Hi Guys, I would think that BKY will have a force majeure clause...

Hi Guys,

I would think that BKY will have a force majeure clause in their LT contracts that they will be able to exercise. However, bigger picture, it means that someone who thought that they had locked up a whole heap of yellowcake is suddenly short.

The political risk increased materially, from its already high level, for BKY when Rajoy was ousted as President and the Spanish Government lurched to the left. I certainly took note of that.

Even Marin Katusa has been warning of European regulations and avoiding it.

Remember that BKY's cash position has an offsetting liability in that the cash has come from a con-note. Under what terms the Omani's can demand repayment, I am not sure.

The issue of uranium mining is highly emotional and I am not really surprised that this was leaked by some inside source. We are seeing more and more of this politically - likely some misguided green employee who thinks that the world can decarbonise on wind and solar alone.

Whilst the importance of this to the supply side will take some time to be fully appreciated by markets as it is not current supply but future supply that is being impacted here, it is going to be hugely material IMO in terms of the marginal unit of supply - Salamanca was slated to produce 4.4m lb p.a. or 3.3% of current primary supply (130m lb p.a.) once in full production.

I can't see a better sector wide set up within commodities and over the course of this year it has only gotten better and better - both on the demand side and the supply side discipline.

I genuinely commiserate with investors who were too overweight BKY based on the narrative being provided by management.

Cheers
John