Chuck Yates Needs A Job

0:21 So drive over. Are you a ruscos guy or a Wycles guy? Probably

0:29 a Wycles guy, but if we're really going to go there, I'm going to go check stop on the way to Dallas. Oh, yeah, totally. Yeah. So I've got a buddy that's a tour manager and he was Miranda

0:38 Lambert's tour manager, Jennifer Nettles. Now he's doing Parker, McCullough. And anytime they're touring Texas, he figures out how he gets through West. And he's got, I mean, I think they're

0:50 what, 12 Kalachi shops there. He's got a list of three. So you can go up to three different places. But if you go like, well, I want to go to, you know, X, he'll go, no, it's not as good as

1:03 a little Czech bakery or whatever. Yeah. Yeah. So I agree with you. I always, I take the back weight of Fort Worth so I can drive through there That's good stuff.

1:16 Cool. Thanks for coming over. Well, thank you so much for having me in the house. Yeah, absolutely. All right. So Brian Nelson, mutual friend of ours,

1:26 I think sends me a text. It's late at night. We're at the World Omen's poker tournament. Oh, you really need to have this dude on to talk about nukes. And I barely remember the text because maybe

1:40 I was enjoying the party and text back. Sure. Anytime, call me and you call me. And I felt like we talked for about an hour on the phone as I was driving somewhere And I wish we would have

1:50 recorded that. So if there was only 15 minutes, believe it or not. Really? Yeah. If we can somehow duplicate that. The magic. The magic. Yeah. I learned more about nukes in that 15 minutes

2:02 than I think I had my previous life. So

2:07 we're going to circle back to cars at some point, but level set me nukes. What were we talking about? Kind of, you know, I'd watch your show a few different times and you guys have danced around

2:20 the nuclear topic, but you never really had anything, especially on the fuel side. You know, a lot of these governments talk a big game that we're gonna launch all this stuff and we're gonna

2:30 triple our nuclear capacity. And my first question is where's it gonna come from? Right. So, if we talk about just by the numbers today, the world's consuming 196

2:42 million pounds of uranium, but only producing 155 million pounds. And it's been in deficit like that for years. And so, we had a lot of above ground supply that was floating around post Fukushima.

2:55 Some of these mines didn't shut down after Fukushima happened. Okay. And Japan had a hard shutdown of 50 plus reactors. And then Germany went from 22 down to six. And I don't even know. Like I

3:10 haven't kept as close tabs. I don't even know if six are even running anymore. you know, it'd be a big deal for them just to restart. I think the six are down. I don't, they went with this whole

3:20 energy, energy Vende, where they spent500 billion on solar and

3:28 their carbon emissions went through the roof versus France. And it's just, you know, solar panels are great for Texas, but I don't know if it's so great for Germany. It doesn't really shine as

3:41 well. And then wind, you know, a lot of the energy companies kind of bounced off of that. So I think even BP and Shell packed it in. So everyone's really starting to turn to the nuclear option.

3:54 And what happened 14 years ago is kind of in the rear view mirror. And just to give you an idea, like the United States consumes about 45 million pounds of uranium. A couple of years ago, we

4:06 didn't even produce a million pounds. I don't even think we produced a quarter million pounds So, we're. probably on a run rate this year for 25, around 3 to 4 million pounds, and with the

4:17 existing companies out there, we can get up to 10 million. But we still got to import the rest. And then you hear these pledges by 2050,

4:27 we're going to triple our nuclear output. And just look at the US for about 94, 95 gigawatts. And we're going to go up

4:38 to 300, 400 gigawatts We can't build as fast as China could, you know? So we look out, we look out across the world and you're right.

4:49 We saw the shift in France, France was, you know, call it 90, nukes on

4:57 stuff, and they were talking about wanting to get to 50, but they've since reversed that

5:04 Germany did shut down. Taiwan's talking about shutting down. And there's a referendum to bring them back. And if I'm sitting there with the Chinese threatening to invade me, I think I want nukes

5:19 as opposed to having to rely on tankers of LNG. It seems pretty easy that the Chinese could block those tankers. And from a cost basis, if you get in a real serious situation, I would think those

5:32 tankers would get very expensive trying to transport back and forth.

5:36 When it comes to uranium, what's unique about it, it's so easy to store. You know, whether it's in different forms, whether it's like in fuel rods or if it's just in rock, in ore. Yeah. You

5:49 know, I think when you had oil go negative, part of the reason like it was with the ETF, USO, and then there was some storage issues here in Texas as well, right? And I had friends say they

6:00 wouldn't put oil in their swimming pool and wait it out. Yeah, no, we were renting frat tanks to put oil into. Yeah, that was crazy So, I mean, we basically run away else and just throw.

6:12 Uranium in it in effect pretty much. Well, you know, a lot of the uranium would be stored at the utility site. Okay, but you don't have Overcapacity you could just always add more. Yeah, you

6:24 know, but is it radioactive meaning Do we have to have some sort of shield around it or depends on the grade like here in South Texas? 01 maybe 02 It's like, you know, it's an X-ray. Yeah, it's

6:40 not very high at all. I've been next to Uranium coming out of the ground with a little Cinellometer that's You know, giving you that sound you don't really have anything to worry about in Athabasca

6:50 Basin in Canada You can get sometimes get grades 20 30 Uranium If you were a mine worker down there in six months, you wouldn't last long. Okay, you know, it's so it just really depends on the

7:02 grade got you so Walk me through this.

7:10 Where are we getting uranium from today? 'Cause you said what, 145

7:16 million pounds? 155 million pounds is being produced today. The number one producer in the world is Kazakhstan. Okay. They have 40 of the market. Number two is Canada with 20 of the market. And

7:32 these are just two companies. So two companies control 60 of the market And then you have other players out there, like Australia, Russia, Uzbekistan, Namibia,

7:47 the US to a smaller degree. And aside from that, there's not

7:53 much else. Now, okay, so that's who's mining it out of the ground. Yeah. You hear when we talk about nothing about New York, so these are gonna be stupid questions But you hear when we talk

8:07 about. I ran their capabilities of upgrading uranium. What do they do to it after it comes out of the ground and before it goes into the nuke plant? Sure, there's a fuel cycle and it lasts about

8:23 18 to 24 months just to take raw ore and put it in fabricated pellets that would go in a fuel rod system, right? So you first you would take the uranium, here in America, it would wind up at

8:38 Converdine, which is owned by Honeywell up in Metropolis, Illinois. And they're gonna convert that uranium ore into a gas, which is a uranium hexafluoride, UF6. There's two different ways to do

8:51 it. You can do it wet and you can do it dry. I don't know enough to be able to talk about it in length. This is a great dirty joke in there, but I've lost my fastball and I can't make it, so

9:02 anyway. So after it turns into UF6, Now you gotta send it to an enricher. You have two different isotopes of uranium, 235 and 238. You spin out the 238 and you have the 235 that's fissile that's

9:15 gonna create the energy for you. Now, there are three different grades of uranium really. The typical one gigawatt light water reactor or heavy water reactors that you see out there in the world

9:29 are about four to 5 enriched uranium. Not very high All these new small modular reactors around 15, 20. So they call it high assay, low enriched uranium, where the one I was talking about before

9:43 is just low enriched uranium. And then it's gonna go from, and if you wanna make weapons grade uranium to make the big bombs, you gotta be 90 plus percent. And then start involving stuff like

9:56 plutonium in it and all kinds of other fun things But

10:02 after you enrich it, now it's gotta go back

10:07 and they're gonna turn it into these little fuel pellets about the size of gummy bears. Okay. And you might have, you know, 20 or third, I forget how many pellets go in a rod, but you'd have

10:17 like 100 rods in a fuel assembly, and maybe three fuel assemblies that get dropped into water, and they throw an electrical charge that uranium gets really hot. It takes that water, turns it into

10:29 steam, and the steam hits a turbine. And there's your power generation. So on a nuclear power plant, you know, a one gigawatt power plant is going to generate about power for about 700, 000

10:41 homes. Got it. And the power that comes out of a uranium gummy bear is about 17, 000 cubic feet of natural gas or one ton of coal. Okay. So it's super high energy density, and you get, you know,

10:58 good for the amount of energy spent versus the output you get, there's nothing better than uranium. but it's a very tiny space. You've got two players that control 60 of the market, so it's like

11:12 OPEC plus plus, right? And

11:17 if you were to, the prevailing price right now is like72 spot, 71

11:22 spot, right? And the long-term contracts are at80 floors and they're typically trading around 120 to 130 ceilings right now. So the market's gonna be short. Yeah, the market's gonna be short and

11:35 there's potential with there won't be any ceilings. Okay. And so at80 a

11:43 pound, the total like fuel market, if you were just to buy everything at 80 right now, is only16 billion per year.

11:51 But it's 9 of total power generation around the world and almost 20 of the United States, 75 of France and China by 2030 will pass US and power generation in nuclear They're building 10 reactors

12:04 every single year. 10 new, 10 new, 10 new, so, you know, they got 40 plus, almost 50 in the pipeline. And they completed five hours. And how are they doing that? Did they kind

12:16 of take the French approach of, let's just adopt one kind of design, if you will, and just replicate it, and that's why they can do it cheaper. Exactly, it's standardized. That's what they did.

12:27 Yeah, they standardized, and as they went along, they incrementally built up their capacity and added more. Okay So the interesting thing to me is we, you know, prices and signals, right? And

12:43 so if it's worth more in the future, market thinks we're gonna be short. Is that a function of limited resource, or is it just a function of economics,

13:00 you know, if you'll pay me 110, I can actually go mine more of this stuff out of the ground. It's just costly or these days than it was 50 years ago or whatever. Or are we actually scarcity? Do

13:13 we not? It's a combination of both. Okay. So let's go to the first part and just give you a little history here. It's like 1979, we had the Three Mile Island incident, right? And then a lot of.

13:25 Nobody died. Nobody died People fall off the roofs of homes installing solar panels and die versus any nuclear accident that's ever happened, which is kind of crazy, right? So post '79, a lot of

13:40 stuff started shutting down. You saw a lot of big energy get out of the uranium space in the early '80s. And then '86, you had Chernobyl, and that was a nasty one So post Chernobyl in the '90s was

13:47 a thing called megatons to megawatts.

14:00 So Russia and the United States were downblending Uranium or warheads and then, you know, maybe about 13 to 15 million pounds was hitting the market, maybe even more, but I know it immediately.

14:12 So that eventually got into a nuclear reactor and turned into power? Yeah. Okay. That makes sense. You know, that's probably the best way you can use it, right? You wouldn't want the, the

14:23 former. Yeah. Exactly So, uh, after megatons to megawatts, cause that, cause Adam prom came to ascendancy. So like from the early 2000s, it was really the nothing company. And by 2016, it

14:37 was producing 60 million pounds of uranium a year and all by in situ recovery. So they were drilling for it. And since 2016, they really haven't had any growth. And you know, you also had in 2011,

14:51 Fukushima happened And so Japan went down with almost all the reactors off in

14:58 short order and then Germany. you know, did the same. So you had an overhang. Cameco, the second largest producer in the world, shut down MacArthur River from 2018 to 2022. That was a 25

15:11 million pound of your mind. And they were just buying in the spot market to help balance it, 'cause it's cheaper to buy in spot than to produce it. Okay. Yeah, so Uranium's low was probably about

15:21 18 bucks in 2016. And the spot market, and by January of '24, it ran up to 107 And we've had a big pullback, and it got down to about 62, and now we're in the low 70s. And that's just happened

15:37 in the last couple of weeks. And I think a lot of the hesitancy is fuel buyers in Uranium space, it's kind of interesting. They're not really incentivized on price, like you would think like in

15:51 the energy space, they would have a trading desk, right? Maybe the biggest players in the business, like a constellation or a Duke, would have something like that. everyone else is, they buy it

16:02 when they need it. And the people - Well, it goes into the rate pace. Yeah. So you mark it up and you earn a return on it, and who cares, 'cause the rate payers are paying for it. Yeah, and

16:13 there's not an incentive to buy Lowe's so high. Right. In this space, you know. Well, you know what there is? When you work for a utility, there's no incentive to buy Lowe's so high. There's

16:24 also a huge incentive just not to look stupid. Yeah Bought on the forward curve thinking it was a good deal and prices dipped below that. You had to go to the rate payers and say, Oh, paying a

16:36 little more 'cause we locked it in. You just look stupid. That's what happened in 2007. You know, food

16:44 contracts were going off north and 90 bucks back in '07 dollars and then Fukushima happened and then the contracts fell all the way down to 30. Yeah. You know, so some of these guys remember that

16:56 No, that's absolutely right.

16:60 The, um, a lot of incentive, I mean, a lot of behavior can be, uh, based on it. I just don't want to look stupid. Yeah. That's correct. Yes. So bottom line, when you go from a three mile

17:12 island all the way till now, you've had an underinvestment in uranium space for about 40 years. And that sometimes the price was so low. It was because, you know, there's no justification to go

17:24 out there and drill and explore for more Now, the second part of your question was what, just for a moment. Yeah, it was kind of, if we, you know, I always talk about, when I talk about oil

17:36 with people because I always use the joke, my mom. When I'm talking to my mom about oil, mom thinks oil is kind of like a balloon, meaning you drill through it, you pop it and the air comes out

17:49 and it's gone. And I always say, no, mom, you're getting eight to 10 of the oil in place out It just becomes uneconomic to produce. So if you ask me, how much oil is there in the world? I'll

18:03 always tell you, tell me the price of oil, and then I'll tell you how much we have, 'cause it's almost an inverted

18:12 pyramid, right? Yeah, yeah. Or triangle, low prices, there's only this much oil that's produceable. 500 oil, I could produce a lot of oil for you. And so my question was, is uranium like

18:26 that, meaning we got a lot of it, if we get higher prices, we can go find it. Or is it more like the balloon, we pop it, the air is out of the balloon, never to be found again. If that analogy

18:37 makes some sounds - If there's higher prices, you can go found it, and it's already known in a lot of places, you just need much higher prices to make it economic. Yeah, okay. Like Namibia,

18:47 there's lots of uranium there, but you know, they start using numbers like parts per million and stuff like that. Right.

18:57 That kind of area, you need well over100 to be profitable. Got it. You know, those weren't the same numbers a few years ago. People had their PEA as like a preliminary economic assessment. And

19:09 I'd probably say costing is jumped 40 to 50. Oh really? In the last five, six years, yeah. 'Cause the, you know, in what I would say, you know, oil and gas technology has gotten good that the

19:23 cost structure

19:25 has actually, or the technology's unleashed more. So in effect, you can say it's been cheaper. I don't know if that's actually true, but you're saying on uranium, it just costs more to get it

19:38 out now. And what is that? Is that just general inflation or? Yeah, I have access. I'm lucky to a couple of people who've really been in the game for a long time. And I actually asked him this

19:48 question last week, a guy named Bill Sheriff, who's done a lot here in the uranium space

19:54 And what he told me was it's like uranium explorations in the Stone Age kind of. Okay. We haven't really advanced off 1970s technology 'cause we haven't needed to. And so as I told you on the phone,

20:08 we just drilled to a certain depth about 800 to 1, 000 feet and we

20:14 stopped. But now they're starting to be talking, I know in New Mexico being able to do laterals for the first time and maybe a depth 3, 000 feet But now there's an economic incentive for that. But

20:26 the biggest problem because in the United States, Uranium, it's such a death. 'Cause Acosthen

20:33 was producing so much, but they were also devaluating their currency, or devaluing their currency so much, that US producers, we produce 40 million pounds of Uranium in 1980 and yet we fell below

20:45 a million pounds. And we're still the world's biggest consumer. Yeah.

20:54 That drop off really meant a loss of talent. So either they went to the oil industry, they got some mining company, let's say Copper, looking for gold. And if you look at some kind of engineer or

21:07 geologist who might've been 30 or 40 years old in the early 80s, they're one of three things. A really senior person in the space, they're retired or they're dead. You know, and when I first got

21:19 into this as an investor back in 2018, 2019, might've been only 500 professionals in the uranium space across the United States.

21:29 So it's pretty shocking. And when you look at like the world, if you add up every single uranium exploration company, every single uranium producing company and add up all their market caps, it's

21:41 less than the market cap of EOG. Really? Yeah. So it's a small little space and you know,

21:52 small talent pool they have. These guys can do well, but in terms of really hitting scale, there's going to have to be other players that come in here, whether it's funding from the utilities like

22:02 they used to do. A lot of the mills in the 70s and 80s were funded by the utilities, and then it's just exploration, like every single oil and gas company that was a major player then was exploring

22:15 for uranium, whether it was mobile or Exxon or Phillips or BP or Shell or Total or Getty Oil,

22:26 Chevron, Texaco, you name it. Yeah. So we look at

22:46 the world. We feel like we have more momentum towards nukes with notable exceptions. We always joke on the podcast. If we invented nuclear energy you today, we'd be saying we solved it. We're

22:48 good, you know.

22:50 And so, I mean, you do, you know, you hear a lot about big tech and looking at nukes, the Microsoft Three Mile Island restart, you know, all these types of situations. So we look out over the

23:06 next five to 10 years, maybe even go out 15, however long you want. Do we see more demand for nukes outside of China building them? Is India building them? India, Saudi Arabia, UAE, Russia,

23:24 the list is pretty extensive. And there's a lot of approvals for reactors, Czech Republic and Sweden. You're seeing a huge adoption in Europe. And just this past week, Germany rolled over finally

23:39 and quit putting the stick in the sprockets of France about like, what's clean energy over there? Because nuclear would never qualify as that is green energy. So now that that is, I really do

23:52 think the next thing to follow is really Germany reversing course all the way and taking like those six reactors and lighting them back up again. And there's a weird phenomenon too. So like a one

24:04 gigabyte reactor, we're not even gonna get to the SMRs, I'll get to that in a sec, but

24:10 each reactor will consume about 450 to 500, 000 pounds of uranium as they are today So if you bring on a new reactor, you

24:20 gotta do initial fuel load of 15 million pounds,

24:24 and then it's subsequently 500, 000 pounds per year. So we've got 66 or 68 reactors where we poured concrete and they're in the pipeline. So now if you wanna look at that and say, let's say it

24:38 just rounded up to 70 times 15, now you're at a100 million number just on startup, plus the 70 times 500, 000 which would be another 35 million pounds per year. and we're producing what you say

24:52 155 a year and right now consuming 195? 196. 196. So we're oils when maybe a 1 growth rate? Yeah. Uranium's at 3 at a base case 'cause we haven't even figured out what the SMR demand's gonna be.

25:05 Yeah. Right? So the SMR's getting into the game, whether it's Rolls-Royce or New Scale or Ochleau, you know, like Chris Wright or Energy Secretary was on the board of

25:21 Ochleau. So if we were to hit the triple versus what we have today, our nuclear power generation by 2040, 'cause there was some stuff saying they might be leaked out of the White House, you don't

25:32 have to build 900 plus 300 megawatt reactors within that time. That's only 14 years away. Yeah. It's like wartime efforts, you know. I'd talk to an investor and I just don't know if it was

25:47 confidential or not So I want to say a name. But they're trying to get a nuke built in Texas. Oh yeah. Kind of as we speak, and so it does feel like potentially there's momentum for

26:01 it. Young people don't seem to be scared by nuclear energy. No. As much as previous generations. Memories are short, you know, the, what do you call it, like belief system of what they're

26:13 saying, like you need to be low carbon emissions, no carbon emissions, you know, good for the planet You know, I'm all for energy, whether it's oil, natural gas, nuclear, right? 'Cause if

26:26 you're pro-energy, you're really pro-human. You know, a lot of times we hear people argue for the environment at the cost of who, right? Well, and I always say, if you don't start the

26:36 conversation with, hey, I recognize the lifespan on average doubles once we start burning hydrocarbons,

26:48 burning dung and trash in our houses for fuel, then I don't think you're really serious in terms of making the trade-offs. And sure, we all wanna clean our planet. Sure, we should be worried

27:01 about what is carbon doing up there. But at the same time, it's a trade-off, you know? And so give me the state of SMRs. I mean, does stuff work in terms of the technology? What are the hurdles?

27:10 When am I going to do

27:17 my back to the future, have my nuclear reactor on the back of my time vehicle? I'm not such a pro on the SMRs, but I do know a little bit, right? So what I do know is the way that it's designed

27:30 or a lot of the designs, I think there's like 40 or 50 SMR companies that we're competing for market share. It's just like when the internet first launched, you know, and you have all these

27:39 companies like Dr. Coop or SG's, you know?

27:45 Some of them use like a gravity technology. See, like the biggest problem with food, biggest problem with Fukushima is they lost their backup power. And that's why it caused the meltdown in the

27:54 reactor core when, when they initially took the hit. So one of the designs, they'll just use gravity. You can walk away from it and they'll be able to cool off the reactor. Now, like molten salt

28:06 and some of these others, you know, you're getting up to three X, the meltdown capacity It could really rise without anything happening, which is, you know, to my understanding, way above

28:20 what's necessary. So you've got some headroom. Yeah. Um, these SMRs are what you'd call modular. You know, people usually think about a big reactor for Houston or for the Metroplex or something

28:35 like that. Imagine having a 100 megawatt reactor, a 300 megawatt reactor, Powering an allen or lubbock or middling.

28:44 you know, that kind of deal. So, and

28:47 if you have wild growth in an area, you just daisy chain 'em. And a lot of the plans for reactors are going in or where reactors are already at. They always like, you used to tell you where's the

28:56 best place to find a gold mine, right next to an existing gold mine, right? Same thing in the oil business, I would assume, right? Yeah, best place to find oil and gas in the shadow of a

29:05 derrick. Yeah, yeah. So, these SMRs can be built much quicker than these big reactors, I think Vodal 3 and 4, because

29:17 a lot of red tape, we're talking 12, 15 plus years to build these reactors and cost overruns and all this other stuff. And if you look at China, they can do it in five. And what I found really

29:30 surprising was the last announcement that they did was funding 10 more reactor builds for 27 billion, saying, well, now they're building for 27 billion a piece.

29:42 Yeah, so the cost is going down, but when it can bring it back to uranium, you know, uranium is a lot different than natural gas, but it's only about the ore itself is only about 5 of the op-ex,

29:55 so the reactor. So you could have a massive price spike in uranium. Now, the fuel buyer still don't want to pay a dime more than what they're paying now, but in reality is then then build of the

30:08 customer is much less impact than if, you know, you went for four dollars to eight dollars in that gas. Yeah. Oh, I got you. I got you. So

30:21 we got 67. You're saying right now that we've poured poured concrete around the world, okay, in different phases of development, usually between eight to I've seen for the years, I've been

30:33 following about eight to maybe 14 new reactors come online each year. We've had a number of reactors go offline, but what's If you have two reactors or let's say 400, 500, or 600 megawatts go

30:47 offline and the next reactor that comes on is 12 gigawatts, it's one for two. So it looks like the reactor count over the last few years is fairly stable, but what you're actually having is more

31:01 power generation than there's ever been because these reactors are so much bigger And so there's 439 operable reactors around the world and out of that number, 18 of them are operable Japanese

31:15 reactors that still haven't restarted yet. So the number is much closer, probably about 420. So now if you look at 420 reactors and bringing back on the 18 Japanese reactors plus another 67

31:29 reactors, you got some real growth. And again, we haven't even talked about SMRs in terms of trying to factor in what that looks like, which is pretty impossible right now. And I don't know that

31:41 it's gonna happen, but I've been calling for it. I really do think AI is an existential threat, possibly to the United States in our way of life. We cannot let the Chinese win this. We just can't.

31:58 We can't let the Russians win it, Chinese, any of our adversaries out there, we need to win it And at the end of the day, AI is smart people and electricity prices to run the data centers. That's

32:14 it, and so the way to do lots of cheap electricity is at least in some way, shape or form has to include nuclear in that equation, I think. It does, but if you're looking at overall power

32:32 consumption, AI is in a drop in the bucket in terms of growth versus what's already going on You know all the headlines are restarting the one failed reactor Three Mile Island, right? Or bringing

32:45 back Palisades in Michigan and potentially bringing back another reactor in Iowa. We're only talking about three reactors and they're much older reactors. We're not talking about like all the new

32:55 ones that are coming online and how much power they can generate, you know, a single reactor can do 700, 000 ohms. Right. You know? And like that Diet Coke can right there, it's all uranium you

33:09 would ever use in your entire life for powering your house and anything that you would use electric. Yeah, well, I've heard something to the effect of that and then to get rid of it, put it in a

33:24 barrel of oil, concrete, throw it down, however far and we'll never hear from it again. Well, I think it's Paducah, Kentucky and

33:35 I forgot how many Walmarts It is for storage area. But if you could recycle that, the number that I've seen or been presented, like I haven't validated it with 700 years worth of power for the

33:46 United States, just kind of gives you an idea of how many bombs we make.

33:53 But there's other reactor technologies called like an MOX reactor that's kind of a mixed reactor of uranium and another fuel. And it's just not coming to my mind. Oh, it's just recycled fuel And

34:07 then terra power, they're all about taking spent fuel and using that for power, right? So

34:16 that's a cheap source, but again, you know, everything that I started watching the military channel, maybe eight or 10 years ago, and the one thing that started to hit me that I never thought

34:27 about before is just logistics. And, you know, I asked the Germans how they felt when they hit that Russian winner, right?

34:37 People say, oh, well, what about Thorium? Or what about this next new technology? Are you going to shut down a reactor you spent10 billion on because of the new technology? You're going to keep

34:46 that thing running. And if they do build it with a new technology, OK, great. It works. Now, build it at scale. And how long is that going to take you? So the Uranium business is going to be

34:60 around for quite a while. And in 2019, 2018, when I looked at this as an investment first, the market was only growing about 1. You had a lot of these reactors shut down. And now they're

35:12 extending every single one of them. And you have the willingness to build new reactors. And I think it's in Wisconsin, one of the old reactors, they want to turn into a new SMR. So yeah, there's

35:30 a lot of movement on this side. But again, it's the logistic piece and it's what concerns me as a fuel because the big players like Kazakhstan and Kazatomprom, they have a big decline rate starting

35:44 after 2030. And they also have a sulfuric acid shortage. So in the West here, we use oxygenated water to melt the uranium out of the sandstone And over there, it's sulfuric acid. And they have a

36:05 shortage of it. There's a couple JVs. They have one with Cameco, they have a JV with Orano, they have a JV with Uranium One, they have a JV with one or two of the Chinese, big nuclear giants

36:19 over there, CNNC or CGN. And they're not able to get what they need to get out of it There's a field called Budenskoy at 6 and 7. I think it was supposed to be producing 115 million pounds of

36:33 uranium this year. I think the run rates are around two million. So they won't have that acid or what they need until 2027. Well, when you have big producers like that, you kind of time shift a

36:46 year or two backwards. It means a very big deal in this space. Next gen up in Canada was another of mine, about 30 million pounds to come online. Originally anticipated around 27 The thought

36:58 process is 29, but with the Canadian government, they still are in permitting issues like all the way, they've got another hearing like February of 26. So they got a CapEx, I think around 22

37:12 billion Canadian, and they're gonna build a mine in less than three years. I mean, it's a lot of pressure. Yeah. And especially to bring 30 million pounds online. So that's kind of what's

37:23 happened is the data that a lot of these fuel buyers have had, was anticipating all these restarts and greenfield projects coming on time and online, like they thought they would, whether it's

37:35 legislation or permitting issues or just difficulty just getting stuff up and running, a lot of, there's a lot of misses in this space. Right. Yeah. Now that's interesting. So is there a use for

37:51 uranium outside of power generation and bombs? Our Navy. Oh, yeah, yeah, yeah, I guess I would kind of put that in both camps if you think about it. But I think a great use for it would be

38:09 for oil tankers. Okay. Right, but that really hasn't happened yet. Now my understanding on why that hasn't happened 'cause the Navy's been using in the submarine's nuclear for how long?

38:21 Battleships and the aircraft carriers for a long time, you know? you're vulnerable when you go into port. Yeah. Well, and I've heard the reason we're ultimately is they use a higher grade of

38:36 uranium. And we just, it's okay if we've got a bunch of Navy dudes guarding it, but to the extent you start using that for commercial tankers and somebody gets ahold of it, it can be weaponized

38:51 pretty quickly. It's kind of sad because one of my friends in college and my old roommate was a Nuketak on a sub and was on the USS Stennis and I don't know that answer.

39:03 Yeah, I've got a kid I used to mentor. He was on a AAU basketball team and mentored him. He wound up at the Naval Academy and wound up being a nuclear engineer. Works for Amazon now, it's a

39:20 really smart kid and I say that and he's 40 and he just got married So that sounded like a total boomer bag. Uh, I think OJ was the one that told me, you know, because I always said, why can't we

39:32 just use the, the reactors on the submarines down the end of the block? And he said, it's because it requires a higher grade of uranium and that stuff can be dangerous on the wrong hands. Uh,

39:46 yeah. Well, it's a lot of times it's what comes out of spent fuels. What's dangerous is where you get your plutonium from. Uh, okay. So that's the stuff that can make the dirty bomb. Yeah Okay.

39:58 So, and I know very little about it, but I've had some, you know, like, how would you say a brief cocktail conversations with people who do? Yeah. And that was the gist that I got, whether

40:08 alcohol haves my memory. I don't know. Fair, fair, fair enough. So if we, uh, if we look out into the world and we go, okay, we're short uranium. How do you play this? Investment wise, are

40:22 there mining companies invest in? I know there's the, is it the sprout?

40:29 Oh, so yeah, there's a couple of different things. Like the first mechanism that you're bringing up is the Sprout Physical Uranium Trust, right? So that's just for you to express a way that you

40:38 think the physical price is gonna go up. They

40:44 tag at different ports around, places around the world like at Converdine or at New Hope over in Canada, where Cameco's at or in France, where the Uranium sits and says, That's ours, that's what

40:58 we do. And they don't release the Uranium back in the space, they just hoover it up. And they did a really good job a few years ago of cleaning a lot of this excess Uranium up. I think they bought

41:08 over 40 million pounds. So the physical trust might have about 400, 45, closer to5 billion worth of Uranium right now. And I think it's 60 something million pounds they got, which sounds like a

41:22 huge amount, but our reactor fleet would eat through that a year and three months. Right. Right, and that's just the US piece. So outside of that, there's some ETFs like U-R-N-M by Sprott,

41:36 U-R-N-J, which is like the juniors. And then you have U-R-A, which is uranium miners and kind of a little taste of the SMRs like Ochlo and Newscaler in there. And then there's one called Nukes,

41:48 which I think is a great ticker symbol, N-U-K-Z, was got some of the bigger uranium mines, but mostly nuclear technology in it So you've got four different ways to play the ETFs, and you are A is

42:00 the largest, and I think their asset base is about, or assets under management is about two and a half billion, roughly, somewhere in there. And you are an M's a little bit over a billion. And

42:10 you are in J's, maybe a couple hundred million, I haven't looked, you know, recently on that. But yet these stocks are highly volatile over these ETFs, and the underlying stocks themselves are

42:21 very volatile. You know, in a bull market, you might have four, 50 pullbacks is like, can you stomach that? Yeah, I'm an oil and gas guy, nothing. So from 2000 to 2007,

42:34 the at uranium bull market, like you went from7 a pound to136 a pound. Flation adjusted, that's90, 190 now. Yeah, that's with government numbers, not like shadow stats saying what the real CPI

42:49 should be, right? So

42:54 there's a few, there's a smattering of, there's a smattering of larger size equities in the United States, there's Uranium Energy Corporation, there's Encore Energy, there's UR Energy and Energy

43:06 Fuels are the big four. And the Uranium is actually found in South Texas, Wyoming, Southern Utah, Western Colorado, Northern part in the central part of New Mexico and Northern Arizona is where,

43:24 you know, and I forget, did I mention Wyoming? Yeah, yeah, yeah. So yeah, that's where the majority of the uranium has been discovered so far. And what's really interesting to me is the pinion

43:37 mine over with energy fuels. They have these breccia pipe formations. Are you familiar with that? No idea. Think about like a soda straw. And you've got some kind of hard rock that is kind of

43:49 like an inverse of like a what do you call like a dome and oil and gas like the old days, right? Right. So the uranium is just going to melt through the rock. Like uranium will just naturally,

43:59 like you talked about seepage in one of your other podcasts, right? Right. And the Colorado River 40 to 60 tons of uranium fall into the Colorado River per year. Right. Yeah. It's just natural.

44:12 And so these soda straws will have a collapse feature. And the uranium will sit there and pour in and hit that hard layer rock in just over the millions of years.

44:27 just collect there. And I saw very like, I would call an esoteric US. Arizona geological survey, USGS video. When I first saw it had like 30 views, my eyes popped open, because they estimated

44:40 that there might be several thousand brettia pipes north of the Grand Canyon.

44:47 And given that what the numbers they were talking about, that it could be over a billion pounds of uranium there. So that pinion mine that's operated by energy fuels, it's outside of what the Obama

44:58 administration locked up in 2012 and then Biden made it a monument in 23 or 23. But they were finding grades upwards of, let's say, four and a half, four and a half feet or four and a half meters,

45:11 I think meters of 20 uranium, which is just absolutely lights out like the average grade in that area would be 06, which would be about five to six times higher than anywhere else in the US from an

45:25 and ISR perspective. New Mexico

45:36 and

45:38 Utah might be 02 to 025, 03 uranium. And you'll get some little bands of hire, but like they had several different drill cores or producing 7 plus uranium over a wide distance. That was crazy.

45:43 You talk about being very economic. You know, the average grade coming out, there's 164. And you just put a shaft down and shaft up. It doesn't, CapEx is minimal to be able to get this kind of

45:55 stuff So there's other breccia pipes in around there, but the big chunk has been locked up. And you know, the big hope is, you know, what the Trump administration's pissed everybody's 'cause

46:03 podcast the on lot a talking been I've, Yeah. stuff this of off lot that a unlocking of terms in do gonna

46:12 oil's at 50 and they are in the 50s. And my point has always been, hey, that's just Trump. He wants low oil prices. We know he wants low oil prices. 'Cause it's all about November 26th, low oil

46:28 prices, lower inflation. See, look what I did. And he's gonna get that hook line in sinker somehow, whether he's got to bribe the Saudis or whatever. And what we ought to be doing as the energy

46:41 business is gritting our teeth, knowing that's gonna happen, but then asking for stuff. Well, let us go mine for uranium there. Let's be entrepreneurial about it 'cause Trump, Trump will

46:52 probably throw Baron in with it Sure, yeah, sorry, Baron, you're going with him. I had to make a deal, you know? I mean, we should be asking him, permitting, all that type of stuff. Yeah,

47:02 New Mexico's another big piece in that.

47:05 In the '50s and '60s, Utah was number one and New Mexico was number two and they still have vast reserves over there, but no one's been able to touch anything, pretty much. Yeah, no, and that's

47:15 what we ought to be asking for. And we shouldn't shy, if you're an oil and gas guy,

47:22 Yes, you got to figure out how to mine uranium. I'm not saying it's easy, but that is a core competency of yours is extraction. Yeah. You know, so go figure it out. It's another profit center.

47:35 Yeah, and you speak about extraction. Most of uranium is done by water well rigs. Okay. You're not talking, not talking, bringing Homeric and pain out there

47:47 Exactly. Yeah. Exactly. Well, this is cool. So who do you want a phone call from? If anybody's out there listening, because quite frankly, I don't even know what your job is. Oh, I say as an

48:01 independent director on a uranium exploration company. Okay. Yeah. Got it. And so, so kind of as a board member, do you do consulting on the side, stuff like that or? Haven't really thought

48:15 about it that much. You know, it's, we've been focused on trying to operate and, uh, choose the properties that we have and which ones we're gonna move on first. We made a recent acquisition in

48:26 one and then we got a lot of options, right? So it's what's gonna bring the most bang for the buck without diluting our shareholders. Got it. Yeah. Got it. So being on the board of a company,

48:40 you want capital providers calling. Yeah. Well, it's not necessarily just capital. I mean, I know some people that are fuel buyers in the energy space here, right? For like the major utilities.

48:56 Yeah. And you've had a guest on named Kapi, and I love one of his comments before. He says, If you're gonna panic, panic first. Right. Yeah. Kapi's great. Knowing that we've got these big

49:06 shortages going on, I look at just Texas and ERCOT. Like I just saw something the other day where 52 of our energy's generated from solar in one day or one week. Yeah And it's. It's just

49:20 intermittent and then what kind of technology you can use to store it and how long is that gonna last? I think a lot of these solar panels are only good for about 20 years, unless there's something

49:30 new that I'm not aware of. When you look at nuclear, you have 60 year plans that have been extended to 80 years and some of them are looking at 100 years. So it's stability and you're talking, I

49:44 forgot which reactor it was, but 988 uptime, right? So it's base load and you say you're gonna win the AI race, you need base load power. No, that is absolutely right 'cause we were talking

50:03 about that this morning,

50:07 the

50:09 ability to turn on the lights when it's cloudy outside or the wind's not blowing It's really important, you know, and so totally agree.

50:20 But like, there's a company in South Texas, headquarters and corpus on core energy, right?

50:26 They just had a management change 'cause they were a little bit slow in the production side and they put in their press release, they're looking for someone from the net gas space to operate it. So

50:36 if you're asking me who I would like to talk to, I'd say more people from oil and gas because there's just not enough people to be able to get up to the numbers that we need to get to be

50:46 self-sufficient in the United States Yeah, no, that's right. And you know what's interesting is we're seeing that across the whole energy chain. We get called from solar companies, wind companies.

51:01 And I need oil and gas folks 'cause they're trained to be engineers. I have land use agreements just like that. And so, yeah, the, That is one of the things I tell young people, I know it's a

51:13 really volatile industry, but your skills are way more transferable than you realize, so. And I guess the other group I'd love to hear is anyone that's got minerals that'll be of interest to us.

51:23 There you go. Uranium is a little different. I think it would be an oil, you guys pay what, at 12 royalty? It's, the Shell Revolution pushed it to 25. It's tough to get under a quarter. We're

51:35 at six. Ah, yeah. And there you go, so, but the you need to,

51:43 you need to spin it to the mineral holder. So it's way more lucrative, you know, or something. We just call it bonus money, right? There you go. That's awesome. Why aren't you cool to come on?

51:54 This was awesome. I knew none of this. The, now when I

52:01 talk on BDE about nuclear, I only sound, you know, three quarters stupid, as opposed to 100 stupid.

52:09 Well, I can put you in touch with the people that really know. So if you give you a better ammo next time, yeah. Yeah, yeah, I'll figure out some way to mess that up and forget it. Anyway,

52:18 you're cool to come on. Oh, I appreciate that.