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Laramide Resources Ltd. (LAM.TO)
Toronto - Toronto Real Time Price. Currency in CAD
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Former Deputy Assistant
Why is investing in US Uranium miners (such as URG, UUUU,...) so appealing?
One of those main reasons is following reason about the coming big wave of negotiations for new long term contracts (a couple of posts needed to explain):
Today the USA has 97 active US reactors (98 reactors begin 2019 from which Pelgrim 1 reactor closed around 1/6/2019)
At first sight the closure of some US reactors in the coming years could be seen as an negative evolution for U demande the coming 5-10 years, but on the contrary the evolution in the last 5 years on the level of planned closure of US reactors improved significantly in favor of future U demand. Let me explain.
In 2019: 2 US reactors will close (Pilgrim 1 (already closed) and Three Mile Island 1)
In 2020: 2 US reactors will probably close (a few months ago it were 3 US reactors but 1 has been saved from early retirement by Ohio bill)
In 2021: 1 US reactor will probably close and 2 other US reactors will probably be saved from early retirement in coming year (a few months ago it were 4 US reactors but 1 has been saved from early retirement by Ohio bill and 2 other US reactors in Pennsylvania could be saved also with a bill in favor of nuclear power plants in coming year)
In fact we have seen a very positive evolution on license renewals and bills passing the save reactors from early retirement since 2015 (New York, Illinois, New Yersey, Connecticut, Ohio, and probably Pennsylvania)
So the anticipated number of reactor closure from 2015 till 2025 improved as more and more State bills were voted to save US reactors from early retirement.
And in the meantime between 2014 and end 2018 11 US reactors received a license renewal for an aditional 20 years to operate till 60years reactors age. And in the coming years other US reactors will probably receive license renewals also (The US government is in favor of nuclear power production)
So while the Uranium sector was depressed, the demand side from existing reactors in Western World (USA, France, ...) emproved significantly.
Why are these license renewals and saved US reactors so important?
Well because now all those US reactors know that they can operate longer what they didn't know in 2014.
So now they will have to look at new long term contracts, what they didn't anticipate in 2014 that they would need to do in 2019-2020-2021.
The existing long term contracts were negotiated taking in account the expiring date of their license! No US reactor made a purchase commitment for U delivery after their license expirement date. So if the expirement date is postponed to a later date, they need to negotiate for new U delivery for this new extra periode of Nuclear power production!!
It's a change in strategy for some US utilities combined with a postponing behaviour for different reasons that will be the cause of a new wave of negotiations of new long term contracts.
I speak about a wave because in the nuclear sector those negotiations come in waves. Previous waves were (2005-2007 (big wave) and 2010 - 2012 (small wave))
The next wave will most probably be a big one and that while a lot of uranium miners went in default or stopped investing in new U reserves to renew the old reserves the last 8 years (bottelneck).
Meanwhile Cameco, URG and others know very well that this big wave is coming and they have been preparing the market for this new nearing wave since 2017/2018, by:
⁃ producing less U then what they need to sell to costumers based on existing contracts between them and the utilities. The uranium shortage Cameco, URG and others are buying on the spot market --> Cameco, URG and others are net buyers of Uranium since 2017/2018 (By drying the Uranium supply up on the spotmarket, they are cornering the utilities for future negotiations);
⁃ putting U mines in care and maintenance (Note that a restart of mines that are a while in care and maintenance can't be put in production in a few weeks. This takes at least a couple of months. It not just turning the switch on!) ;
⁃ Kazatomprom reduced their U production for 2018-2019-2020;
So there is a new big wave of negotiations coming combined with a bottelneck.
This is a strongly bullish situation for the coming months/years (2019-2020-2021) knowing that the uranium cost only accounts for +-3% of the total production cost of electricity. So if a US utility will have to choos between U shortage and paying +50$, they will choos to pay +50$.
And with a bottleneck US miners will get their piece of Uranium demand with or without a quota.
And this part of dynamics in the Uranium market few investors are aware of it at the moment. This is not yet priced in the stock prices of those US miners at the moment.
The Dolly Lammy
Anybody holding Laramide shares over 10 years as I have..?
Fyi. Peninsula Energy (on the Australian Stock exchange), an other US uranium miner with #$%$ ISR mine, had a 35% stock price increase on Monday, after that they already made an important share price increase the week before.We are still a long way from getting to an acceptable value of the uranium sector at +-30$/pounds today$UUUU $URG Cheers
The uranium sector is once again attracting attention and more optimistic forecasts.
Is it time to think about LARAMIDE again?
Bought a huge chunk today at 74 cents!! Looking good! All cashed up and ready to move!
LAM is at .71 today, I have a bid in for .70 I feel that’s a bottom in Jan ‘22
5 years from now? 10 years?
Yahoo Finance Insights
LAM.TO is up 11.29% to 0.34
Larmide resources $LMRXF 0.3892
Last week we had a breakout with one of the biggest volume EVER & up strongly 15%+
The good news, trend confirmed today it will go much much higher in the next few years...
I made a bunch in the 2006 or so...this was the junior tsx company in it’s day and has survived through the worst of times. I’m buying in a little. I got burned by a boom crash uranium cycle in the past but there is only nuclear at this time and China and the USA are getting aggressive..hopefully this is my chance to kill it this time
URA rebalancing now complete, time to buy. Get ready for the uranium bull run!
Yahoo Finance Insights
LAM.TO is up 8.97% to 0.43
About to hit the $1 mark
Yahoo Finance Insights
LAM.TO reached a 52 Week high at 0.38
On sale AGAIN. Bull flag pattern. You all really think $30/lb can last? Lumber has tripled, this will too.
Added more on a dip
LAM devrait monter à 0,32$ cette semaine. L'uranium monte.
I love the managements of this company. well disciplined and don't dilute shareholders easily
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