‘Inundated with offers’: Conservative Boss calls imminent uranium bull market

Fundamentals of uranium market ‘strongest seen in living memory’: Boss
Boss MD Duncan Craib says the near term miner has been ‘inundated’ with offtake offers from utilities
Uranium price will overshoot to the upside, Craib says

“I can honestly tell you the fundamentals of the uranium market are the strongest I’ve seen in living memory,” opined Boss Energy (ASX:BOE) boss Duncan Craib to the crowd at Diggers & Dealers.

“New production is needed, and that is where Boss is on target to deliver into a rising market.

“There is no doubt in my mind that the price is going to overshoot in response to this currently forecast supply deficit.”

Craib wouldn’t be drawn on how high the uranium price could go, but said market fundamentals looked better than they did in the 2000s, when yellowcake briefly spiked above US$143/lb.

“Demand is growing and mobile inventories are now significantly lower than they were in the early 2000s,” he says. “Inventories held by utilities are also reaching all time lows.”

“Those inventory levels need to be replenished. The tide has turned.”

BOE is one of three ASX-listed developers looking to restart mines to capitalise on this expected recovery in the global uranium market.

Its previously operating Honeymoon mine in South Australia is fully funded and on track for first production Q4 this year.

Is the parabolic move going to happen?

Boss has been good at picking the market thus far. In 2021 it purchased 1.25Mlb of uranium at US$30/lb to help with offtake negotiations.

It has now almost doubled in value.

But yellowcake experts have prophesied an ‘imminent’ uranium price spike for several years, and many investors are jaded.

While spot prices have performed admirably since recent lows of ~$20/lb early 2020 they have yet to reach the US$80/lb price needed to incentivise new production, which would light a fire under the junior end of the market.

What makes this time any different?

“I haven’t [previously been calling the bull market], and we are quite conservative in our outlook,” Craib told Stockhead.

“So for us to come out and say that means something.”

‘Inundated with offers’

With Russia’s invasion of Ukraine and the threat to vulnerable supply out of Kazakhstan – a dominant global producer – Craib says Western utilities are looking for supply from projects in “geopolitically stable” countries.

“That’s why we are getting so much demand for offtake,” Craig says.

“Recently there was a World Nuclear Fuel market conference that I attended with chairman Wyatt Buck and our strategic advisor Sashi Davies, one of the top traders in the world.

“We were just inundated with offers.”

The demand is coming, but at these low prices most undeveloped projects globally won’t come online.

“It incentive price used to be US$60/lb, now it is US$80/lb. The spot price is currently US$56/lb, so the price can only go one way,” Craib says.

“It has to go up.”

Nuclear power plants waking up to the impending shortage

The number of tonnes contracted by utilities this year has almost surpassed the entirety of 2022, with another next wave of contracting set to kick off in September/October, Craib says.

“124Mlb was contracted last year. Year to date 118Mlb has been contracted,” he says.

“[Utilities] have been quite aggressive with their contracting.”

Boss has held off signing contracts but expects to start ‘layering in’ deals with between 6-12 utilities all up.

The first deal will be announced soon, Craib says — “before the end of the year”.