Hi everyone,

On Friday Russia announced the ban of enriched uranium (EUP = Enriched Uranium Product) to USA effective immediately.

They will sell it at a higher price at China and India

The consequence is that US utilities just lost a part of their enriched uranium supply for 2025 and possibly beyond 2025 too.

The only way for US utilities to solve this supply issue is to buy more UF6 (converted U3O8) or more U3O8 (natural uranium) NOW to be able to enrich it in 2025.

This is a huge unexpected additional uranium demand in the West.

And in the meantime ALL current uranium producers (KAP, CCJ, Orano, PDN, URG, PEN, ...) are producing less than previously promised. They are ALL selling more uranium to clients than they actually produce today. in other words, they are SHORT uranium and need to find uranium from elsewhere. But from where exactly?

And than now we have the Russian ban...

Soon the only lbs of uranium available will be held by Yellow Cake (YCA on LSE) and Sprott Physical Uranium Trust (U.UN on TSX).

But the Trust Rules of Sprott Physical Uranium trust don't allow uranium lbs sales!

While Yellow Cake only allowed a small part of lbs to be sold to Uranium Royalty Corp and Kazatomprom (In the case of Kazatomprom, it's only a loan of lbs, not a sale!).

The only way utilities have to get the lbs of Yellow Cake and Sprott Physical Uranium Trust is through a 100% takeover

Source: Sprott Physical Uranium Trust

Source: Sprott Physical Uranium Trust

And that's why I'm increasing my position in both.

No mining related risks, like with uranium miners, but a prospect of a takeover.

And I will not approve a takeover under a 2x of the share price of those 2 physical uranium funds at the moment of the offer, because I know that uranium demand is price inelastic.

Today the uranium spotprice is at 82.50 USD/lb

82.50 USD/lb uranium price now gives a NAV to U.U of 20.31 USD/sh and to U.UN of 28.62 CAD/sh

82.50 USD/lb -> 100 USD/lb = 21% increase

82.50 USD/lb -> 120 USD/lb = 45% increase

82.50 USD/lb -> 150 USD/lb = 81% increase

82.50 USD/lb -> 200 USD/lb = 142% increase

There are alternatives: URA etf, URNM etf, URNJ etf, ...

This isn't financial advice. Please do your own due diligence before investing

Cheers