-The Sprott Physical Uranium Trust seeks funds
-Uranium spot price falls by -1.5% for the week<\/strong><\/p>\n
By Mark Woodruff<\/p>\n
Kazakhstan uranium producer Kazatomprom last week reported higher second quarter production and sales and reaffirmed 2021 production guidance.<\/p>\n
However, management flagged first half uranium production was below internal expectations and warned “final year-end volumes may fall short, if the wellfield development and supply chain issues continue”.<\/p>\n
The uranium miner, with production representing approximately 23% of global primary uranium production in 2020, produced circa 8mlbs U3O8 in the June quarter, 9% more than in the same quarter last year.<\/p>\n
The higher production was due to the impact of covid-19 in 2020, which resulted in lower production. First-half production was similar year-over-year.<\/p>\n
Meanwhile, uranium sales increased significantly for both the quarter and half-year due to seasonality and differences in the timing of deliveries for 2020 and 2021. Group sales rose 99% to 12.8mlbs in the second quarter.<\/p>\n
The higher uranium spot price in 2021 had a positive impact on Kazatomprom’s average realised price compared to 2020. It was up 3% at US$29.60\/lb, although the average month-end spot price declined -7% to US$30.85.<\/p>\n
Company news<\/u><\/p>\n
The Sprott Physical Uranium Trust (SPUT) has lodged a shelf prospectus to raise up to US$300m of fresh units. This is a necessary step in establishing an “at-the-market” issuance facility, a cornerstone of SPUT’s distinct approach to raising capital.<\/p>\n
This mechanism allows listed entities to raise funds without engaging in a formal equity offering. It’s a process that will allow the trust to incrementally sell shares as and when demand arises, and then execute more frequent, smaller purchases in the spot market.<\/p>\n
The “at-the-market” faciility is expected to be operational by the end of August.<\/p>\n
Uranium pricing <\/u><\/p>\n
TradeTech's Weekly Spot Price<\/strong> Indicator last week fell to US$32.00\/lb, a -US$0.50 decrease from the prior week. The Indicator has increased nearly 7% so far in 2021. <\/p>\n The average Weekly Spot Price Indicator in 2021 is US$30.38\/lb, US$0.67 above the 2020 average.<\/p>\n A total of four transactions were recorded for the week, involving just over 975,000lbs U3O8 equivalent.<\/p>\n It was an extremely quiet week, according to TradeTech, due to a lack of firm spot demand. Summer holidays, vacations and uncertainty as to how the newly launched Sprott Physical Uranium Trust may impact the market also contributed to the malaise.<\/p>\n TradeTech's term price<\/strong> indicators are US$33.50\/lb (mid) and US$35\/lb (long).<\/p>\n For several months now, the trend emerging in the term uranium space has been toward smaller purchases for shorter and nearer-term deliveries.<\/p>\n However, sellers' attitudes seem to have shifted, at least for now, with several willing to compete aggressively for sales if the buyer is a utility, regardless of delivery period or material form, explains TradeTech.<\/p>\n<\/p>\n Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)<\/a>" – Warning this story contains unashamedly positive feedback on the service provided.<\/em><\/p>\n<\/p>\n<\/p>\n