Title: UEC's Scott Melbye on What's Holding Uranium Back Show: Jimmy Connor (YouTube channel) - interviewer Jimmy Connor; recorded in London at the World Nuclear Association symposium Guest: Scott Melbye - CEO, Uranium Royalty Corp; Executive Vice President, Uranium Energy Corp; President, Uranium Producers of America Date: 2026-09-13 (YouTube publish date) URL: https://youtu.be/RtULz8klqlo Length: 18:37 Note: YouTube auto-transcript. Fillers (um/uh/you know as interjection) and stutters removed; obvious name mis-transcriptions corrected (NextGen -> NexGen, breath -> breadth); wording otherwise verbatim. ">>" marks a speaker change.
00:09 Scott, thank you very much for joining us today. You wear many different hats. You're the CEO of Uranium Royalty. You're also the Executive VP of Uranium Energy. Did I miss anything? >> No, that's right. And president of the Uranium Producers of America, our trade organization. >> There you go.
00:26 So, you're the perfect person to talk to about all things uranium. And one of the things I want to pick your brain about is what's happening in the term market. >> Yeah. >> And because one of your jobs, UEC, is dealing with fuel buyers. So, when we look at 2026, how would you characterize this year when it comes to uranium, both in the term market and also the spot market? >> Yeah.
00:47 Well, everybody is aware of the replacement rate of contracting. Are utilities contracting in the long-term market equal to the amount that they're consuming in any given year? And we all know the answer is that it's been in many cases 50 or 40% of what they should be contracting, which means their uncommitted requirements are getting bigger and they're looming ever closer.
01:14 We have begun to see a little bit of that behavior change in that US utilities have begun to be much more active in the say on-market public requests for quotations and off-market activities. What's the major takeaway from that though is what they're seeing when they get offers in as a response to the request for proposals is a bit alarming to them.
01:40 Because we know we have a very significant supply deficit, maybe 50 million pounds in the near-term going to maybe as much as 2 billion over the next 20 years. That has to manifest somewhere. And might think that it would manifest first in the spot market, but we're actually seeing it show up in the long term market.
01:59 Utilities aren't getting the breadth and quality of offers that they would like to see, which means incumbent producers are filling up their order books, and new producers aren't coming on at a volume yet, which is presenting sufficient amounts of supply to the long term market. That's a very bullish indicator, but it is finally that utility behavior may be changing.
02:24 >> And I'm glad you brought up the contracting cycle because I got to look at my phone to get the numbers here because the numbers are staggering. In 2000 This is according to EIA. In 2027, 2.4 million pounds. 2029, 8.2 million pounds. 2030, 12 million pounds. >> Yeah. >> Like the numbers are staggering.
02:44 So, what are these utilities going to do? Where are they going to get the additional pounds? Well, >> and this isn't the old market that maybe they're accustomed to in an oversupplied market where prices were depressed due to lots of secondary supplies and available production, they could afford to be complacent.
03:03 Now they need to turn to be more strategic because it's not just them buying. You have large state-owned players in places like China and India. India alone announced last week that they can envision adding another 100 gigawatts of nuclear capacity in the coming years. That amount of nuclear growth would consume all the production out of NexGen, Denison, and Paladin's mines in Saskatchewan.
03:30 So, you're competing against state-owned enterprises. You're now going to be shortly competing against hyperscalers that are buying uranium for energy infrastructure, supporting data centers, and you're also going to have competition from governments like the United States to replenish strategic stockpiles for defense needs. >> So, the US government has been very positive toward nuclear energy and also uranium mining and not only uranium but other sectors, other resources.
03:58 We saw them make an equity investment in Trilogy Metals, which is copper in Alaska. They made a large equity investment in Lithium Americas, which is lithium in Nevada. Do you anticipate they might make an investment in a uranium company? >> Yeah, listen, I was very fortunate to be in the meeting with President Trump 2 and 1/2 3 weeks ago where really exemplified the focus that this administration has on critical minerals, rare earth minerals, regaining our mining leadership and also the energy dominance goals. Uranium touches both of
04:32 those and so the executive orders that you saw come out in spring of last year were not only to streamline reactor growth and permitting and licensing of nuclear reactors, but also to revitalize the fuel cycle. So, the Defense Production Act, the Russian uranium ban which passed in the Congress in the last administration.
04:57 Building on these policies really indicates that the US is interested in UEC's case, we're building a downstream refining and conversion facility in the United States to really advance our sort of leadership at the American front end of the American fuel cycle and I don't want to get ahead of what will happen there, but we're getting a very warm reaction from Department of War, Commerce, Energy, White House Energy Dominance Council about an American company that's building processing infrastructure in the United States. We've got to regain
05:33 that leadership if we're going to triple or in President Trump's plans quadruple nuclear energy by 2050, we need to quadruple our fuel cycle. So, yes, I would expect the US government either through direct purchases of uranium for strategic, commercial, or defense needs, or direct investments. >> So, along that vein, we saw some positive news out of the DOE regarding an RFI.
06:01 And can you speak to that and what it means for the industry? >> Well, Jimmy, it's very timely that you raised that. It really just came to light yesterday, and it's not something that surprises the Uranium Producers of America cuz we've been engaged with Department of War and the NNSA at the Department of Energy, the folks that manage the uranium stockpiles for defense needs.
06:22 They've indicated that the stockpiles that were built up in the '60s, '70s, and '80s for our aircraft carriers, our submarines, our nuclear deterrent programs are now coming to an end towards the end of the next decade. But they've indicated they need to start buying uranium at a rate of 3 to 4 million lb starting in 2030. Yesterday, they came out with the first step in the procurement process, which in government terms is an RFI, a request for information to identify the companies that they will send formal requests for proposals to
06:56 start buying uranium at that 4 million lb a year rate. To put that into context, that would be like a five reactor a new entrance into the commercial nuclear fuel program with a five reactor program suddenly saying we're going to buy all our uranium in starting in three and a half years. So, what's even better for the US producer like ourselves is that has to be US origin unobligated as to safeguards against use in defense purposes.
07:28 So, that will put a floor under US origin uranium prices and provide a very strong incentive for domestic miners like UEC to continue their ramp up and produce more out of the United States. >> So, I'm sorry. What's the total amount of how many pounds? >> That would be 4 million pounds a year starting in 2030 and extending in throughout the next that decade.
07:54 >> And do you think UEC or some other producer will be ready by 2030 to produce that? >> We [clears throat] will. I mean, we have to remember that the first Trump administration saw a strategic stockpile initiated as a result of the Section 232 investigation where the administration bought 1.1 million pounds of US origin uranium from five producers.
08:17 UEC was one of the recipients of those awards and received a premium of somewhere in the range of 20 to 30%. Currently the uranium industry probably in the current year may produce somewhere around 3 to 4 million pounds in the current year. But by 2030, we have a number of producers that are in a ramp-up phase right now at six or sevens companies and multiple sites in the Western United States.
08:41 So, I do think the US industry is going to be ready to respond to this demand, but it does every pound that's purchased for these defense needs is one less pound that can go to the commercial side of nuclear energy. >> So, why don't we talk about UEC? You have two producing mines right now, one in Wyoming and one in Texas.
08:59 They're both in situ or ISR. >> Yes. >> Tell us about these assets and how they're producing right now. >> Yeah, so we had the foresight at the bottom of the bear market following Fukushima to make over a billion dollars worth of acquisitions. We had the luxury of time to permit, license, get them ready for this day.
09:19 We're in that mode and we've really transitioned in the last 15 months from a development company to full operations. So, at Christensen Ranch, Irigaray, we are in full production from multiple well fields, header houses, Today produced about 265,000 pounds. We're going to report our quarterly results shortly that will add another a more full some full quarters worth of production to that number.
09:48 But we're also bringing up the Burke Hollow mine in Texas which really only began operation last quarter. But we want to be ramping up at those two sites in addition to building a new satellite mine at Ludeman in the Powder River Basin Wyoming and the Sweetwater operations in the Great Divide Basin of Wyoming.
10:09 That's a fast 41 project in the Trump administration where they've agreed to fast track permitting and licensing of that 4 million pound a year operation in Wyoming. So our total licensed capacity is 12 million pounds a year. Obviously, we're not going to fully utilize that in the immediate term. But knowing that we have that capacity and we have 300 million pounds of resources within 50 to 100 miles of those processing plants should give the investor confidence that not only can we produce today, but we can ramp up and produce for many years into
10:40 the future. >> And so with your current production, what are you hoping to how many pounds are you hoping to produce this year and why aren't you producing something closer to the 12 million pounds that you're licensed for? >> Yeah, so we haven't given guidance because we're still very much in the initial restart of those operations.
10:57 The Christensen Ranch Irigaray operations previously produced over a million pounds a year. So obviously, that's an interim step. But I think ISR has one of the advantages of in seeing strong demand whether it's defense or commercial needs. We have the ability to produce more than those levels.
11:18 It just means more people, more drill rigs, more well fields being put into place. So we're still in that ramp up phase, but I think over the course of 2027 calendar year 2027, you're to see the mine kind of turn to a more steady-state production level. >> And Scott, because you're the CEO of Uranium Royalty, why don't you just give us a quick overview of that company? >> So, that's an interesting company that is a royalty and streaming company in the uranium space.
11:47 And it was patterned and launched in 2017 to become the Franco-Nevada, Wheaton Precious Metals, Sandstorm Royal Gold company in the uranium space. Quite simply, it's a capital provider to new mines in development that are around the world, not just in North America, that are going to help fill this gap of production deficit.
12:07 We concluded a deal just in the last month for $1.1 billion to acquire Sweetwater Royalties, which in one transaction made us the second largest landowner in the United States in public company space, largest in Wyoming. It's the former Union Pacific land grant that dates back to the 1862 Railroad Act of Abraham Lincoln.
12:29 But as we hold that land today, 5.3 million acres, we own the surface rights and all the mineral rights from Cheyenne all the way to Salt Lake City. We have five of the world's lowest cost and largest soda ash mines. Trona soda ash is a key ingredient in glass, container glass, flat glass, but more importantly, it's a near-term robust generator of cash flow.
12:56 EBITDA has been from those mines around 75 million with the likely potential to increase that two and a half times in the coming years. So, why did we go into soda ash for a uranium company? To provide more near-term cash flow to plow back into uranium investments. We really think that that will give us the financial strength to expand our uranium aspirations.
13:19 >> Scott, you are one of the most bullish people I know for uranium. And as everyone here at the conference, everybody I speak to, they're super bullish. >> Yeah. >> But, if I want to play devil's advocate here and take the other side of that argument, if there was one concern you had about the sector, what would it be? I mean, let's just say because one thing we always wonder is where are these extra pounds coming from? Maybe it's somebody like BHP at Olympic Dam.
13:45 >> Yeah. >> They produce 8 million pounds a year, but maybe it's 10 or 12 million pounds. Like, who knows? >> Well, those it used to worry me in an oversupplied market where demand was flat or declining. Every new mine really represented an increase to the oversupply situation. Now, even the big mines that are being slated for the Athabasca Basin, Saskatchewan, the market needs those pounds.
14:10 In fact, we need more mines like that. So, I don't worry about overproducing. I do worry about getting enough people, drill rigs, to ramp up production to meet that demand, but that's also very bullish for the supply and demand narrative. I think we've heard, whether we like it or not, uranium stocks trade in the AI basket, in energy infrastructure basket.
14:35 They say, "Well, what if the AI buildout doesn't happen as many expect it to?" Well, even if there was not another data center, not another hyperscaler investing in nuclear, we're on track from the 440 reactors and the 80 under construction to double nuclear generation in the next 20 years. That's generating the 1.
14:58 6 billion pound deficit. Even the data center schizophrenia that we've seen in the equities markets over the course of this year doesn't worry me because we're if that does happen, and I do believe it will happen, and we are beginning to see the small modular and micro reactors being ordered by the Defense Department, Navy, Army, Air Force, investments like Google in a nuclear power plant in Finland this week.
15:26 Other investments in the United States to restart idle reactors. It is happening. And so, I don't think we have to fear that AI is somehow wet blanket if it doesn't materialize in the same degree as many expect. >> And we always hear about these nuclear reactors that have been constructed around the world, especially in China.
15:45 >> Yeah. >> And 80 reactors, that's a lot and they're going to consume a lot of uranium. So, having said that, why isn't uranium at 150 or 200 bucks a pound? >> It's a good question. Many have said, "Why is uranium seem to be the spot market seems to have been stuck in a trading range of 85 to $90 a pound?" One, that's not a bad level.
16:07 But it was stuck at that range. I will take the bullish side of that argument say, "We just completed the summer months, which typically are very weak for uranium pricing. Demand drops off in the summer. Supply overhangs the market. We usually see a dip in spot prices." We didn't see that this year and we're going into WNA in the end of the year without that sort of weakness.
16:32 I think it speaks very bullishly to where we end the year, whether it's very easily can be over $100 a pound. That's actually not that far from where we are today at 90. But it is a coiled spring. You mentioned the uncovered demand, that's real, that has to be bought. Uranium demand is inelastic.
16:52 You can't substitute something else in a nuclear reactor. And the lead time for new mines is very, very long. If uranium prices went to $200 tomorrow, there's not a plethora of mines that can come on and dampen that kind of price signal. So, again, I've never been this bullish about uranium thesis at this point in time, but it's really been based on 40 years of experiencing all the previous cycles and just seeing the combination of supply and demand, geopolitics, and megatrends.
17:25 >> And we only have 3 months left in the year. Do you anticipate a big ramp up in terms of contracting? >> Yeah, I think certainly will continue. I think the DOE coming out with that RFI is just another signal for utilities that they're not alone in this market. They're competing in a bigger pool.
17:48 And so I think the analogy is a bit like musical chairs, where the empty chairs are uncommitted mine production. But every month more and more of that mine production is being committed. And I think utilities are beginning to see that and don't want to be left without a seat when the music stops.
18:08 >> Scott, one more question before we wrap it up. But we are in London, one of the great cities in the world. What do you love most about coming to London? >> I love a pint of bitter in a traditional pub. I must admit I am a fan I'm a bit of an Anglophile, and I love the pub culture. How's that? >> It's great.
18:25 Well, once again, >> All right. Thank you, Jimmy. Yep. >> [music]