Scott Melbye — Bullish on Uranium: "Quite a Rally" in Prices and Equities Into Year-End

0:14 Three hats, 43 years — and where the cycle is

• EVP of Uranium Energy Corp, CEO of Uranium Royalty Corp, President of the Uranium Producers of America — "I come at this from someone who's been in the uranium industry now 43 years."
• The demand stack: the green-energy transition made nuclear bipartisan, and now raw electricity demand from an "electrified high-tech society, data centers, everything else" is layered on top.
• The arithmetic he keeps returning to: without data centers, nuclear generating capacity doubles in 20 years; with hyperscalers it triples; Trump wants a quadrupling — "that means we need to double, triple, or quadruple uranium conversion and enrichment."

2:20 Spot stuck at $85 — read the floor, not the ceiling

• Two to three months in a narrow range around $85/lb. "That's not a level that incentivizes a lot of new production, but it has incentivized the lower cost production like UEC's mines."
• His inversion of the bear question: "the other way to look at it is it hasn't moved lower. No one's talking about $60 or $70 a pound anymore."
• The floor is a buyer, not a hope: "anytime it should fall below 85 towards 84 83. Utilities are stepping in and buying."

3:17 The deficit shows up in the term market first

• 50 Mlb/yr structural deficit; ~2 bn lb over 20 years. "It's going to manifest in the long-term market first."
• The mechanism: utilities coming out to contract "are not getting an abundance of offers or the quality of the offers isn't what they expect," because producers are filling up uncommitted capacity.
• The squeeze: a utility that won't accept those terms has to go to spot — "and the spot market can't handle that volume. So we're very soon in a position where the spot and long-term price spiral up on each other."

4:06 The forecast: $100+ spot by year-end; term already there

• "I would be very surprised if we didn't close the year up above $100 a pound in the spot market."
• Term is already at $95–100 "in base price escalated contracts in the market already."
• The calendar catalyst: out of the quiet summer and into the World Nuclear Association meetings in London in September.

4:28 Market power is shifting — and UEC stayed unhedged to catch it

• "We've been in such an oversupply situation for so long that the utilities basically could demand and get pretty much anything they wanted. As supply tightens, the power is kind of shifting to the producers."
• UEC is "very famously unhedged and indexed to spot pricing… we work for the investor not the utility" — it refused the ceiling prices competitors offered.
• The regime-shift tell: utilities are now asking, "remember those no ceiling 100% spot contract you were discussing a year ago. Is that still on the table?"

7:06 Ten million pounds bought at $20–50 — cash parked in the commodity

• Both companies bought close to 10 Mlb "off the bottom of the market at 20, 30, 40, 50 dollars a pound" — "rather than just having cash parked in CDs, it's cash parked in a commodity which meets the mandate of both companies."
• UROY liquidated 2.4 Mlb of it to fund the Sweetwater Royalties acquisition — the inventory became acquisition currency.
• UEC's remaining ~1.5 Mlb stockpile gives it flexibility to deliver into sales from inventory rather than production.

7:37 Origin arbitrage — save the US pounds for the buyer who pays up for them

• "We may want to preserve our US origin production for potential strategic uranium reserve purchases by the US government."
• The trade: sell inventory pounds "to a utility or a financial player or another producer that isn't as finicky about the origin" and keep the domestic pounds, which "potentially could sell for premium to the US government going forward."

8:30 The incentive-price ladder: $85 funds the first quartile, $100+ funds the rest

• A new greenfield mine — "particularly conventional mines or large conventional mills" — carries a capital lift of "a billion or two billion dollars."
• "To date it's only incentivized the lowest first or second quartile cost producers. Probably need 100-plus dollars a pound to incentivize the rest."
• Goldman Sachs pegs the structural deficit at 2.1 bn lb over 20 years — "that's a lot of new mines needed in Africa, Australia, US, Canada, and we're only beginning to see that momentum."

9:41 Burke Hollow's 34,000 lb quarter — a regulator bottleneck, not a mine problem

• "A lot of new mine production and restart of mines in recent years have been choppy. And so a lot of people are watching our ramp up to see how it's going."
• The cause he declared two quarters early: Wyoming DEQ and its Texas equivalent are "literally being overwhelmed by so much uranium activity in the state" that routine sign-offs on new well fields and header houses slipped — "we lost two and a half months out of a 3-month quarter."
• His load-bearing claim: "that's not a technical issue or one that's ongoing. Those well fields have now been approved and are in full production." Irigaray/Christensen Ranch is still at "under $40 all-in cost" to date.

11:22 How in-situ recovery actually works

• "Uranium mining by in situ methods is very much like oil and gas production where you're drilling into sandstone hosted ore bodies and you're injecting sodium bicarbonate and you're pumping uranium to the surface as a solution."
• The consequence for capital: an ISR operation is never "built" once — "you're always continually drilling, completing header houses in well fields to stay ahead of your depletion curve," which is why permitting throughput, not ore, is the binding constraint.

12:12 Wyoming build-out — three well fields approved, plus the Ludeman satellite

• Christensen Ranch: three additional well fields approved, two more in application, "even a couple more under development" — "a beehive of activity."
• Ludeman, a new Powder River Basin satellite feeding Irigaray, is an extension of Cameco's Smith Ranch deposit; targeted into production late next year.
• Irigaray then draws from both Christensen and Ludeman, on top of the Burke Hollow ramp in Texas.

13:01 The production target: 5 Mlb in 5 years, licensed to 12

• Interim step is the 1–2 Mlb range — Irigaray/Christensen Ranch ran at a million-pound rate "under the Uranium One days."
• No near-term guidance "because of the uncertainty of regulatory and anything else," but "we're spending, hiring, and planning to be at roughly 5 million pounds of production within 5 years. We have license capacity to go to 12."
• Upside is policy- and price-contingent: stronger US policy and market conditions would mean more workforce and drilling above that rate.

13:47 Sweetwater's mill in FAST-41, and Roughrider to the early 2030s

• The Sweetwater plant bought from Rio Tinto sits in the Great Divide Basin — a conventional mill licensed to 4 Mlb/yr, now accepted into FAST-41, the critical-minerals permitting fast-track created by executive order.
• The licence amendment lets the mill take in-situ resins as well as conventional ore, "because we have such a great number of resources and projects in the Great Divide Basin which can be unlocked by this processing capacity."
• Roughrider in Saskatchewan advances toward full feasibility and production "in the early 2030s" — between the two countries, "we're really aiming to be a global top 10 uranium producer."

15:26 Nuclear is the rare bipartisan energy policy — and elections stopped being binary

• "In a world where between Republicans and Democrats there's disagreement over maybe renewables or fossil fuels, they all agree on nuclear power." The Nuclear Fuel Security Act and the Russian uranium ban were signed under Biden; "Trump has taken it and put on steroids."
• "In my career, elections were always a binary event. The left opposed nuclear and the right supported… We really don't have that anxiety anymore" — a Democratic return wouldn't reverse it, because they value the carbon-free baseload that lets wind and solar be intermittent.

16:13 DOE's $17.5 bn — the large-reactor order book nobody was modelling

• "Just last week, the Department of Energy directed 17.5 billion in loans to utilities to purchase long-lead time items for large reactors. Let's call it the AP1000s from Westinghouse."
• Seven US utilities applied, across five separate sites with twin reactors.
• Why it matters for pounds: the market frames growth as small modular reactors, but "states like Florida, Virginia, New York… don't need 100 MW, they need 1,000 MW."

17:23 A US industry at 25–30 Mlb by the early 2030s — the substitution trade

• The Uranium Producers of America now has a record 20 members, six already in production and the rest in development.
• "We see visibility to an industry that can produce 25 30 million pounds by the early 2030s. That would be coincidentally what we're currently getting from Russia, Kazakhstan, Uzbekistan."
• The policy logic: substitute away from "Russia, China, and their allies" while continuing to rely on Canada and Australia.

18:57 Uranium Royalty's $1.1 bn land grab

• The Sweetwater Royalties acquisition, closing this month, is the 1860 Union Pacific land grant — ~800,000 acres of surface rights plus the mineral rights, making UROY "the second largest public company land owner in the United States, largest in Wyoming."
• The rights span "oil and gas, uranium, critical minerals to of course trona and soda ash," carrying ~$74m of annual EBITDA and $30–50m of free cash flow.
• He pre-empts the obvious objection: "We're not pivoting away from nuclear uranium" — the cash flow funds "a lot of pipeline projects for new uranium royalty and streams."

20:53 Why the equities lag: "AI schizophrenia"

• The most common question at the Rule Symposium: everyone agrees the fundamentals have never looked better, so "why have the uranium equities lagged this year?"
• His answer is correlation, not fundamentals: "unfortunately or fortunately, uranium trades with the AI basket" — one week data centres need nuclear, the next week they won't be built.
• Add "Gulf War anxiety" and "concerns about Fed policy and inflation" and you get equities pinned regardless of the pound.

22:35 "Your favorite uranium companies are on sale this week"

• The deficit doesn't depend on the AI story: "even if another data center never comes online… we're still doubling nuclear power. And that 2 billion pound deficit is based on a doubling, not a tripling."
• And the hyperscalers won't quit: "they're not going to give up on AI just cuz it's too hard. They can't get the energy. They're going to build the energy" — favouring natural gas, nuclear and even coal.
• The call: "a great opportunity to add to uranium positions… I think into the end of the year you're going to have quite a rally in uranium prices and uranium equities."