| Account | Shares | Price | Value | % of acct | Cost/sh | Gain $ | Gain % | Target |
|---|---|---|---|---|---|---|---|---|
| 401K | 3,742 | $0.19 | $726 | 0.03% | $2.44 | $-8,421 | -92.1% | — |
In short: Named with Peninsula and Boss as a restart that "ha[s] really not delivered" against promised 2024–26 production.
20:32have just not delivered. There are a few examples of that. I don't want to rain on anybody's parade here, and I'm not here to be the bad guy or whatever, but Peninsula, Lotus, even Boss recently with the Honeymoon feasibility study at the end of the year — they have really not delivered the way that they perhaps had hoped to, and perhaps fuel buyers had hoped to.
In short: Asked "how far can you fall from the basement window?": "Lotus, with their balance sheet and with their moderate as opposed to horrible grade, can fall to zero. It's important that you know that… that's a company that's going to need to be refinanced." Currently unranked; "if I was going to bring them back, I'd bring them back at a seven. I don't like bad balance sheets."
Asked how much further a troubled uranium company can fall, Rick doesn't soften it: "Lotus, with their balance sheet and with their moderate as opposed to horrible grade, can fall to zero. It's important that you know that."
The mechanism is dilution, not bankruptcy drama: the company "is going to need to be refinanced," and a company with a weak balance sheet raises money on whatever terms it can get — usually by issuing shares so cheaply that existing owners' stakes shrink toward nothing even if the mine eventually works.
It is currently unranked; if he restored it, "I'd bring them back at a seven. I don't like bad balance sheets." Note this is a company-specific verdict inside a sector he is otherwise very bullish on.
45:50Lotus with their balance sheet and with their moderate as opposed to horrible grade can fall to zero. It's important that you know that. We had an interview with Lotus here at the Rule Classroom a couple years ago that I think was very instructive and very useful. And I think that the management team perhaps with some prodding was unusually candid. But that's a company that's going to need to be refinanced.
In short: "We don't want to mince words here… Lotus is a 'blow-up'." Shares halted since June 18 (last trade A$0.66) pending a Kayelekera update that disclosed delayed acid deliveries, an acid plant damaged during hot commissioning, production paused, a treasury down to US$26M and 2026 offtake commitments of 1M lbs "impacted" — i.e. a real chance of default absent delayed-delivery agreements. Any financing will carry "downright punitive" terms at a large discount. Position is now marked "no new money" and has decayed to 1.24% of the Focus List: "we are just grateful that we were underweighted in this position."
This is the failure, and Huhn doesn't dress it up: "Lotus is a 'blow-up'." Lotus was restarting the Kayelekera mine in Malawi — usually the lowest-risk way to add uranium supply, because the plant already exists. It has gone wrong on the most basic input imaginable: sulfuric acid, the chemical that dissolves uranium out of the ore. Deliveries were delayed and the new on-site acid plant was damaged during commissioning, so production has been paused.
The consequences stack up. The shares have been suspended since June 18 at A$0.66 pending a funding outcome. The treasury is down to US$26M. And roughly 1 million pounds of 2026 deliveries already sold to utilities are "impacted" — meaning Lotus may default on contracts unless customers agree to take delivery later. Raising money in that position means accepting whatever terms are offered: Huhn expects a deeply discounted, heavily dilutive offering "assuming they are successful in garnering interest."
The instructive part is the damage control. Because Lotus was sized at 5% and has decayed to 1.24% of the portfolio, even a further halving of the share price costs the Focus List only about half a percentage point of annual return. That is position sizing doing exactly what it exists to do: "we are just grateful that we were underweighted in this position… as compared to our profitable overweighted positions like NexGen, Denison, and SPUT."
Full passage: premium transcript (PDF).
In short: Named among the "shitco junior" uranium names that burned holders — "just ask the shareholders of Lotus and many others." Used to make the point: own the uranium theme through quality, not speculative juniors.
47:09Yes, we're seeing investments in enrichment and in conversion which have been bottlenecks, but ultimately that's just going to call for more regular yellowcake. So where is that coming from? So I still think that that's a very good area to look at. The problem is how do you express that with a position instead of some shitco junior that — in Africa somewhere? Yeah, just ask the shareholders of Lotus and many others, Peninsula, and I don't even remember them all at this point, but anyways. Well, even in Australia, Boss, if
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