatality rate is remarkably low compared to similar countries and countries that have a similar way of living. But nonetheless, they have slipped into third place, I think in terms of the total number of confirmed COVID cases. So, you’d expect that would be weighing on the minds of decision-makers, both government and industry in Kazakhstan. And as we’ve seen in other countries, it’s only a matter of weeks before we know if those Russian numbers have peaked and are receding and everything’s back under control. So, if I was making a decision whether it was a for a Uranium project or anything else for that matter in Kazakhstan, I’d be thinking, well, let’s give ourselves another few weeks and just wait and see how things play off on our northern border.

Matthew Gordon: Well, just on Russia, they have had 250,000 confirmed cases, and the official number is 1% but the numbers in Moscow, which suggest they potentially could be 3 times that, we won’t know for a while. And I suspect that Mr Vladimir Putin is struggling a bit because he’s, you know, obviously looking at some kind of constitutional reform process at the moment, and COVID-19 has come along and interrupted this somewhat. And I, you know, I’ve seen a few pictures of him sort of staring blankly at a screen trying to bark out orders and get things moving. But he, you know, he’s been isolating as well. So, I just wonder how much pressure Russia is going to be able to exert on countries like Kazakhstan? That seems to be a much asked question. Do you think that is realistic?

Brandon Munro: Well, I guess the question is, pressure for what ends? Do you mean on Kazakh Uranium production and making sure that they can access that production?

Matthew Gordon: Yes.

Brandon Munro: Yes, interesting comment, and you might have picked that up from some of the comments made by Grant Isaac from Cameco during the week where he pointed to his view, which I share, which is that Russia doesn’t have the domestic Uranium production, either mined production or from treating tails through their enrichment program, to power the full extent of their nuclear export ambitions. And for them, I think they’d be looking across the border at Kazakhstan thinking, well that’s okay. You know, we’ve got a long history of cooperation here. We’ve got a lot of shared cultural values. We’ve got a deeply integrated economy where Kazakhstan is still very reliant on Russian capital and Russia as an export market for other goods and so on. So, if I was Russia, I wouldn’t be feeling particularly concerned.

To their south, however, you know, I think the big question is for China, they have been able to buy pretty much whatever they wanted out of Kazakhstan so far. But if the Russian export program continues in the vein that it has so far, I think China will have to really start asking itself questions about how long and how much of that Kazakh supply that will be available to them over the medium to longer term.

Matthew Gordon: Okay. Well, I think people can look at that, and we’ll put links below to some of the conversations we’ve had over the past couple of weeks with regards to supply-demand. But today I want to talk about something else, which we’ve not talked about, which is SMRs. SMRs, again, it is that geopolitical race; be that Russia and China have got their designs, they each have got their own unique designs; land-based and floating. It seems there are some very interesting options there. And also the US this week has announced, well, I think potentially, it’s been going a while, but this week they made a bit of an announcement off the back, I suspect of the Nuclear Fuel Working Group Announcement a month ago, which is their ARD program, which is their Advanced Reactor Demonstration Program. So maybe we should start with the Americans first, should we do that? ARDP – so what’s that all about?

Brandon Munro: So, I think it is off the back of the working group report, and in fact it was, that report was cited in the press release. So, what they have said is they’re making available USD$230M to try and ensure that there is an American SMR, small modular reactor, technology in commercial operation by 2027. They have allocated a proportion of that to fund programs that are able to get a reactor in operation in five to seven years, in commercial operation. So, if we take a step back, and we have talked about this, but probably not in the last 12-months, America was leading the way when it came to SMRs, they had multiple viable SMR technologies, not just a couple. And because of, I suppose, the industrial capital roots of how American technology is developed, there were lots of competing companies including some very high-profile ones such as Mr.

Gates, and they all had their different technologies, which were all competing, essentially, only against each other. The Canadians had a design, and there were a couple of other designs around, but it was really an American race.

Then what we saw was the Obama administration turning its back largely on nuclear and the relevance of nuclear technology and in favour of a number of different technologies, but predominantly looking to position America in the renewable race and electric vehicles and so on. It was only when Rick Perry came as Secretary of Energy under the Trump administration that we saw some serious revival of these programs. There’s been a number of small funding grants made available. In fact, there was one last week for, I think, USD$27M for some sort of a switch that I don’t even understand that does something clearly important because they’re putting USD$27M towards it. But that’s an example. There’s lots of this going on, but this is the biggest and the boldest and certainly the largest number that’s attached to it. And it has attached a timeframe, which is quite clearly a call to arms that they want to have nuclear SMR technology capable of domestic and international deployment before 2027. And that aligns very well with the various comments made by the Department of Energy, which were summarised in that working group documented a couple of weeks ago.

Matthew Gordon: So, this feels rather like a giant science fair. They’re trying to identify a technology which is obviously proprietary to the US itself, and presumably they will come down hard one technology or another, and there are people who will insert themselves into that food chain along the way. But USD$230M is not a lot in the context of things. It sounds like a lot because the Nuclear Fuel Working Group, you know, they talked about USD$150M a year, and we don’t know where that’s being allocated. Isn’t it time for the US to start joining up these programs? Start to, you know, do what I think the Nuclear Fuel Working Group, we’ll call it a policy document, because I think some people are branding it, a policy document that shows intent, isn’t it time they sort of brought all of these departments, agencies together, and consolidated their budgets because it’s just all a little bit piecemeal, isn’t it?

Brandon Munro: I think the government approach is really reasonably centralised. You have got the Officer of Nuclear Energy that sits within the Department of Energy, and it has been really the dominant supporter in all of this, and they have done a good job. You know, when you consider that they inherited a fairly stale agenda from a Democrat Administration, I think they’re doing a good job. But your point about, is the broader interests of US nuclear technology better served by 2 or 3 competitors who have pooled technologies and pooled resources, rather than having an array of competitors competing for intelligence, competing for technology, competing for markets, et cetera. You know, that’s a debate that’s even being had at a conventional scale nuclear reactor table. And really the Western world, if it’s got a legitimate chance of fully competing with Russia and China on conventional nuclear reactors, they’re going to need to get together and have a standardised nuclear reactor in exactly the same way that China only exports in markets one single reactor of a one gigabyte scale. That’s the one on one. There is also the cap 1,400 which has a larger scale that’s designed to compete with the bigger EPR that France makes.

But the issue is the cost of getting design approvals; even generic design approvals run into the billions in key markets. And the confusion and just the difficulty for regulators of choosing between all of these different designs means that it slows down the process and it makes even a procurement exercise very expensive for governments, and almost prohibitively expensive for private power concerns. So, Russia exports a single reactor design. China essentially exports a single reactor design in the one on one, and this –

Matthew Gordon: Okay. So let me ask, so Russia has been out there for some time, China has been at there for some time America, it looks like it’s just starting the process. How long is that process? When can America start to genuinely say, we’re back at the table, guys. We’ve got a solution here which we think we can commercialise and we’re going to start doing that.

Brandon Munro: I think it is going back to the table already. If you look at some of the technologies that have continued in the meantime, they have continued to maybe not prosper, but they’re certainly as private enterprises, continued to push forward. And we’re seeing that, for example, in Australia where the nuclear power debate is fully restricted to SMRs-only, for a couple of probably pretty good reasons. And there’s one SMR reactor that had the best chance of, I think capturing the debate here because its audio visuals were superior, and it was the most advanced. And so, they’re definitely a front runner, but there are others as well. And of course, Bill Gates has used his profile to capture the imagination for their particular product.

What was slowing the US down was predominantly the availability of sites. And they are addressing that. They don’t need money to the same extent to do that. And that’s not such a big issue for China and Russia. And for example, China has already selected a couple of sites for their Agile Dragons that they plan to do –

Matthew Gordon: Nimble Dragons.

Brandon Munro: Your dialogue of Chinese must be slightly different to mine, Matt.

Matthew Gordon:  Cantonese I’m going with, yes. Cantonese every time. But let’s talk about, I just want to remind people why SMRs are being considered as part of the future here. It’s going to come down to pricing, timing, mobility and tying into infrastructure. Why don’t we talk about some of those things? Pricing – conventional versus SMR.

Brandon Munro: Okay. So, first of all, they aren’t necessarily better value per megawatt of power produced. That’s something that remains to be seen. The hope is that they will be, because they can be produced in larger numbers and they can be produced in a factory. But the point is that they don’t require such a large absolute capital commitment. You don’t have to commit tens of billions of dollars to build a large scale efficient conventional plant. You can nibble away with hundreds of millions instead. And that will make them more competitive to, for example, renewables, that have been implemented in a smaller, more piecemeal fashion. But the factory production is really important here because it goes to several things that have slowed down conventional nuclear power. The biggest one is the perception of delays. There have been delays but they are mainly associated with first of a kind construction. And as we all know, the first motor vehicle of a new range takes several years to develop and once they’re in full production, they take a couple of days, and there’s been an element of that. There has also been a lot of lawfare that has slowed down the construction of conventional nuclear power plants. And also, just the availability of contractors that have got the skills and experience to construct what are still relatively unique and very, very large construction processes.

So, an SMR, the best of them are designed to be built in a factory, transported via conventional means to the site, and a relatively small amount of site works to be done. And that reduces, obviously the construction time risk. It reduces financing risk. It reduces the effectiveness of lawfare tactics by antinuclear campaigners. The fact that their footprint is so much smaller means that they can be built closer to urban centres. They’re less likely to evoke the emotions of interest groups and so forth. So that’s in itself a big advantage.

Matthew Gordon: Talk to me about that because you know, these are much smaller footprint projects true, and that the cost is significantly less, significantly less, but it still needs to be tied into an existing infrastructure. And you’ve just said these could be near or in urban centres. Do you think, emotionally, people are going to want a nuclear facility smack bang in the middle of their city?

Brandon Munro: It doesn’t need to be smack bang in the middle, but you don’t need a 50km exclusion ratio from one. Now, we know that you don’t need that from a well-placed, conventional nuclear power plant either, but it’s hard to convince the populace of that. There are many examples around the world where communities have asked for nuclear facilities to be placed near to them. Sometimes, like in Scandinavia, for as pragmatic reason as they don’t want to commute 50 kms, let alone build the power infrastructure for an unnecessary 50 km carriage of electricity. But just their scale, their design, their enhanced safety features and the fact that they’re totally different to the 1st and 2nd generation nuclear power plants that have had problems at Third Mile Island, Chernobyl, and of course, Fukushima.

So, but I tell you where their most interesting applications are; I think the best, most fervent case for SMRs is immediate, hand in glove, displacement of coal power generation. And that’s because you can pretty much match them up with your existing output of a moderate sized, coal-fired power station. And all of that electricity infrastructure’s all there. It doesn’t need to be rebuilt. It doesn’t need to be replaced. And in a manner of speaking, you could turn the coal station off one day and flick the switch on an SMR the next. And compare that to, let’s just say renewables for example, or hydro, or a large scale, power program that needs to be implemented; you just can’t use the existing grid infrastructure in the same productive way as you can by displacing coal with SMR nuclear.

Matthew Gordon: That’s interesting.

Brandon Munro: The other really interesting case is for remote applications. So, remote industrial applications such as mining centres, and Russia has one of those ear marked for its first land-based SMR. Remote towns, for example, certainly for military applications. So, the US is looking at not only small but mobile reactors so that they can establish a power system for their various campaigns. A highly localised power system that has all sorts of strategic advantages over other forms of power that they would use in that situation. And the big variety that we’ve got of SMRs in the pipeline, there are everything from tens of megawatts up to the sort of modularity that can achieve an entire gigawatt of power as it’s needed. So, there’s a new market for them. And when you look at remote applications that might otherwise be relying on, for example, diesel, there’s a very, very, very strong social, environmental and economic impetus for those types of solutions.

Matthew Gordon: Nice. It’s an absolutely fascinating space in terms of, well, I’m interested in how it will turn out, what those applications are. It’s, you know, they will package it according to the needs. They have got the ability to package it according to the needs. I was reading an article with regards to the RITM 2000, the Russian technology, which that kind of led on to this kind of floating power source. Now, that makes me nervous – ships at sea with nuclear power. Surely that’s a recipe for disaster. That sounds like a really good or bad Hollywood movie happening right there. So what are, because you touched upon it earlier; you said that they have enhanced safety features. So what are those enhanced safety features?

Brandon Munro: Okay. Well first of all, let me challenge your natural fear of floating nuclear reactors for a moment. Because we’ve had extensive nuclear reactors at sea since the advent of nuclear power, through predominantly Naval use. So, the Russians have maintained a fleet of nuclear-powered icebreakers as well because of their power requirements. And so, I think the US operates still 74 micro-reactors for their Navy. Russia doesn’t have quite so many, but they have got more diverse applications, and to my knowledge, and certainly to public record, there’s never been a single incident on any of those. Obviously, Naval ships had had other related incidents and they have had nuclear fuel on them but as far as we’re aware, of the world at large, that’s never created an issue at all. So, there is some precedent, very significant precedent for reactors operating safely at sea. And I could parrot some of the things that have been told to me by the technical experts about why flooding reactors are far safer, or have got simpler safety features to a land-based one, but I think what it comes down to is, it’s two things to do with safety and SMRs. The first one is the real safety features and they have had the opportunity to dramatically rethink all aspects of the production of nuclear power to craft the next generation of technologies here. And in that respect, they have eliminated to effectively zero the potential for accidents and the potential for radiological risks here. And everything that you can think of is included in these reactors. Now, in fairness, that’s the case with the Gen 3 reactors as well, they’re just at a larger scale. So that goes to the second point, which is the perception of safety, and in the nuclear sector to win the hearts and minds of some countries such as Australia, you really need to come out with something different, so, we aren’t talking about why Chernobyl could never happen in Australia, we finally can say that’s a completely different technology. You’re trying to liken a modern nuclear power plant to the Great Fire of London, for example. You know, it’s a dramatically different technology where a comparison just isn’t valid or fair. And whilst technically I can tell you that that’s true for a Gen-3 conventional nuclear reactor, it’s very hard to make that argument for someone who doesn’t spend a lot of time looking at the science of all of this.

Matthew Gordon: Okay. SMRs – very exciting. We’ll put some links in the commentary below and hopefully people can get into it. Get into the detail. Cameco, this week, I’m going to pat ourselves on our backs with regards to Port Hope – they made an announcement this week.

Brandon Munro: Yes. So, they’re returning Port Hope to full production. They want to be back at it fully by the 25th May. And I think what you’re referring to is that we both sort of deduced that as being quite likely from both the tone and the commentary of the Cameco quarterly results. If I remember correctly, we made the observation that the way that Cameco was talking about Port Hope and Blind River was very different to the, the words and the tone that they were using to talk about Cigar Lake, and we didn’t expect that that four weeks would carry on any further. And so, as it turns out, it hasn’t. And I think what we can glean from that is interesting for what it talks to their intentions behind Cigar Lake. First of all, the way that they described that shut down at Port Hope in the first place was very different. They were keen to get the message across that it was a pre-emptive move. It was to put it in their control. They didn’t want to be turning it on or turning it off. They used language like, ‘these industrial facilities don’t like being turned on and off, and particularly at short notice’. And they made a plan to bring forward some of the summer maintenance program that they otherwise would have had to undertake. So, right from the beginning the language was very different at Port Hope. And then the update that we had with the quarterly report was, the results, was also along those same lines compared with Cigar Lake where I think Tim Gitzil was, you know, genuinely quite upset about the outbreak that had happened at La Loche, which is a first nations community close to their operations in Saskatchewan where I think he said on the call there’d been 50 new cases reported in one day, and he acknowledged that they had employees from that community, and clearly they were all feeling that concern for that community. So, I don’t think Port Hope is any sort of indicator of what may or may not happen at Cigar Lake because they have been characterised very differently from the beginning.

Matthew Gordon: Yes. I was actually quite impressed with their quarterly call. It feels like a company in control. They know what they’re about and how they’re going to get there responsibly, genuinely responsibly. Because again, when we get this feedback, people try and read into perhaps too much, read into the intent. And we get a lot of commentary about KazAtomProm and Cameco controlling the market, controlling pricing in the market, which again, we’ve discussed at length on numerous occasions. I don’t think it could be further from the truth.

Brandon Munro: I agree. They are a responsible company that is doing things for the right reasons.

Matthew Gordon: Yes, absolutely. Now, a little bit of activity in the market this week – there was a bit of selling. There’s a few, I’m not quite sure why, some people said that it might be fund liquidating their position or taking advantage of the price in the market. Have you got any thoughts as to what happened?

Brandon Munro: As far as the equities are concerned, I don’t have a good feel for what’s happening. I’ve got a couple of wild theories, or rather not so wild theories. And if you look at the bounce that Uranium equities have had, they have oversold quite deeply but that was in common with just about all speculative resources stocks, particularly when I look at my watch lists across other commodities, even technology and so forth. But they did make quite a good recovery. I expect with a spot price that’s flattened now, it has come back a little bit. There’s probably some people who bought the dip and who are now taking profits and that doesn’t surprise me. We haven’t seen such big volumes, not in the stocks that I follow, anyway, that indicate a big level of fundamental selling or fund selling. Maybe you’re seeing it differently in some of the other stocks, but I haven’t seen anything that would indicate more than people just going, you know what? On 100% percent of my money in a few weeks, spot price has flattened, it has come off a few cents. Maybe I should just take some of those profits and see if we see more volatility.

Matthew Gordon: I think that’s right. I think that’s right. And that is what we did, you know, the price has levelled out again. I don’t know, I’m not seeing much movement anytime soon in that. And I think, you know, a few people called that: yourself, Dustin Garrow called that. Until something meaningful happens in the market, I don’t think this is going to move one way or the other anytime soon. But we shall see. We shall see – the great famous last words. I don’t want to talk about that with us today, but I do want to make, I just wouldn’t mind your observation on it – Euratom – they made a couple statements. I mean some were a bit obvious and some that surprised me. They talked about a lack of transport hubs, a lack of investment and permanent reduction. So, you know, those comments in the market, I mean, did you any of those surprising? Why did they bother giving that statement?

Brandon Munro: Yes, look, I mean, I didn’t find any of it surprising, perhaps I’m not the right person to ask. When I looked at the report, I think I deal with about half of those people through the World Nuclear Association Working Groups. So, all of these factors I’m quite close to because of what I’m doing there. But to put some of those things in a bit more context, so for the audience, this is basically a security of supply report that is produced each year. It’s not the inventory report that people are looking forward to. We’ve got a couple of weeks before that comes out, although it did make a broad-based comment on inventory where as I expected, and as most people would know in very broad terms, the average level of inventory held by EU utilities is 3-years of supply, and that’s been fairly consistently the case.

And in fact, Euratom imposes legal requirements to hold minimum levels of strategic inventory on its members. And so, the transport issue: they were identifying risks rather than problems that are here today, and so it needs to be looked at in that context. The transport risks, what they talked about is political interference with ports and transport routes to enable the carriage of nuclear infrastructure, whether it’s power, whether it’s waste, whether it’s components, whether it’s construction, et cetera, et cetera. This report was focused more on nuclear fuel, but there is some risk within the EU that interest groups, political or otherwise, they’ll start interfering with that. So I think it was quite appropriate that Euratom get that out in the open, put it in front of policymakers, warn them of the consequences, and they didn’t take the next step, which I think is to do a little bit of lobbying in favour of nuclear transport. I think there’s been 11,000 transportations of nuclear fuel without a single incident in the EU, so that’s pretty good going over a few decades, and a few more people should know that statistic. But I don’t see any present-day concern that that will stop reactors operating, but it’s an increasing challenge that they need to face up to.

Matthew Gordon: The one thing I did take note of in that, sorry to interrupt you, Brandon, was the average inventory levels in Europe of 3-years. And I couldn’t quite work out from the language use whether that was the case now, in which case, we’re looking at utilities sitting on 3-years’ worth of inventory, which is a big clue, or it is suggesting and making recommendations that that is the case.

Brandon Munro: They have traditionally held between 2 and 3 years of inventory. I guess we’ll know the answer to that. I’d have to go back to the report and have a place to look at it now that you raise that, we will know the answer to that in a couple of weeks’ time. It was the, you’re right, the comment was made in the context of holding strategic inventory is a key mitigation that all EU utilities must maintain both to disruptions, potential disruptions from transport that we’ve just talked about, but also, for the 2nd year now, they shone a light on disruption, future disruption of production, lack of investment, they talked specifically about the production of Uranium going offline and not coming back on again. So, there’s a degree of recognition there of the remarkable decay curve that we have in the world’s current Uranium production out there. So, that strong message coming through there was that European utilities would be very unwise to deplete their current levels of inventory. And it’s obviously a message for other utilities in the rest of the world as well. And that goes to what we’ve talked about before, which is whatever causes utilities to stop under buying and destocking their inventories will bring a fairly rapid price response in the Uranium market.

Matthew Gordon: Absolutely. And I think the one other point, and we’ll finish up on this, because I think you’re right – in a couple of weeks’ time, when there’s a bit more information in the market, we should come back into this. But the other thing they talked about, and I don’t think it’s going to be new news to utility buyers, is diversification of supply for, partially because of the reasons we’re talking about here, but also dependence on any one major supplier could be problematic for them, not just physically but geopolitically in this current environment.

Brandon Munro: And it’s worth reading up as well on this point because diversification of supply is one of those things that everyone’s been aware of. But not concerned by over the last few years until quite recently. And for utility buyers, it’s almost like, oh yes, we know we should be diversifying supply, but while prices are this cheap, we can probably stretch that rubber band a little bit. So, the importance of diversification has been a little bit lost in a low price environment, both from a sort of a bargain hunting perspective, I mean people who like a bargain will look past lots of flaws in something if they’re getting it at half or a third of the price that they paid recently. But equally, low prices indicate lots of availability of supply and you don’t feel the risks of an undiversified portfolio in the same way.

So, the language has really changed in this report. It’s recognising, without naming, the various geopolitical tensions that are going on in the marketplace and its timing, straight after the report of the working group, it probably would have been finalised and ready for publication before that report was released. But there’s been plenty in the lead up to the Department of Energy report that would give them the clues and the signals to what would potentially be coming, whether that’s Iran sanctions, the Russian suspension agreement or just an elevation of geopolitical language and rhetoric that’s creating potential supply disruptions here. So, all good, solid advice for European utilities and the utilities, the world over which ultimately will benefit Uranium production.

Matthew Gordon: Yes, and I think that the American producers will be banging that drum loud and clear too, because I think their argument is buying cheap is a kind of false sense of security. You know, it may be good now, but it’s causing them huge difficulties in the long run, potentially. Well, that’s a topic we should get into I think in a couple of weeks’ time. But Brandon, great weekly catch up and thanks for explaining it. I mean, I’m fascinated by this SMR. I’d love to talk to you more about that, the SMR technologies out there and how that plays out.

Brandon Munro: Yes, it’s a big topic. It’s an interesting topic. It’s a moving feast and it’s one of the real big opportunities in nuclear power for winning hearts and minds. And we didn’t even get on to talking about fast breeder reactors, which recycle their own fuel. So, we’ve got something up our sleeve for another slow week.

Matthew Gordon: So that sounds like, well, yes, I think we will have another few slow weeks so we can take advantage of that. Well thanks again. You had better get back to, you look like you’re at work. Is there anyone there or are you by yourself?

Brandon Munro: No, no. Everyone has knocked off, it is a Friday afternoon after all and it has gone five o’clock. I’ve still got a report to get to the board, so I’ll be here for a little bit, but I’m not complaining, it’s just so nice to be here in a quiet environment.

Matthew Gordon: I bet. A change is as good as a rest, right?  And what, I always ask you this on a Friday now, so what is your wine of choice going to be the evening?

Brandon Munro: Oh, you know what? I haven’t even thought about that, but I haven’t drunk any red this week. I’ve been quite busy and so the extent of my indulgence this week has been nicking a glass of white off my wife. So, I reckon, I have a decent 2011 Shiraz Malbec, produced in the geograph wine region of Western Australia by the most incredible people called Barrecas winery. Beautiful, beautiful people. It’s a husband and wife team. They do amazing things with wine and everything else. , I reckon I might phone ahead and ask my wife to just take the top of that for me and get it breathing

Matthew Gordon: Sounds good to me. Sounds good to me. Fantastic. I think I might go for the Lebanese tonight. I think I’ve got a cheeky 2001 Chateau Musar, I think it is got my name on it. It’s a bit early to be talking about that right now, so I may change my mind during the course of the day, but that’s what I’m planning.

Brandon Munro: Yes. Yes. You’ve got time on your side. If I’m going to get a bit of oxygen into that bottle, I’ve got to make a decision fairly soon.

Matthew Gordon: Well, I’ll let you go and do that. Brandon, thanks so much. We’ll speak to you next week.

Brandon Munro: Yes, great. Thanks, Matt.

Company Page: https://www.bannermanresources.com.au/

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

A photo of Bannerman Resources CEO, Brandon Munro.

Bannerman Resources (ASX: BMN) – Can This Uranium Junior Get Financed?

The Bannerman Resources company logo
Bannerman Resources Ltd
  • ASX: BMN
  • Shares Outstanding: 1.06B
  • Share price: A$0.04 (18.05.2020)
  • Market Cap: A$39M

Crux Investor recently carried out a hard-hitting interview with Brandon Munro. He is the CEO of uranium developer, Bannerman Resources (ASX: BMN).

Throughout this uranium bear market, Munro has been an excellent source of uranium knowledge. However, it’s important to remember that he himself is CEO of a uranium junior, Bannerman Resources.

In this interview, we discuss Bannerman Resources. The company has an excellent flagship uranium project, Etango, in a prospective mining jurisdiction, Namibia, but the CAPEX is enormous. If Bannerman Resources can get financed, investors could be on to a uranium winner. Can it? Let’s unpack this…

We Discuss:

  1. Company Overview
  2. The Uranium Market: Supply & Demand Fundamentals
  3. Etango Project: What Have They Got?
  4. $800M to be Raised by a $40M Company: How? What is Plan B?
  5. Update on the DFS: Why it Won’t be Completed
  6. Geo-politic Tensions: Penalties for Partnering with Chinese Funds?
  7. Namibia as Jurisdiction and Potential of M&A
  8. Securing Partner Interest: Grades, Uranium & Share Price, and Contracts
  9. Cameco and Kazatomprom Leave Little Chance for Juniors: Opinions and Insight
  10. Team Experience and Track Record: Are They Prepared?
  11. Future Possibilities and Reasons for Optimism
  12. Timings for Progression and Means of Getting There
  13. Management as Shareholders: Still Buying?

If you are a uranium market spectator, feel free to check out some of the recent uranium articles on our platform as well as one of our most recent interviews with a uranium mining company.

Company Page: https://www.bannermanresources.com.au/

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

The Bannerman Resources company logo

Ross Beaty – Mining And Investment Expert Shares His Secrets

A photo of Ross Beaty

Crux Investor recently had an incredibly informative conversation with Ross Beaty, Mining Investor and Entrepreneur.

Ross Beaty is a renowned mining mind. Investors in the mining space will likely already be aware of his highly-successful career. Investors need to learn from the best, and that’s exactly who they will hear from on CruxInvestor.com.

Beaty shares some of his business strategies and secrets. He also gives our uranium viewers plenty of inside knowledge about the uranium sector and what to expect from the rest of 2020.

This is a great interview that we’re very happy with. We think you will be too.

We Discuss:

  1. Nuclear Fuel Report Announcement: Opinion and Expectations
  2. Time of Benefit to Uranium Miners: Anything to Look Forward to?
  3. Building the Reserve: What it Means for Producers
  4. Supply and Demand Fundamentals: A Singular Source of Clarity
  5. Price hits $30: Will it Hold, Rise or Drop Away?
  6. Cameco: Contracts, Terms and Delivering Results
  7. Identifying Winners and Losers: Knowledge of Putting Together Deals
  8. Mood in the Market: Optimism for the Future
  9. What Will Make Generalists Come Back to the Uranium Space?

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

A photo of Ross Beaty

Dustin Garrow – Exploring The Intricacies Of The Uranium Space

Homer Simpson, nuclear safety advisor for Springfield Nuclear Power Plant, holds a uranium rod while wearing protective gear.

Conversation with Dustin Garrow, Managing Principle of Nuclear Fuel Associates.

It’s been an eventful few months for the uranium space. Back by popular demand, uranium-expert Dustin Garrow returns to the Crux Investor platform to discuss some intriguing areas and shed some light on some nebulous themes.

We start by discussing the Nuclear Fuel Working Group’s report, and what it could mean for the uranium industry, both domestically and internationally.

Then, we move into the fundamentals of uranium supply and demand, including Garrow’s personal projections for the uranium price.

It’s an incredibly interesting watch for uranium investors and generalists.

We discuss:

  1. Nuclear Fuel Report Announcement: Opinion and Expectations
  2. Time of Benefit to Uranium Miners: Anything to Look Forward to?
  3. Building the Reserve: What it Means for Producers
  4. Supply and Demand Fundamentals: A Singular Source of Clarity
  5. Price hits $30: Will it Hold, Rise or Drop Away?
  6. Cameco: Contracts, Terms and Delivering Results
  7. Identifying Winners and Losers: Knowledge of Putting Together Deals
  8. Mood in the Market: Optimism for the Future
  9. What Will Make Generalists Come Back to the Uranium Space?

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

Homer Simpson, nuclear safety advisor for Springfield Nuclear Power Plant, holds a uranium rod while wearing protective gear.