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Vimy plans to follow up on a recently Mike Young
identified massively wide shear zone
at the Alligator River project, NT

their carts more aggres- no doubt about it. I don’t think there will
sively in the near future, be a massive run that is going to cause
Young said it was unlike- a whole flutter of share buying like we
ly that companies would saw in 2011, but it will be sustainable and
experience share price long-term and it will get guys investing in
surges this time around. production,” Young said.
“Utilities are going to Frustrations with spot price drivers
basically walk up the aside, Young is preparing for an important
cost curve, the early re- 2020 for Vimy.
quests for proposals will Young said the emphasis would be on
get filled by the cheapest writing contracts later this year or in early
producers and once that 2020, which will then lead to project fund-
fills up then it starts com- ing and ultimately project development.
ing up the cost curve and Vimy has completed a DFS on the Mulga
uranium will get more ex- Rock project in Western Australia, which is Uranium prices are low and flat,
pensive and more expen- awaiting secondary permits, licences and but there is optimism brewing
sive,” Young said. approvals and could potentially be mine-
“There will be anoma- ready next year. within the sector. Late last month,
lies in there, there will be Meanwhile, the company is contemplat- the House of Representatives
people who will take a ing another round of drilling at Alligator Standing Committee on
cut and take a loss later. River, Northern Territory, either before the Industry, Innovation, Science
There will be market- wet season starts this month or next year. and Resources held a public
based contracts hoping “Our strategy is to basically keep the roundtable into the nuclear
the spot price goes up. utilities fully informed to what we are doing
There is a real danger and when we expect to be in production. industry in Australia. Committee
in that because the spot We need to wait for them to meet our con- chair Barnaby Joyce said he
price in uranium has always spiked, but tract price and they will, you just look at the would like to get an overview of
never sustainably stayed high. The rea- cost curve and if they don’t the whole world the whole nuclear industry.
son for that is this is a contract market is going to run out of uranium,” Young said. “The Committee is receiving
and 90% of the utilities are buying on “Everyone is waiting for the market to
contract and the spot market is a shad- move, there are some really good targets briefings on a broad range of
owy, manipulated arbitrage market.” up there [Alligator River] and the drilling issues and due to the high level of
Generally, uranium spot prices are we did recently found this massively wide public interest in nuclear power
lower than contract prices, with spot trad- shear zone that we need to follow up so we decided to make this briefing
ers running point in the hope of buying are looking at that. The main thing will be open to the public,” Joyce said.
product low and selling it into contracts working on contracts and releasing news “We want to hear from a broad
at a higher price. flow on the macro side of things from the
Buying in the spot market has dried industry as well, like getting stuff out on the range of voices about nuclear
up and Young isn’t backing any dramatic Nuclear Fuel Report. power and see what part it has to
boom in uranium spot prices. “Uranium is a long industry and an in- play in Australia’s energy future.
“Previously, we had a couple of ramps dustry that takes its time, but it is a bit like There is a broadening view that
where the spot price shot up and then a snowball that rolls down a mountain; it zero emissions base-load power
you saw a lot of contracting happen. This gathers pace and gathers size and that’s
time I think what is going to happen is a going to happen, you don’t get a sugar hit can be delivered by nuclear
slow march and the spot price is going in the uranium industry,” he said. energy.”
to follow the contract price up. There is – Mark Andrews
always a [difference] between spot and
contract prices and that is how traders
make their money,” Young said.
“As you start to see contracts being is-
sued contract prices will climb the cost
curve and the spot price will go with it.
There might be slight fluctuations and lit-
tle mini runs, but I personally don’t think
there will be.”
Young said it was a double-edged
sword that the contract market was im-
proving albeit at a slow pace.
“The spot price, even though it is an
arbitrage market, is manipulated; there is

aUSTRaLIa’S PaYDIRT OCTOBeR 2019 Page 11