The Month in U Inventory: Further Inventory Additions in March

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Despite a last day of month rally, given the volatile month, markets ended considerably lower as gold, silver and copper futures declined on the month. That said, the spot uranium price ended the month -2.3% lower, settling at $84.05 per lb (Numerco). The spot price range was between $82.50-$86.75 per lb. The Sprott Physical Uranium Trust (U-U, U.UN) added 208,710 lbs of uranium to inventory during the month, thus bringing its total to just under 80.1M lbs. The current inventory figure represents a notable ~4.4x increase to the 18.3M lbs held nearly four years ago when the Trust was launched, post Uranium Participation Corp. acquisition. Meanwhile, Yellowcake PLC (YCA) took delivery of 1.33M lbs under its previously announced 2025 uranium purchase option ($75.08 per lb) with Kazatomprom. An incremental 100,000lbs was also purchased last month which brought the total current uranium inventory to 24.27M lbs.  

On the domestic production front, recent EIA data reveled that due to a strong Q4/2025 from Energy Fuels’ White Mesa Mill, FY/2025 US uranium production reached 2.16M lbs. This annual figure represents the highest yearly amount of domestic US production since 2017. Apart from Energy Fuels, material production contributions during the year were also from Willow Creek (UEC), Lost Creek (URG) and Alta Mesa (EU).

On the corporate front, in early March Cameco (CCJ) announced an agreement to supply India with a total of 22M lbs of uranium over a nine year period at market related terms (total contact value ~$1.9B). This follows the announcement in February that India also signed a large uranium supply deal with Kazatomprom (KAP). That said, as per Kazatomprom FY/2025 results announced two weeks ago, though production guidance is expected to increase y/y in FY/2026, sales volumes are expected to be lower. Moreover, a warning was issued that production levels will be contingent to securing the needed level of sulfuric acid. The expected mid-point AISC was increased from $29.75 per lb to $35.75 per lb.

Sprott Physical Uranium Trust (U.UN-T, U.U-T): 2-Yr Performance:

The Iran war related market downturn quickly reversed earlier P/NAV premium valuations to steep discounts with the Trust reaching an -8% discount just one week ago. Note that the Trust was at par to NAV at the start of March (pre-war) and even reached a premium of +9% in late January. Given yesterday’s strong market rally, the Trust rebounded to end the month at a slight discount to NAV.  

Over the month of March, the Trust’s uranium inventory increased from 79.889M lbs to 80.098M lbs (+208,710 lbs) as the total number of units outstanding accordingly increased from 336.742M to the current 337.348M. The inventory figure represents a notable 4.4x increase to the 18.3M lbs held ~four years ago when the Trust was launched, post Uranium Participation Corp. acquisition.

Valuation: Given current pricing and FX, SPUT's discount to NAV increased from last months discount of -2.0% to the current -0.6% discount with the Trust now trading at a 0.99x P/NAVPU relative to its intrinsic value of $27.69. Note that following a slight valuation premium in September 2023, the valuation discount has largely been maintained, apart from a brief period this past fall. The current -0.6% discount ranks well above the near -15.0% discount last seen in February 2023. Note that a premium of +9% was achieved before the commodities sell-off at the onset of the Iran war. Given our LT $100/lb price objective for the spot and a constant CAD/USD exchange rate, our 0.95x NAVPU valuation of $32.00 (rounded) per unit is being maintained. For further context, the current -0.6% discount to NAVPU is relative to +26% premium in September 2021 and -18.1% discount from July 2022. YTD shares in U.UN have declined by -0.1%. The corresponding sensitivities to FX and the spot price are below:

Yellow Cake PLC (YCA-L): 2-Yr Performance:

Valuation: Given the most recent spot U3O8 quote at $84.05 per lb (or £63.04 per lb), YCA is trading at 0.97x P/NAVPU, or at a -3.4% discount given the current 1.0x NAVPU intrinsic value of £617.97. Given our LT $100/lb price objective for the spot and a constant GBP/USD foreign exchange rate, our 0.80x NAVPU valuation of £710 (rounded) is maintained. As per YTD performance, shares of the Yellow Cake have declined by -1.4%. The corresponding sensitivities to FX and the spot price are below:

Recall that under the Kazatomprom Framework Agreement (KFA), Yellow Cake maintains the option to purchase up to $100M of U3O8 each year for a period of nine years, starting from the company's IPO in 2018. That said, it is our view that geo-politics will continue to weigh on Kazakh sourced uranium, and in general on all companies with exposure to Kazakhstan, (despite current transport routes which completely bypass Russia). As announced two weeks ago, Kazatomprom yet again reduced its FY/2026 production guidance going from the initially estimated 85M lbs U3O8 (100%) to approximately 77M lbs (100%) and now a mid-point of 73M lbs (100%). Though much of the decline reflects adjustments from the Budenovskoye production area, this latest guidance revision came amid the current environment in which construction and the procurement of the needed production materials (notably sufficient levels of sulfuric acid) remains challenging.