AEE 0.00% 0.7¢ aura energy limited

Sorry mate. I only realised today that I did not answer you...

  1. 2,195 Posts.
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    Sorry mate. I only realised today that I did not answer you before. I have Cycle Bottom living in my head. Rent free too

    It would be a long and windy post if I go into any sort of detail. So let me just give some points to support my thesis.

    1. It seems $KAP ramped up production to satisfy Chinese demand.

    2. Chinese demand from $KAP has dropped the last couple of years. This is at a time when the Chinese have recently announced a huge reactor development program. Did they just decide and announce it or has it taken years of planning? I suggest the latter.

    3. So why has China been buying less? Simple. They have enough U inventory and future coverage (Rossing/Husab/part-ownership PDN and some others). My guess is they bought about double their annual requirements last year. So they are still adding to inventory.

    4. $KAP seeing the drop off in Chinese demand go for an IPO. All money going to the vendor, KZ Govt. None for future CapEx for example. Planning an IPO at the bottom of the cycle is... unusual.

    5. U bulls talk about 7 years inventory per Chinese reactor as a hard rule. It is a myth and gets continually recycled by U specs/Twitter. Along with the other big myth: $KAP reducing production by 20%. They did not and could not (see Subsoil Code)

    6. To increase $KAP IPO success, was the $YCA.l IPO. Is it a coincidence they are partners? Further the inventory table in the $YCA prospectus was missing $KAP inventory. The biggest producer!

    7. I live in Russia and understand the culture very well. At a geo-political level, the Russkies plan years in advance. Do you think they would offer whole of life reactor solutions without a secure U supply? Or do you think they will buy roll-ups at the top of the market (think Areva in the last boom).

    8. Generally, the true inventory levels of China and Russia are unknown

    9. If one looks at each reactor (current/WIP/planned) and each U mine (producing/C&M) globally then assigns U-lbs based on ownership and/or geo-political grounds, who has least forward coverage? Imo. it is not China and Russia (and the recipients of their reactors), it is US/EU. India is building inventory (big purchase from $KAP in 2018) and securing supply (Uzbek). India also has deals with the Russians. India and Russia are long time 'friends' (subs, space, US support of PAK). I lived there too...

    10. US/EU will drive U prices as they scramble for supply from current producers and incentivise C&M mines to re-open and some new mines to come online. But which...

    Anyone should feel free to debunk the above.

    All imo.
 
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