Speaker 1: Welcome to Trillions. I'm Joel Webber and I'm Eric bel Tunis. Okay, Eric,
Speaker 1: you made a call in January at Inside E t
Speaker 1: F S and we're gonna actually spend today's episode bringing
Speaker 1: the world up to speed on that call and everything
Speaker 1: that unfolded. What was your call, Well, it wasn't a
Speaker 1: call per per se. It was just a I was
Speaker 1: onto an et F. That's just really having quite the
Speaker 1: break up moment at Inside E t S, which is
Speaker 1: like the comic Con of ETFs. Every year they have
Speaker 1: this best New E t F competition with all the
Speaker 1: pundits from the industry arguing for what the best launch
Speaker 1: was of the year before. So in January I argued
Speaker 1: for u r n M, which is the North Shore
Speaker 1: Uranium Mining e t F and it just come out
Speaker 1: a month ago in December, and so nobody heard of it.
Speaker 1: And I had looked at your radium a couple of
Speaker 1: times in the ten years prior. There's a ticker called
Speaker 1: you are A which had been around and it's always bad.
Speaker 1: It would have a little head fake here and there,
Speaker 1: but just go down again. But this story stuck with me.
Speaker 1: There was a narrative there that I was like, there's
Speaker 1: something here. And so as I've seen more people talk
Speaker 1: about E. S G, it's really occurred to me that
Speaker 1: there's definitely an inconsistency between people wanting to keep up
Speaker 1: their lifestyles yet also wanting to fight climate change. And
Speaker 1: so I was making the case on stage that you
Speaker 1: R and M is a intriguing because it launched after
Speaker 1: a horrible back test. You never see that, and also
Speaker 1: that it was sort of like green investing for realists. Um,
Speaker 1: you know, you arguably are going to need to have
Speaker 1: nuclear if everybody can keep up what they're doing in
Speaker 1: their economies and yet you can fight climate change, you
Speaker 1: just really can't get it done with solar and wind.
Speaker 1: So that's the case I made. I didn't win. I
Speaker 1: probably came in third. It's based on like how loud
Speaker 1: the audience collapse, but I will say I won the
Speaker 1: perform since competition race by a mile. This thing is
Speaker 1: up two since then. It's up four d and twelve
Speaker 1: since March, which is a bottom for a lot of equity.
Speaker 1: T F. That's double arc and everybody thinks arcs like
Speaker 1: the best thing. That's double arc About four times the
Speaker 1: cueues and this year it's up a hundred pcent, which
Speaker 1: is by far the best performing equity e t F.
Speaker 1: The next best one is something like So this is
Speaker 1: a white hot area. And so I will take a
Speaker 1: little victory lap and say I was on to it early,
Speaker 1: not that I quote called it. Okay, thanks for that explanation.
Speaker 1: So if you haven't, if you haven't been able to
Speaker 1: gather that yet, we're gonna talk about uranium. Joining us
Speaker 1: is gonna be Tim Ratlo north Shore in Disease. He's
Speaker 1: the guy who actually came out with that uranium ETF.
Speaker 1: We're also going to be joined by Michael Alkin, the
Speaker 1: c i O of Sachem Cove Partners, and John Giampaglia,
Speaker 1: the CEO of Sprout Asset Management, this time on Trillions
Speaker 1: New in Sanity. Tim, Michael, John, welcome to Trillions. Thank
Speaker 1: you having us very much. Okay, So Tim, I want
Speaker 1: to start with you because uranium was your big idea.
Speaker 1: Why why did you get this idea? How did how
Speaker 1: did it hit you? Yeah, so I'll stop you there.
Speaker 1: I mean it was Mike's idea. Mike. Mike was the
Speaker 1: one who you know I met in seventeen and he
Speaker 1: had written this just incredibly sync white paper talking about
Speaker 1: I mean really what everybody is now talking about, UM,
Speaker 1: big supply deficit, uh, you know, multi year bearer market shrinking,
Speaker 1: equity market caps. And it just made so much sense.
Speaker 1: And I've always been attracted to deeply contrary and things,
Speaker 1: and that's that's gonna Mike spent. And fast forward to
Speaker 1: we had gotten involved in launching a hedge fund in
Speaker 1: the space and to invest in uranium, and it became
Speaker 1: apparent that there was this big four seller out there,
Speaker 1: which happened to be u are A because they changed
Speaker 1: their mandate. And I looked at it and just said,
Speaker 1: if this thesis is correct, there will need to be
Speaker 1: some pure playing mine e t F like there is
Speaker 1: for every other commodity, gold, silver, you know, and that
Speaker 1: even rare earth metals have had an et F that
Speaker 1: was more a pure play. And it just looked like
Speaker 1: a really interesting entry point. I knew nothing about E
Speaker 1: t S at that point. UM, so it kind of
Speaker 1: got up to speed and right time, right place launched
Speaker 1: it in ten and they were off of the races
Speaker 1: and the whole time Mike's thesis is playing out. And
Speaker 1: literally you can go back to Seen and look at videos,
Speaker 1: um that he did at conferences where he laid out
Speaker 1: the thesis, and I mean every single point, and I
Speaker 1: think you know, some of the E. S G stuff
Speaker 1: was there, but the extent to which the green and
Speaker 1: the nuclear revolution those are always kind of upside cases.
Speaker 1: But for the for the thesis to work, you never
Speaker 1: actually needed any of those things. That's just kind of
Speaker 1: icing on the cake at this point. Um. And it's
Speaker 1: been great to see this nuclear renaissance that were kind
Speaker 1: of in the midst of beginning. Okay, so Mike, Mike
Speaker 1: talked to us more about that that renaissance and also, um,
Speaker 1: what led you to to sort of recognize that this
Speaker 1: was going to be this opportunity And also I'm really curious,
Speaker 1: you know, why has this thing basically tracked with the
Speaker 1: pandemic right, like it's really popped during that time. Yeah, Joe, sure.
Speaker 1: So my whole career has been spent on in contrarian
Speaker 1: and looking for things that people are not interested in
Speaker 1: at the time. You tend to find recency biases, and
Speaker 1: and the longer the bear market, uh, the longer the
Speaker 1: you know, the recency bias, and the more they had
Speaker 1: an anchor to it, right, so in the case of
Speaker 1: nuclear power, we had looked at it in the past
Speaker 1: and twenty two thousand seven and had a big run
Speaker 1: two thousand and eleven after fu Kushima, but didn't we
Speaker 1: were working on other things that didn't have time to
Speaker 1: really die. End At two thousand and fifteen, though had
Speaker 1: looked at something where the market cap of the industry
Speaker 1: had gone from about a hundred and fifty billion down
Speaker 1: to about four billion, the number of companies had gone
Speaker 1: from maybe five hundred down to fifty, and so it
Speaker 1: was devastated. And so at that time we decided it
Speaker 1: was time to dig in and just understand what the
Speaker 1: role of nuclear power is because as all of us
Speaker 1: we see, uh you know, you talk about the greening
Speaker 1: of the carbonizing the world. That's not it's it's gaining
Speaker 1: great momentum now, but it's it's relatively new um. But
Speaker 1: even then it was starting to come around. But we
Speaker 1: know wind and solar. So what I wanted to do
Speaker 1: was understand better the role of nuclear power versus the
Speaker 1: alternatives that can help de carbonize the world. And what
Speaker 1: I realized after spending because at that time the cell
Speaker 1: side had disappeared. If you were a cell side Uranian analyists.
Speaker 1: You were likely fired when the commodities down, you're out
Speaker 1: of a job. And so there was really very little research.
Speaker 1: A couple of industry be forecasters that were around, but
Speaker 1: I said, let's take a fresh start at this. Is
Speaker 1: there a case for nuclear power? And when you dive
Speaker 1: in and nobody is paying attention and it's just sitting there,
Speaker 1: hiding in plain sight. When you realize is it's not
Speaker 1: a sexy growth business, but with draconian assumptions, it was
Speaker 1: the one percent growth business. And you realize that it's
Speaker 1: not a competitor to wind and solar, it's it's a
Speaker 1: compliment to wind and solar. It's baseload, it's a beast,
Speaker 1: it's always on. And then as you dive in further,
Speaker 1: you say, wait a second, on a per tero at
Speaker 1: hour of electricity generated, it's the safest form in the
Speaker 1: world of electricity generation, which most people would say, what
Speaker 1: are you talking about? Right, But math is math. Facts
Speaker 1: are facts. And then there's the one thing you have
Speaker 1: to try and understand is the waste. Right, we all
Speaker 1: hear on nuclear waste and again that's that's a bias
Speaker 1: that exists because at the end of the day, it's
Speaker 1: really the only contained waste. You know where it goes.
Speaker 1: It's it's a it's a cooling ponds for five years,
Speaker 1: and then it's in concrete steel reinforced casks sitting on
Speaker 1: the on their utility. So if you know where that
Speaker 1: stream is and and really uh, then looking at that
Speaker 1: saying okay, it's real nuclear power is here to can
Speaker 1: help decarbonize the world. Eventually, the economics have to sort
Speaker 1: themselves out. It's twelve percent of electricity generation in the world.
Speaker 1: And at the time, uh, the cost of your you know,
Speaker 1: the price of uranian was probably in the high teens,
Speaker 1: low twenties, and the marginal cost of production is close
Speaker 1: to fifty. And so I'm not the sharpest tool in
Speaker 1: the shed, but I know that you can't pull something
Speaker 1: out of the ground at fifty and sell it at eighteen.
Speaker 1: That doesn't work. So you need to have supplied discipline.
Speaker 1: And that was really the genesis of it. Now where
Speaker 1: people get confused is they look at the if you're
Speaker 1: in the US, you're in you're in Europe. It's not
Speaker 1: a growing industry here. It's it's a flat to slightly
Speaker 1: declining industry. But in in in the developing world. It's
Speaker 1: a it's a very rapidly growing industry. So you just
Speaker 1: have to be able to understand the differences. All right, Well, Mike,
Speaker 1: you just went over a lot um. There's a lot
Speaker 1: to unpack, and there's a couple of things you want
Speaker 1: to We're gonna come back to, which is the the waste,
Speaker 1: you know, and the sentiment of having a reactor near
Speaker 1: your house. I want to get to that later in
Speaker 1: the episode. I want to just keep it to the
Speaker 1: here and now with the with the funds though, and
Speaker 1: let's bring in John and talk sprout. So we've got
Speaker 1: the r U r N M and you are a
Speaker 1: which track equities in the US, then up in Canada, John,
Speaker 1: you have sprought physical Uranium Trust. Now this actually holds
Speaker 1: yellow powder right in warehouses around the world, like the
Speaker 1: way gold would would hold gold gold bars. And this
Speaker 1: fund has really um sort of come out of its
Speaker 1: shell held in the past couple of weeks. It's now
Speaker 1: I believe a billion holds million pounds of uranium and
Speaker 1: has become a big player in the market. And recently
Speaker 1: you had to go and ask for new shares to
Speaker 1: hit to feed the demand and that actually set up
Speaker 1: another catalyst event for the sector. So I guess could
Speaker 1: you talk about what you're seeing up there and how
Speaker 1: you got involved. Sure, thanks for having me on so UM.
Speaker 1: Sprout Asset Management is based in Toronto and we often
Speaker 1: think of it as being the mind finance capital of
Speaker 1: the world. So Sprout has a very long history with
Speaker 1: all things mining, and in the last uranium cycle that
Speaker 1: happened in the kind of the mid two thousand's, we
Speaker 1: were very active on the on the equity side, and
Speaker 1: uh we were also very involved with the the genesis
Speaker 1: of the preducessor vehicle, which was called Uranium Participation corps Um.
Speaker 1: It was launched in two thousand and five. It was
Speaker 1: a holding company structure on the Toronto Stock Exchange, and
Speaker 1: after a very long pursuit, we acquired that vehicle in
Speaker 1: July and we converted it from a holding company structure
Speaker 1: to a more traditional investment fund. So it's a closed
Speaker 1: end fund that trades on the Toronto Stock Exchange. It
Speaker 1: also trades on OTC pink sheets all right now, and
Speaker 1: and the reception we received with the fund has just
Speaker 1: been phenomenal. In the last couple of months, the trading
Speaker 1: volume is really picked up um the vehicle, as you said,
Speaker 1: almost five million physical pounds of you three O eight
Speaker 1: or known as better known as yellow cake UM. And
Speaker 1: in the last say six weeks, we've acquired over six
Speaker 1: million pounds UM as we've issued new shares in the trust,
Speaker 1: we've we've backed those with physical more physical uranium. Help
Speaker 1: me understand twenty five million pounds, let's add six to it,
Speaker 1: thirty one thirty one million pounds. What percentage of the
Speaker 1: uranium sitting out there is that we're Is there a
Speaker 1: better way to sort of put that into context? Sure?
Speaker 1: So we right now the trust owns about twenty five million.
Speaker 1: So when we acquired the company um IT, it had
Speaker 1: about eighteen and change million pounds. So we've been adding
Speaker 1: pretty consistently. So give you some perspective, because honestly, when
Speaker 1: I first quired the fun and try to put it
Speaker 1: into context in my head, it's it's pretty mind boggling
Speaker 1: the mount of uranium. So we could power the entire
Speaker 1: nuclear fleet in France, which produces of the country's power
Speaker 1: for one year with all of that material, just to
Speaker 1: give you a sense of how much uranium that is.
Speaker 1: So it's a huge quantity. It's it's stored at three
Speaker 1: different conversion facilities in the Western world. There's one in
Speaker 1: the US, one in Canada, and one in France. So
Speaker 1: that's where all these drums are are residing right now.
Speaker 1: And how did you break that news to your wife
Speaker 1: that you had just acquired twenty five million pounds of uranium?
Speaker 1: How did that go over? Well, she thinks I'm a
Speaker 1: total geek anyway, So that's just added to the uh,
Speaker 1: added to the legends. Okay, walk us through what it
Speaker 1: takes to actually like take possession of million pounds of uranium. Yeah,
Speaker 1: so we're customed to dealing with a lot of bulky commodities.
Speaker 1: We have a number of n YC listed tickers p
Speaker 1: h y S and PSLV, and so we're are custom
Speaker 1: to moving around large amounts of gold and large amounts
Speaker 1: of silver. Silver in particularly in particular, is very difficult
Speaker 1: to move around. But your aim is a whole other,
Speaker 1: obviously category. It is probably the most regulated and secure
Speaker 1: supply chain of anything in the world. As you could imagine,
Speaker 1: every single pound from mind to conversion facility to nuclear
Speaker 1: reactor is tracked so for obvious reasons. So, um, the
Speaker 1: you know, that that gives us a lot of comfort
Speaker 1: that the supply chain is very safe and um but
Speaker 1: a lot of this stuff it moves around on ships,
Speaker 1: it moves around on trucks, and it goes from just
Speaker 1: a few places in the world. The predominant producers are
Speaker 1: in Kazakhstan, Canada, Australia, and there's a number of minds
Speaker 1: in Africa. So it's a commodity that is concentrated in
Speaker 1: only a few parts of the world, which you know
Speaker 1: we make. We think that makes it more scarce and
Speaker 1: more susceptible to supply to disruptions. And do you think
Speaker 1: we will or could see one of these launch in
Speaker 1: the US, like a physically back uranium et F. I
Speaker 1: would I would think it would be that the iron
Speaker 1: is hot to file for one. So part of our
Speaker 1: reorganization plan for Uranium Participation Corps was a pledge that's
Speaker 1: brought would pursue a US listing and we're gonna start
Speaker 1: that work in the in the coming weeks. Uh. Nobody
Speaker 1: has ever successfully launched a physical uranium stockpiling fund in
Speaker 1: the in the US. Somebody tried once but was denied
Speaker 1: because it was more of a trading company. So we
Speaker 1: know we we have a long road ahead of us
Speaker 1: in terms of working with the regulator to get approval
Speaker 1: for the for the new vehicle. Um, it's something we've
Speaker 1: done many times in terms of UH securing sec approval
Speaker 1: for commodity stockpiling funds. We have a lot of experience
Speaker 1: with that and that's something we're gonna be working on.
Speaker 1: It is a novel listing, so we don't really know
Speaker 1: what we're gonna encounter until we we're right in the
Speaker 1: in the in the thick of it. The ticker that
Speaker 1: trades o t C is s r UUF. It looks
Speaker 1: like that's starting to make its way around the Wall
Speaker 1: Street bets crowd, the Reddit crowd. Why are they locking
Speaker 1: into this trade? Um? You know, is it just because
Speaker 1: it's a place to make money or is there some
Speaker 1: other populist motive they have? Well, you know, at the
Speaker 1: end of the day, it really is about the thesis,
Speaker 1: you know, underpinning the story. Um. You know, I'm not
Speaker 1: going to deny that there's probably some some short term
Speaker 1: money chasing this right now, but that's the way the
Speaker 1: market works. But I'm I've been amazed that the growing
Speaker 1: number of investors I've spoken to that have been in
Speaker 1: the trade for the last few years. And and just
Speaker 1: to step back a second, we've been working on this
Speaker 1: since So this isn't some some idea we just whipped
Speaker 1: up to capture some kind of you know, meme following.
Speaker 1: We've been on this for a long time because we
Speaker 1: we fundamentally thought like the market needed to reset. But
Speaker 1: in the last couple of months, I've noticed a much
Speaker 1: broadening of interest. Uh. In the early days, it was
Speaker 1: it was a very small group of specialty investors or
Speaker 1: contrarian investors or value investors. Now I'm seeing it broaden
Speaker 1: out to generalists. They're getting interested in the story. Um,
Speaker 1: and obviously we're seeing a lot more individual investors, which
Speaker 1: I think is great UM to to make the market
Speaker 1: more liquid and active and the sprout physically. Randium Trust
Speaker 1: is the largest vehicle of its kind in the world,
Speaker 1: and and that's drawing those investors to us on both
Speaker 1: the Toronto Stock Exchange and the OTC market. So, Mike,
Speaker 1: I want to bring it back to you because we're
Speaker 1: we've talked about the supply here. UM, there is a
Speaker 1: demand question, which is obviously you know, there there's a
Speaker 1: case for for more nuclear facilities, but you know, what's
Speaker 1: the what's the outlook like for more nuclear I mean
Speaker 1: you mentioned the emerging world. You know there's there's all
Speaker 1: kinds of policy implications, but like what are what are
Speaker 1: you seeing and what kind of timelines are these projects on.
Speaker 1: It's a great question, Joe. So if you think about
Speaker 1: both the supply and the demand side and uranium very
Speaker 1: long lived assets, it could take it. Take Cigar Lake
Speaker 1: at one of the biggest uranium minds in the world,
Speaker 1: owned by Chemico. It was a thirty plus year endeavor
Speaker 1: from finding it to bringing it, permitting it. Nobody wants
Speaker 1: one of these things in their backyard, right, so very
Speaker 1: long live and the same thing on the demand side,
Speaker 1: to to to to plan a reactor, to get the
Speaker 1: approvals to build it. You know, you're talking decades plus.
Speaker 1: So when you think of these things here we are,
Speaker 1: you look out to say, okay, what's twenty look like.
Speaker 1: And the World Nuclear Association, which does very holistic, bottoms
Speaker 1: up approach utility by utility to what demand look like.
Speaker 1: And in many years they're there, they've been quite dowering
Speaker 1: their outlook, but recently the last few years they've taken
Speaker 1: that outlook up and if you just look at their
Speaker 1: recently released demand report through you're looking at two points
Speaker 1: six percent per annum and growth UH in in demand
Speaker 1: for nuclear power. And that does not factor in what
Speaker 1: you can expect to see, which would be um life
Speaker 1: extensions out to eighty years for many of these reactors,
Speaker 1: which many of them can get. It doesn't includes small
Speaker 1: modular reactors which are easier, easier to build, more scalable.
Speaker 1: So you're seeing a nice growth profile UH and it
Speaker 1: doesn't take a big stretch with life extensions to push
Speaker 1: up towards that three percent per annum growth, which is
Speaker 1: a very reasonable growth number. Yeah. One one comment I
Speaker 1: would out about the wind and Star don't give you
Speaker 1: a couple of great ancdotes of recent So you look
Speaker 1: at the uk UM in the last year, wind speeds
Speaker 1: have been lower than average. You know that's just out
Speaker 1: of their control. So what are they what are they've
Speaker 1: had to do? Well, they had to fire up more
Speaker 1: natural gas plants, which then caused creates more carbon offsets
Speaker 1: that plants have to buy. And look look at last
Speaker 1: February when the winter storm hit Texas, when the turbines froze,
Speaker 1: natural gas wells froze. The whole system went down at
Speaker 1: a time when electricity demand spikes. So this whole narrative
Speaker 1: about reliable baseload power I think is very important for
Speaker 1: electrication of the grid um and also you know greenhouse
Speaker 1: gas reduction targets. Yeah. No. On on the supply side,
Speaker 1: I mean, I think when when I first looked at
Speaker 1: Mike's original thesis, what was so attractive is, as he
Speaker 1: pointed out, the thesis actually didn't require any nuclear demand growth.
Speaker 1: You could write to zero. The issue is a supply
Speaker 1: issue and a marginal cost production issue, and that you
Speaker 1: need prices that are higher. And I think that's what
Speaker 1: you've why the price and the and the equities have
Speaker 1: been rallying so much recently, is up until now, the
Speaker 1: demand story is is kind of there, and you've had
Speaker 1: all these right sale kickers. What's been the issue is
Speaker 1: there's been there's a supply denks at this form, you
Speaker 1: don't actually have enough your anemy in the world to
Speaker 1: power all these nuclear reactors. So just the demand growth
Speaker 1: that we're seeing now is just exacerbating that supply deficit.
Speaker 1: And and so you need that you need those higher
Speaker 1: prices in order to incent new mind production to fill
Speaker 1: that deficit. So let me jump in here with that
Speaker 1: because I get this question on Twitter a lot. Does
Speaker 1: this have room to run? And so if there's two
Speaker 1: issues going on here, one is there was a supply problem, Well,
Speaker 1: now you are a is up. I'm going to use
Speaker 1: you are a in this example, sorry Tim, because it's
Speaker 1: been around for like twelve years, you are a since
Speaker 1: inception or since Fukushima is down still even with that
Speaker 1: massive pop. So the chart looks like a big move
Speaker 1: down and then a little a little like little dipper
Speaker 1: up hasn't come up to where it was. How far
Speaker 1: does have to run just on this supply issue? Pretend
Speaker 1: there's no demand for nuclear is green energy? What's your
Speaker 1: estimate on that room to run on just the supply story?
Speaker 1: So it depends on you know, everyone likes to talk
Speaker 1: about where does the market balance? Right, so what's some
Speaker 1: marginal cost of production? And uh And the reality is
Speaker 1: if you look at the four uranium cycles, it doesn't
Speaker 1: work that way, right. It's it's a it's a commodity
Speaker 1: where when when the price is down To give you
Speaker 1: a little perspective, before the last cycle that really started
Speaker 1: moving in November of two thousand when it bottomed out
Speaker 1: at seven dollars. In those dollars um UH for the
Speaker 1: prior several years it had the utilities which are the
Speaker 1: by the vast majority of uranium UM. They because it's
Speaker 1: long lived assets, its long life minds. Typically the end
Speaker 1: is most uranium has purchased under long term contracts seven, eight, nine,
Speaker 1: ten years and longer um. During the last bottom, when
Speaker 1: prices were had bottomed out in the high single digits UM,
Speaker 1: they were contracting it about a third of their consumption
Speaker 1: per year for many many years. You fast forward to today,
Speaker 1: since twenty elve through one, they've been purchasing at about
Speaker 1: a third of their annual consumption. When prices start moving
Speaker 1: and and and requirements are uncovered into the future, they
Speaker 1: start to have more and more out into the future.
Speaker 1: In the last cycle, you saw them purchasing at one
Speaker 1: one hundred and six for many years of their annual consumption.
Speaker 1: So it's one of these things where you're looking in
Speaker 1: and it what's the price of balances out? You know,
Speaker 1: you could say sixty five seventy bucks you can bring
Speaker 1: on the minds, but it's not that simple because these
Speaker 1: you need many new minds to be built, and they're
Speaker 1: not built yet. And if you look at the history
Speaker 1: of bringing uranium minds online, it's very bad. So many
Speaker 1: things can go wrong, and they're in tough countries to
Speaker 1: get licenses and permits. Uh building them right now, you're
Speaker 1: gonna be facing competition for equipment in people. But but
Speaker 1: many of these minds need to be built. O. Um.
Speaker 1: It depends where and and you know, you think about
Speaker 1: how far can they run? It depends what price you're using.
Speaker 1: If the market balances in the sixty five is seventy range, well,
Speaker 1: last time that you were signing contracts at ninety and
Speaker 1: a hundred dollars a hundred and it just to interrupt
Speaker 1: you here right now it is trading in about forty bucks. Yeah,
Speaker 1: it's trading forty four dollars, okay. And at Fukushima it
Speaker 1: was what it was. Fushima was in the low seventies,
Speaker 1: high sixties around around that. It had peaked at one
Speaker 1: thirty seven in June seven. But when you're looking at
Speaker 1: the question, you have to ask, is it because it's
Speaker 1: a psychological battle, right, So fuel buyers have stayed out
Speaker 1: of the market for so long, and that recency bias.
Speaker 1: If you speak to them, they tell you there's all
Speaker 1: the uranium in the world that's out there, right, Well,
Speaker 1: johns him Potley is vehicle, which is very transparent, has
Speaker 1: given the world to the fuel buyers four months to
Speaker 1: know where coming we're going to be buying uranium on
Speaker 1: a broker platform. Very trans Apparently you could go out
Speaker 1: and buy uranium to secure that uranium. And what has
Speaker 1: happened in those four months leading up to the launch
Speaker 1: of the act the money offering from sprout Crickets, they
Speaker 1: didn't show up. They bought hardly any uranium. So for
Speaker 1: the first time in the history of uranium, John's vehicle
Speaker 1: creates daily price discovery. And what we're learning the price
Speaker 1: has gone from thirty to forty four in a month.
Speaker 1: So what that's telling you is that all of the
Speaker 1: market's perception about all this uranium that's sitting out there
Speaker 1: is wrong. So now the question becomes is what price
Speaker 1: did the producers say to the utilities, Sorry, we've had
Speaker 1: a decade of devastation to our share price. Now we
Speaker 1: need to make up and then you'll see where that balances.
Speaker 1: So that's the current state. As if there isn't this
Speaker 1: bigger picture. I want to pivot to this ten twenty
Speaker 1: years down the road. One of the quotes I brought
Speaker 1: up on stage. I'm not sure if you were there,
Speaker 1: tim it Um. When I was on stage, I brought
Speaker 1: up this Bill Gates quote if from tenth seventeen or eighteen.
Speaker 1: I believe he said nuclear is ideal for dealing with
Speaker 1: climate change because it's the only carbon phrase scalable energy
Speaker 1: source that's available twenty four hours a day. Then Elon
Speaker 1: musk Wade in about two months ago saying I'm pro nuclear.
Speaker 1: I think modern nuclear power plants are safe. Contrary to
Speaker 1: what people might think, it's possible to make extremely safe
Speaker 1: nuclear energy. And then Michael Bury from The Big Short
Speaker 1: tweeted out, if the government's going to spend two trillion,
Speaker 1: there's no better use than converting the US to nuclear.
Speaker 1: And those are three very influential people. They seem to
Speaker 1: have come around mentally, they have access to Maybe maybe
Speaker 1: they're more curious than most people, but let's face it,
Speaker 1: there's a gap between what they say and what you'd
Speaker 1: probably find if you pulled average people. They probably think
Speaker 1: of Homer Simpson, Chernobyl Uh just you know, deformed fish,
Speaker 1: how do how do you bridge that gap? You know,
Speaker 1: you're seeing more and more since in the US nuclear
Speaker 1: power is a bipartisan issue, right, which it never was.
Speaker 1: It was the left versus the right. And now you're
Speaker 1: seeing this realization that if you want to decarbonize the
Speaker 1: world by twenty fifty, as everyone is coming out proclaiming
Speaker 1: they want to do, you just have no choice. And
Speaker 1: then that opens up the conversation and people's minds to say, okay,
Speaker 1: well let's look at some of the data. And when
Speaker 1: you look at the data, you know, we we we we.
Speaker 1: We think of the movie The China Syndrome. You think
Speaker 1: of three Mile Island at Chernobyl, Chernobyl. These are one
Speaker 1: offs and yes, scary, dangerous, but on a when you
Speaker 1: look at it, on a per terot hour of electricity produced,
Speaker 1: nothing is safer. So I think that opens up people's
Speaker 1: minds and you take those those people you just mentioned
Speaker 1: right right, people looking at it and saying we get it.
Speaker 1: And I think if you look at public opinion polls,
Speaker 1: they're turning to how long does it take one pound
Speaker 1: of fuel to power light bulb? Right? So coal is
Speaker 1: two days, now trall gas is three days. Nuclear sixty
Speaker 1: forty years. So I mean, when you're talking about power
Speaker 1: dead to be what it could really do, and then
Speaker 1: you start to realize that it's a safe fuel, people
Speaker 1: start to really think about that. Yeah. Eric. One other
Speaker 1: thing I would mention is the narrative shifting also related
Speaker 1: to E s G, And obviously with COVID, e s
Speaker 1: G has grown enormously in popularity, and from many of
Speaker 1: the investors I've talked to the last few months about uranium,
Speaker 1: it's interesting that they're starting to bucket in with it
Speaker 1: in this broader E s G theme, low carbon theme,
Speaker 1: electrification theme. So it's going in a bunch of different
Speaker 1: investors segments, which I think is really interesting. And um,
Speaker 1: I think the other point around government policy really shifting.
Speaker 1: I think you're seeing it in the with the Biden administration.
Speaker 1: You're seeing it in the EU. They're obviously arguing it
Speaker 1: for to be in the UH taxonomy. Um, and there
Speaker 1: is you know, there are obviously countries of Germany that
Speaker 1: have opted to move away for nuclear But I sit
Speaker 1: there and I look and I say, now you want
Speaker 1: to be beholden to Russian natural gats, Good luck with that.
Speaker 1: I want to talk about one of the other challenges
Speaker 1: UM and we mentioned this earlier, you know, which is
Speaker 1: the waste challenge, right, And that's a that's a mental
Speaker 1: hurdle that a lot of people have because, as Mike
Speaker 1: mentioned earlier, it's it is something that is known, right,
Speaker 1: it's you see it and you have to deal with it.
Speaker 1: And maybe that's a little different than some of the
Speaker 1: other offsets from energy. So what what kind of UH
Speaker 1: horizon and breakthroughs are are there on the on the
Speaker 1: waist front that people should know about. Sure, well, you know,
Speaker 1: obviously with all things mining, you have to do with
Speaker 1: all points of the life cycle, whether it's reclaiming a
Speaker 1: side or dealing with nuclear um uh spent fuel. So
Speaker 1: our technical advisor w MC Energy was asked that question
Speaker 1: once with me and his response to that was quite interesting.
Speaker 1: He said, no one's ever died from spent fuel odds
Speaker 1: when you think about the depths that happen in coal mining,
Speaker 1: oil and gas, etcetera. UM, it is safely stored. Nobody
Speaker 1: wants it in their backyard and it's not putting, you know,
Speaker 1: close to big populations, so it is safely stored. It
Speaker 1: does rest there for very long periods of time. And
Speaker 1: the radio activity levels of it decay very quickly in
Speaker 1: the first five to ten years. So yes, we need
Speaker 1: to find safe ways to store it. But I think
Speaker 1: we all have to to look at the trade offs
Speaker 1: with other forms of energy production. You know, for example, coal,
Speaker 1: I think most people would be be shocked to know
Speaker 1: that in the United States, which is a very you know,
Speaker 1: one of the wealthiest countries in the world, of its
Speaker 1: electricity still comes from coal. When I think of coal,
Speaker 1: I think of people in horse and buggies a hundred
Speaker 1: years ago. It's still a huge part of the energy mix.
Speaker 1: And China coal has come down from it's still fifty
Speaker 1: seven and we all know they have major pollution issues there.
Speaker 1: So China has really figured out that they need to
Speaker 1: build a much bigger fleet of reactors to deal with
Speaker 1: their coal issue. And that's that's exactly what they're doing. Okay,
Speaker 1: So Michael, China's the world's biggest polluter, right And where
Speaker 1: are they at in this reactor conversation? And what will
Speaker 1: those reactors actually look like? Sure? So, just just a
Speaker 1: one more point on the on the waste. The solar
Speaker 1: panels last years, but we're seeing they last a little
Speaker 1: bit less and you're coming up to really your first
Speaker 1: big period where you've seen the expiry of the useful life.
Speaker 1: And one of the things with solar panels is they
Speaker 1: go into the general electronic waste stream and there you
Speaker 1: have nickel, laed, chromium, academium, all of these really toxic
Speaker 1: chemicals that are just sitting out there. So that's a
Speaker 1: real issue that I don't think gets enough attention to that.
Speaker 1: Regarding China and UM, you know they have put forth
Speaker 1: by they want to decar in eyes and UM. Going
Speaker 1: back though, if you go back to the middle two
Speaker 1: thousand five time frame, they were generating six seven giggle
Speaker 1: watts of electricity and they made a seven or eight
Speaker 1: nuclear reactors. You fast forward to today they have over
Speaker 1: fifty nuclear reactors. So in fifteen years they've gone on
Speaker 1: a major spree. And if you look at most of
Speaker 1: the growth of nuclear power, uh, two thirds of that
Speaker 1: is coming out of China. Uh. They're putting forward a
Speaker 1: big wind and solar effort. Uh. The problem you have
Speaker 1: when you do that is where as it generators generator
Speaker 1: along the coast, and then you have to transport it
Speaker 1: into the main land and you lose a lot of
Speaker 1: the electricity that takes place. So China's nuclear program is
Speaker 1: one where uh it is a little over fifty giggle
Speaker 1: wats of electricity today. Uh, and you could see that
Speaker 1: by twenty thirty and a hundred and thirty giggle wats
Speaker 1: of electricity. And then they continue to keep growing, and
Speaker 1: they plan on keep growing and growing. They could build
Speaker 1: anywhere from ten to twelve reactors pretty year, and it's
Speaker 1: something that's a very significant program for them. And it's
Speaker 1: still a single digit percentage of their electricity generation, but
Speaker 1: you know, it does provide clean baseload power to two
Speaker 1: millions of people every time you build a reactor, So
Speaker 1: they're very, very committed to it. They're a major driver
Speaker 1: of the cycle. Okay, Mike, I gotta ask you because
Speaker 1: this has been a really fascinating conversation, but um, effectively
Speaker 1: you run a uranium hedge fund. Is that right? Correct? Okay?
Speaker 1: So I gotta ask, like, what's it like to basically
Speaker 1: like be a character and like a James Bond movie
Speaker 1: every day? It's it's it's definitely interesting to read some
Speaker 1: interesting characters around the world. I'll say, can I just
Speaker 1: get a sense of like some of the interesting characters
Speaker 1: that you encounter, are they like from the James Bond film.
Speaker 1: I just say that my Russian and Kazak need need improvement.
Speaker 1: I need to speak better Russian and Ka. You've probably
Speaker 1: had some good vodka. Yes, that's that's the perk to
Speaker 1: that job. Okay, Um, two quickies. I want to wrap here,
Speaker 1: um just um. First on Tim. You know, we've seen
Speaker 1: a couple of ETFs go from like nothing like oblivion.
Speaker 1: We call it oblivion and just shoot up. It's almost
Speaker 1: like when an indie movie hits the big time, like
Speaker 1: Blair Witch Project, it happened to Jets, it happened to
Speaker 1: Cathy Wood. I would say, and you know you r
Speaker 1: n M is one of these funds that really, you know,
Speaker 1: all the ads stacked against you, and now it's uh
Speaker 1: what what well over half a billion dollars. It's now
Speaker 1: trading about eighty million a day. I looked this time
Speaker 1: last year between you and you are a you're trading
Speaker 1: two million a day last year. On this day, you
Speaker 1: guys trade about two million a day. I mean it's
Speaker 1: a hundred times increase. I mean, what's that like when
Speaker 1: it finally hits Uh, it's it's surreal my wife was
Speaker 1: joking like I used to a year ago. I was saying,
Speaker 1: I just want to get to fifty million, you know,
Speaker 1: I just wanted to get to break even. But you know,
Speaker 1: I don't know if who said it, but but good
Speaker 1: things happened at cheap assets. And I've been a huge
Speaker 1: believer in this thesis that Mike weighed out. It just
Speaker 1: felt like at some point people would get would get
Speaker 1: the story, and we just kind of had to keep
Speaker 1: telling it and the vehicle felt right and listen that.
Speaker 1: I think that the single best part of this experience
Speaker 1: has been the money that we've made for people who
Speaker 1: invested in the fund right, and a lot of our
Speaker 1: a lot of our growth has been a result of performance. Right.
Speaker 1: It was that the index was constructed correctly, you know,
Speaker 1: thankfully for for us. We we decided to keep the
Speaker 1: Sproat vehicle in UM when our competitors chose to have
Speaker 1: it leave when they when they did the reorganization from
Speaker 1: UPC and DI sprought UM. I think that's been a
Speaker 1: big differentiator. But yeah, it's been fun. I mean, it's
Speaker 1: been fascinating to watch some of these guys and I
Speaker 1: always have had jets in the back of my mind. Um,
Speaker 1: you know, maybe that could happen to us, but yeah,
Speaker 1: it's been, it's been fascinating. Okay, last question, Tim, this
Speaker 1: is something we do on every episode. Tim, what is
Speaker 1: your favorite E t F ticker that is not your own? Um?
Speaker 1: I really like the meta e t F like Matt
Speaker 1: falls Medica CTF. I was I wanted to launch that
Speaker 1: product so badly and when they and I think the
Speaker 1: guys at Round Hill have just been so good and
Speaker 1: so forward thinking about their tickers and their ideas. Um,
Speaker 1: that that's my favorite right now. Okay, Mike, what's your
Speaker 1: favorite ticker that's not Tim's? God? You know, Joel, I
Speaker 1: don't don't repeat this. I don't. I don't pay attention. Okay,
Speaker 1: all right, I'm so embrossed in uranium and energy that
Speaker 1: I just I'm the wrong guy to ask. Okay, Sorry,
Speaker 1: you're excused your you have you have some Kazakh stans
Speaker 1: to have ovodda with you. Okay, you're busy. Yeah, and John,
Speaker 1: how about yours? Well? Um, we like we like having
Speaker 1: physical commodity funds, and we like this, we like to
Speaker 1: pair them with mining funds. So I'm going to say
Speaker 1: you are and m for pairing with you dot you okay,
Speaker 1: we'll let you get away with it, all right, Yeah,
Speaker 1: technically it's okay, it's sorry. Sorry, you guys are uranium heads.
Speaker 1: What can you I mean? This is it's what you're
Speaker 1: gonna get? That question normally would be most most applicable
Speaker 1: to Tim, and and I think he answered it. We
Speaker 1: were satisfied with that, alright, Tim, Michael John, thank you
Speaker 1: so much for joining us and Trillion. Thanks thanks, thanks guys,
Speaker 1: thanks for listening to Trillions. Until next time. You can
Speaker 1: find us on the Bloomberg Terminal, Bloomberg dot com, Apple Podcasts, Spotify,
Speaker 1: and wherever else you like to listen. We'd love to
Speaker 1: hear from you. We're on Twitter, I'm at Joe Webber Show.
Speaker 1: He's at Eric Faltunas. This episode of Trillions was produced
Speaker 1: by Magnus Hendrickson Francesca Leave, the head of Bloomberg Podcast.
Speaker 1: Bye m m m mmm mmm mmmmmm mmm mmmmmmmmm