July 6th: Golden Rock Weekly Roundup
Market Update, OpenAI/Oracle Deal, Pinyon Plain, Boss/Encore, and KATCO
Market Update
The spot market closed at $77.00/lb, -$1.75/lb for the week. This past Monday, monthly updated long-term base-escalated prices stayed at $80/lb as term inactivity continued in June.
Equity market participants continue to pay very close attention to Sprott Physical Uranium Trust (SPUT) activity. Last week, they procured 300K-lbs on Monday, June 30th and 100K-lbs on Thursday, July 3rd. The Trust now holds 67.77M-lbs of uranium and closed at a 4.86% discount to NAV to end the week and holds US$111M in cash. Our current view is that SPUT will likely not drop cash balances too far below US$50M (~1.00% of assets), leaving them US$61M to deploy or nearly 800K-lbs of purchasing power at current spot prices.
SPUT continues to shuffle up their buying patterns day to day as we fully anticipated since the US$200M capital raise. In 60-Day Review & Big SPUT Raise, we wrote:
We find the recent price action in spot very healthy as other market participants continue to trade all the while knowing how much capital SPUT retains. As a reminder, spot has risen ~22% since the lows of this year in April so we are not surprised to see risk capital liquidate into SPUT or other buyers in the past week or two.
Thinking beyond the day to day horizon, we continue to wonder if another bank or institutional capital is contemplating placing large amounts of capital with SPUT in some way again. While SPUT’s ATM is currently turned off at the request of Canaccord Genuity for 30 days since the US$200M raise (announced June 16th, deal closed June 20th), it will be capable to return in the coming weeks if the Trust is pushed to a premium to NAV.
As a side note, we certainly expect more term activity to pick up in the second-half of this year. Term volumes have been anemic going on 18 months now and we remain relatively baffled that utilities are not more active by now. Drawing down inventories is a short-term solution and has a price attached to it as we have seen over and over again in this market for the past five years.
Source: Ux Consulting, LLC & Cameco Corporation
Golden Rock Intraweek Commentary & Analysis
This past week, we released:
Deep Dive #9: Introduction to Uranium Miners
What else did we find interesting this week?
OpenAI is set to lease an additional 4.5-GWe’s from Oracle to fuel its upcoming Project Stargate with Oracle CEO Safra Catz revealing that the company has secured a large contract worth US$30B in annual revenue.
While this news does not directly impact the uranium market today, it simply adds to the growing acceptance that AI is a secular trend moving forward and hyperscalers are going to need more power and a lot of it.
In META Signs 20-Year Agreement with CEG, we wrote:
The world is changing.
Energy Fuels' Pinyon Plain Uranium Mine Continues to Outperform
On Tuesday, July 1st, Energy Fuels announced another update to its Pinyon Plain mine, stating: “During June 2025, the Company mined 230,661 pounds of U3O8 from the Pinyon Plain mine, resulting in 638,700 total pounds of U3O8 mined in Q2-2025. These elevated mining rates are mainly driven by the high uranium grades at Pinyon Plain which averaged 3.51% U3O8 during the month of June 2025 and 2.23% U3O8 during the second quarter.
Mark S. Chalmers, President and CEO of Energy Fuels stated: "Pinyon Plain is proving to be a truly exceptional U.S. uranium mine. In my nearly 50-year history in the uranium industry, I have not seen any other U.S. mine like Pinyon Plain. Production and drill results to date indicate that it will be the highest-grade uranium deposit to be mined in the U.S. over the past 30 years, and I believe it is likely to be one of the highest-grade uranium deposits mined in U.S. history. We also believe that increased uranium production is very likely to result in lower unit production costs, which would positively impact our bottom line. In addition, there remains significant additional exploration potential, as the Company is only currently mining approximately 25% of the vertical extent of the prospective ore zone, and recent exceptional drill results in the Juniper zone highlight the potential for additional discovery."
The Company further notes that during Q2-2025, Energy Fuels sold 50,000 pounds of U3O8 on the spot market for an average price of $77.00 per pound.”
Pinyon Plain has outperformed our expectations as Golden Rock originally modeled the mine to produce only 400K-lbs in 2025. We have since bumped up the production forecast to 1M-lbs, however, with strong grades, we still might be undershooting its production for the year.
The company does have term contracts stating in the same press release: “In addition, due to exceptional production from the Company's uranium mines and White Mesa Mill (the only producing conventional uranium mill in the U.S.), the Company expects to complete increasing levels of uranium sales over the next few quarters, including 140,000 pounds of U3O8 in Q3 and 160,000 pounds of U3O8 in Q4 under its existing portfolio of long-term utility contracts. In 2026, the Company expects to sell between 620,000 and 880,000 pounds of U3O8 under its existing long-term contracts.” Yet, they do state they will continue to look for opportunistic sales in 2025 and 2026 which means they will look to sell into the spot market as well.
Boss Extends Existing Uranium Loan Agreement with enCore Energy
Boss Energy has advised that it has entered into an amendment to the existing Uranium Loan Agreement with enCore Energy, where Boss will extend the repayment date of the existing loan (US$10.4M currently outstanding) to December 27, 2025 and provide a new additional cash facility of US$3.6M.
Under the original Uranium Loan Agreement, Boss loaned enCore 200K-lbs of uranium that was to be repaid to Boss in kind or cash (at Boss’ election) based on the prevailing spot price at the time the loan was made (US$100.54/lb, equivalent to US$20.1 million). Since the original Uranium Loan Agreement was made, enCore has repaid US$11.9 million (including interest) in cash, with US$10.4 million currently outstanding.
The purpose of the Facility is to extend working capital support for enCore, with the additional US$3.6M to fund enCore’s capital contributions to the Alta Mesa joint venture. Capital contribution to the Alta Mesa joint venture must be in line with the Alta Mesa joint venture budget which requires unanimous approval from both enCore and Boss. The Facility is repayable by enCore on the earlier of 27 December 2025, or enCore completing an equity raise of at least US$23.5 million. Interest on drawn funds will increase from 9% per annum, under the original Uranium Loan Agreement, to 10% per annum and enCore will pay interest of 2% on undrawn funds (currently US$3.6 million).
The Facility has a parent company guarantee from enCore, and a first ranking security package over Alta Mesa. In addition, if an event of default occurs, Boss has the option to either call for immediate repayment in cash, or elect to convert the outstanding debt into a controlling 51% interest in the Alta Mesa joint venture and become the manager of the joint venture. An event of default can be triggered by nonpayment and other customary events such as a material disposition of assets by any member of the enCore Group, a change of control or a material adverse effect.
Source: Boss Energy Press Release, July 4, 2025
KATCO’s South Tortkuduk Uranium Mining Site Now Operational
On Thursday, July 3rd, Orano announced that its KATCO (JV with Kazatomprom) has inaugurated its new uranium processing plant. Production from the South Tortkuduk plot will gradually replace the currently exploited territories and will allow KATCO JV to extend its production for years to come. KATCO’s return to the full production level of 4,000tU (~10.4M-lbs) per year is expected in 2026. (Golden Rock models 9.8M-lbs in 2026).
Xavier Saint Martin Tillet, senior executive vice president of the Orano Mining Business Unit, declared: “This project showcases the successful partnership between Orano and Kazatomprom, with its development supported by the technical and environmental initiatives outlined in the cooperation memorandum signed between our two companies in November 2022.The successful completion of the South Tortkuduk project underlines KATCO JV’s positioning as one of the largest ISR uranium mining operations in the world producing 7% of the world’s uranium, indispensable for powering nuclear electricity production and fighting climate change. My congratulations to KATCO teams and Orano experts who contributed to delivering this modern uranium mine on-time and in safety.”
Source: Orano Press Release, July 3, 2025
Thank you Tim, appreciate the work you do.
One thing I’m still trying to wrap my head around: you mentioned on a podcast this week that we probably won’t hit replacement rate contracting this year or next (or in the years after?) because there just isn’t enough supply available to contract. If coverage starts to lapse around 2028 and beyond, do you see utilities opting to pay up to shake loose more inventory, rather than signing contracts to bring new supply online?
I get that the answer is probably “both” to some degree, and that more supply will eventually show up — but have utilities kind of backed themselves into a corner by waiting this long? What, if anything, would stop a melt-up in the spot or mid-term market if utilities are basically signaling (by not locking in long-term contracts) that they’re willing to buy at any price from an increasingly illiquid and shrinking pool? How does this make any sense for fuel buyers?