Uranium reserve
House Appropriations Committee Won't Fund Uranium Reserve According to Eight Capital: https://research.viiicapital.com/Reports/Research/2020/July/Uranium071620.pdf Uranium Sector July 16, 2020 S&P Global Platts: House Appropriations Committee Decides Not Fund Uranium Reserve US House Committee of Appropriations will not provide $150 million in funding for a uranium reserve as requested by the DOE, according to an S&P Global Platts article: House appropriators' decision to not fund uranium reserve is 'really bad news'. We had feared this might be the case earlier this year as COVID-19 recovery became more of an important role for US Govt funds, but as the year went on, we started to believe that it might come to pass as the White House and DOE threw more and more support behind the US nuclear industry and Nuclear Fuel Working Group (we still await the final report). Well, apparently not. At least not right now - the article suggests the Republican-majority Senate may seek to fund in other ways. This decision is somewhat bad news but likely more in optics and impact to specific uranium-based producers than as an overall saviour to the uranium price. It was expected that the US$150 MM budget would cover roughly 1.7 MM to 1.9 MM lbs U3O8, plus conversion services per year. That presents roughly 1% of global demand. We dont believe this news will impact spot prices to a great extent. The risk surrounding the Russian Suspension Agreement that expires at YE20, lack of utility contracting and generally strong uranium fundamentals, particularly in light of temporary Covid-19 related shutdowns, will likely keep uranium prices at levels above US$30/lb U3O8. UxC price was US$32.30/lb on 13-Jul-20. Optics of this decision might ride heavily on US-based producers and development companies. Hardest hit might be Energy Fuels and Ur-Energy who spearheaded the initial Section 232 Uranium Review, mainly because they are the only current operations (excluding Peninsula Energy which is delivering into its own contracts), and nearly 2 MM lbs of demand from the govt might actually have made a dent. Other producers/developers weren't in production anyways, including Cameco (not material anyways). We fear pressure on various US-based stocks as speculating investors pull out: Energy Fuels (EFR-T, BUY, C$3.55 TP) Ur-Energy (URE-T, BUY, C$1.40 TP) Uranium Energy (UEC-US, BUY, US$1.70 TP) Azarga (AZZ-T, BUY, C$0.45 TP) Cameco (CCO-T, NEUTRAL, C$15.00 TP, covered by R. Profiti) Peninsula Energy (PEN-ASX, Not Rated) Laramide Resources (LAM-T, Not Rated) Western Uranium and Vanadium (WUC-V, Not Rated) enCore Energy (EU-V, Not Rated) Arnfield Energy (AEC-V, Not Rated) House appropriators' decision to not fund uranium reserve is 'really bad news' - Authors: Andrea Jennetta, Joniel Cha Washington The recent decision by the US House Committee on Appropriations to not provide $150 million in funding for a uranium reserve requested by the Department of Energy for fiscal 2021 is "really, really bad news" and marks the "demise of the remaining US [uranium mining] industry," an industry source said July 15. "Maybe the Republican [majority] Senate [will] save the day," the source said, referring to the energy and water development appropriations bill for fiscal year 2021 under development by the US Senate. The Trump administration requested in February $150 million per year over 10 years in DOE's fiscal 2021 budget to create the reserve, as was proposed in an April 23 report by the US Nuclear Fuel Working Group.