Daniel Major: Why Uranium Must Reach $60 by 2020
Daniel discusses his new uranium forecast model and how he thinks that it’s very conservative. In the model, they assess what uranium price is needed to bring projects into production. It assumes that all management is fantastic, that financing is practical, permitting is relatively fast, off-take is secured, and that mines will be built fairly rapidly. They wanted to be able to prove that their project could be incentivised in the mid-fifty dollar range.
Daniel says, “What we are showing is that the uranium price needs to get up to $60 by 2022, most projects at that price are short term in nature. To maintain production and meet demand by 2025 you will need much higher prices.
We plotted the top ten producers and where they are today, and where they will be at thirty dollars. The reality is that these top ten projects will continue to provide more than 50% of all uranium production. If anything happens to one of these, it could bring about a black swan event.
On the financing side, we have letters of interest from several banks. GoviEx is run pretty lean. We are good through next year.”
Talking Points From This Week’s Episode
• Prices higher than $60 will be required to keep up with demand by 2025.
• Steady price increases over the last month are a good sign.
• Buyers are getting nervous about the future, contracts have to be negotiated higher.
• Collin and Daniel will be attending the Sprott Asset Symposium in Vancouver – July 25th-28th
Daniel Major is Chief Executive Officer of GoviEx and is a mining engineer from the Camborne School of Mines in the UK. His career spans over 25 years in the mining industry where he has established a solid track record initially with Rio Tinto at the Rossing Uranium Mine in Namibia and later as a mining analyst with HSBC Plc followed by JP Morgan Chase & Co. in London. More recently Mr. Major was Chief Executive and later Non-Executive Chairman of Basic Element Mining and Resource Division in Russia, and held leadership positions in several Canadian listed mining companies with exploration and producing assets in Canada, Russia, and South America.