We find a lot of value in our conversations with management teams because they allow us to confirm or challenge the timing of an investment theme. Management will (almost) always be bullish on its own industry. What matters to us is whether the facts behind that view hold up, and in uranium, they do.
Last week, we had two very insightful conversations with uranium companies we hold in the Aurelion Index.
We met with the CEO of Yellow Cake (YCA), Andre Liebenberg, and Cameco Corporation’s (CCJ) VP of Investor Relations, Cory Kos.
One of the most interesting points from our calls was the timing of the next contracting cycle.
Uranium equities have been trading lower in recent months partly because the market does not expect a supply shortage in the short term. The chart below shows that while the market is relatively balanced today, the supply deficit is expected to become significant in the coming years:
According to Yellow Cake’s estimates, U.S. utilities have only 40% of their uranium needs for 2030 under contract.
That is already late. Utilities typically contract 3–5 years ahead, while fuel fabrication adds another 18–24 months. On that timeline, uranium needed for 2030 should already be secured.
What allowed them to wait was the excess inventory built up after Fukushima. That cushion has now largely been drawn down.
The shortage is not here yet. But utilities are starting to fall behind, and the remaining 60% still needs to be secured. We argue that by the time the shortage becomes obvious, it will already be too late for investors to position themselves.
Methodology: Aurelion Research independently reaches out to company management teams and does not receive compensation from any companies covered. Interview responses are based on our notes and have been edited for clarity, so they may not reflect the speakers’ exact words. We selected the sections we found most relevant.
All information discussed is believed to be publicly available. This content is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any security.