RE:RE:U3O8 Inventory Estimates from Nuclear Fuel AssociatesThat is one way of looking at it teevee. But let me give you another take on it. Kazatomprom needs to make money for the State of Kazakhstan and its people...that is the sole reason it exists. It does not exist to make a profit. Because the enterprise (unlike CCO and other miners) does not need to make a profit all it needs to do is create a stream of revenue. They know the market is down and selling that quantity into the spot market will drive prices down even further. They definitely do NOT want to do that ahead of their IPO......rather foolish to do it in fact. This way by selling to a warehousing company they create revenue for their product and have no impact on spot pricing. I think that is a better explanation of their rationale.
Leaving it in the ground creates no revenue at all. Seeling it to the spot market does create revenue but would very likely drives the price down to well below $21.01 they have sold it to Yellow Cake for. Putting 8 million pounds up for sale on the spot market will likely drive it well below $21.01/lb.
So they get a nice chunk of revenue, do not affect their IPO, do not affect the spot price and keep all the workers working and earning a living mining Uranium. They win...YelloCake wins. Sounds like a good deal to me from their perspective. They ALSO have lots of spare production capacity they can sell at higher prices whe Uranium starts selling at higher contract prices. One final point is that if they sold 8.1 million pounds to the spot market CCO will snap it up at less than $20/lb and sell it into their existing contracts for well over twice that.
I do not think for one minute that Kazatomprom wants to bolster the profits of CCO at their expense.
I slightly different take on it than yours.
Malcolm