Daniel Major: 75% of Uranium Producers Are Now Losing Money
Daniel says the uranium market took a beating due to a new W.N.A report. The takeaway from that report is that they are showing a deficit around 2025. We see a 10 to 15 million pound deficit around 2020. The market is getting very tight and could quickly enter into deficit. Price is unlikely to break to the downside and increasingly likely to head up. 75% of the industry is not making money against their cash costs, and there is not much left to cut.
The amount of underfeeding was more substantial than we anticipated. That market has similar problems and will begin to lose money at this level. The enrichment markets contracts are also unwinding with the spot price going below costs. While companies have been very good at trimming costs and limping along, it’s getting harder to do. When this market decides to respond, it will respond very quickly.
The worse the market gets the larger the eventual reaction. When everything is bleak no one pays attention to good news people stop looking at the sector.
Daniel comments, a year ago everyone questioned our abilities now we have been able to prove that our projects are viable. We have a clear path to debt financing which is very positive for GoviEx. He discusses the current state of their Mutanaga, Falea, and Madaouela projects. They are working to consolidate projects in a way that adds value and lowers costs. He feels their stock is still undervalued compared to other uranium companies.
Talking Points From This Week’s Episode
• Market sentiment is quite dismal and good news is largely ignored.
• U.S. Politics has changed and is now favorable toward nuclear and coal.
• Japan is moving forward with approvals for reactor restarts.
• GoviEx is nearly DTC eligible which will make investing for U.S. residents easier.
Daniel Major is Chief Executive Officer of GoviEx and is a mining engineer from the Camborne School of Mines in the UK. His career spans over 25 years in the mining industry where he has established a solid track record initially with Rio Tinto at the Rossing Uranium Mine in Namibia and later as a mining analyst with HSBC Plc followed by JP Morgan Chase & Co. in London. More recently Mr. Major was Chief Executive and later Non-Executive Chairman of Basic Element Mining and Resource Division in Russia, and held leadership positions in several Canadian listed mining companies with exploration and producing assets in Canada, Russia, and South America.