PUTIN AND CHINA GET COSY WITH GAS EXPANSION

...and why you should care that SWU is mooning

Greetings Contrarian,

This is The Next Big Rush, a daily newsletter to keep you in the loop with mining investing. Where we get together to laugh at our government’s bad energy policies. 😩

Here’s the juicy stuff: 

  • Swu is Swuoaring

  • Fission 3.0 Kicks Off Winter Drilling Campaign

  • Putin Getting Cosy with China Gas Expansion

SWU IS SWOARING 🚀

Let’s get real. If you’re investing in uranium in 2023 and don’t understand the nuclear fuel cycle, you need some help. Grab a drink and a bag of Doritos and let’s run through this in exactly 57 seconds in 4 steps. (Don't laugh, we timed it)

1- When uranium is mined, it is processed into yellow cake, or U3O8 as we know it. 

2-The next phase, done by a completely different company, often in a different country, converts it into a gas, called UF6.

3-The third phase (again, by other folks far far away) enriches the material from a uranium-235 concentration  (the juicy explosive stuff) of 0.71% (naturally occurring) to about 2-5%. 

4-It is then turned into pellets about the size of a gummy bear. 

OK, nerd - why does this matter?

It means that since uranium is mined for nuclear power generation, the supply / demand, and price structures of the rest of the fuel cycle can sometimes work like a crystal ball that sees into the future.

The price of the "service" for enriching uranium has been explosive (bad pun, we haven’t had coffee yet). This is called SWU. The price for UF6 is also booming. 

Take a look at this chart by UxC:

OK, but WHY does this matter for the miners?

Alright….here’s the deal. High SWU prices means lots of demand, which means that enrichers will have to input more pounds of yellow cake to produce the same amount of enriched output, which means more demand for yellow cake. It becomes a seller’s market. And last time SWU price started to perk up (hint: 2006)…..this happened.

Boom.

Capisce?

Speaking of uranium, here’s something you won’t want to miss.

FISSION 3.0 KICKS OFF WINTER DRILLING CAMPAIGN ⛏

We are biased as heck, since Fission 3.0 has a marketing relationship with us, but if these guys can continue to hit the uranium grades they found late 2022, you’re going to hear about this story so much you will want to get a new Twitter account to block all the gloating. 

Back in 2022, they hit uranium in a few different holes at Patterson Lake North, with the best one being 15m @ 6.97% U3O8 (and a small 1m section of a ridiculous 59%+ grade within that).  

That’s better than Nexgen, better than Fission, better than fill in the blank.

The new campaign is a 20 hole program where they are trying to understand the shape and size of this deposit.

Will they be able to hold the super high-grade?

Will they find the source of the deposit?

Check out more on what to expect here (we like it at 2x speed too, no hard feelings):

PUTIN AND  CHINA GET COSY WITH GAS EXPANSION  🙊

While the destruction of Nordstream 2 by the CIA an unknown saboteur with a very large hammer is still fresh on our minds, Russia has been strengthening their trade with China by expanding their export capacity to over 60 million cubic meters per day. 

We did the math and if the gas was beer, it would keep any Vancouver geo going for at least 3 days. 

Gazprom has consistently increased gas exports to China through their Power of Siberia gas pipeline. In 2022, China regularly requested more gas than the daily contracted amount and Gazprom was able to fulfill these requests. Obv.

Meanwhile, oil/gas bears cheer at the recent lows, pushing the notion that we’ve avoided an energy crisis that’s been in the works due to supply constraints and underinvestment for at least 5-8 years. 

Cute.

EVERYBODY LOVES GOLD 🏅

Don’t they?

Twitter sentiment check:

Chat tomorrow,

The Editor

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.

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