Hi Glenn,
Thanks for the feedback. In short, there was no discussion on enrichment in Australia. We seem a long way off from being at this point politically. There was also no representation from Government at the event, with focus being on market dynamics now from a bigger picture macro stance, and then specific companies and what they are up to.
The key takeaway for us was that the term contract market with utilities has just stopped because of uncertainties around tariffs i.e. why sign deals when there is no certainty. This can only last for so long, but the important thing is certainty, whatever it is. We often write that markets hate uncertainty, and even when new policies come into play that are not as favourable, the certainty is what really counts, so decisions can be made with known inputs.
We also met with L1 Capital the prior week, and Uranium was discussed. Like us, they are big bulls on the longer-term drivers, however, they did make some solid points about the quality of the listed companies in Australia, relative to the quality of say a Cameco (CCJ US) overseas. Our companies they believe generally, are of lower quality, which is something that we have given more thought to, particularly around our position in Paladin (PDN) which has been hit by several operational mishaps, then an unfortunate weather event.
A more diverse option for the long-term uranium believer is an ETF such as the BetaShares Uranium ETF (URNM) which has exposure to Cameco, Kazatomprom, Physical Uranium, CGN Ming, and Uranium Energy with ASX names making up less than 15% of the ETF. This is something we are considering to alleviate some company specific risk in this volatile space.
