URANIUM Battle Royale - Sprott Physical Uranium Trust

The Uranium Machine has Awoken the Sector.

“There are decades where nothing happens; And there are weeks where decades happen.”
-Vladimir Lenin

The “other yellow metal” has been on a wild ride for the past 2 months.

And the price appreciation of uranium has carried a lot of uranium company share prices with it…

One of the Katusa picks was up as much as 1,500% at one point. And subscribers to Katusa’s Resource Opportunities were holding the stock.
Here’s why…

Uranium on the spot market finally crossed the $50/lb hurdle for the first time since 2012.

The Uranium ATM Machine has Awoken the Sector
Sprott Physical Uranium Trust (SPUT) has given the whole sector a giant wake-up call.

SPUT is a publicly-traded investment trust which is a buyer and holder of physical uranium.

You can think of it like the ‘GLD’ ETF in the US which provides investors exposure to physical gold without having to store gold itself.

The SPUT provides passive exposure to uranium.

It provides a way for generalist fund managers and investors to gain exposure to uranium price movements – all without having to buy a miner and take on extra risk.

Through a technique called an “At The Market” (ATM) facility, the company conducts unit issuances on demand.

So, if a family office or large buyer wants to buy 1 million units of the SPUT, these units can be created and sold to the investor.

The family office gets $1 million worth of SPUT units. And the cash goes to buy more uranium.

Transactions are done at or above NAV, so there is no dilution to current owners of the trust.

The ATM facility can be up to 1x the NAV of the trust.

With the current NAV of the trust around CAD$1 billion, it means that the trust can issue up to CAD$1 billion in new trust units.

Since the ATM program began in late August, the trust has taken in nearly CAD$900 million and purchased over 15 million pounds of uranium from the spot market during that time.

#uranium #katusa #sprott
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