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he global COVID-19 tions when COVID-19
Tpandemic is shap- Candles lit for new restrictions are lifted.
ing as the catalyst for “I think both com-
new entrants to partici- panies would like to
pate in future uranium see a higher price and
supply after a decade yellowcake party Cameco certainly is on
dominated by the sec- record as saying that,”
tor’s leading producers. Young said.
Early signs are in- “Now they’ve got the
dicating just that with opportunity to not so
uranium surprising many as the best- “There’s certainly potential for these much use the COVID problem to their ad-
performing commodity this year, up 27% disruptions to run longer and harder than vantage, but I think given that they’ve ac-
since the start of January. Gold (up 16%) what we can anticipate at the moment, tually shut down production and wellhead
is the only other commodity still in positive so there’s every chance that 20 mlb can development they can basically bring it
territory. gape open ever further. That’s what’s got back on in their time to suit them.
Yellowcake prices have soared on the traders and others worried and that’s the “I think that this is the sustainable price
back of a string of major shutdowns, in- result that we’re seeing in the spot price.” rise that we’ve been looking for. It’s not
cluding the world’s largest uranium mine, Munro also believes Cameco’s “care- just anecdotal, there is real hard evidence
Cigar Lake, which Cameco Corp has fully chosen words” in announcing the there.”
now placed on “indeterminant” care- indefinite closure of Cigar Lake are telling. KazAtomProm’s decision to halt pro-
and-maintenance, despite initial plans to “Indeterminant we know can mean up duction for three months is set to impact
suspend production for just four weeks to two years because McArthur River, its capacity to undertake wellhead devel-
while the company evaluated the impact then the world’s largest uranium mine, opment which is critical for in-situ recov-
of COVID-19 and the risks associated was put on to indeterminant care-and- ery mines such as those in widespread
with continuing operations in a region of maintenance by Cameco about two years abundance throughout Kazakhstan.
northern Canada where there is a large ago – and there’s still no sign of that open- Young believes this is a crucial point
indigenous population. being overlooked by most market com-
Since then, the Husab and Ross- mentators.
ing mines in Namibia have scaled back “Wellhead development is the same as
production due to enforced lockdowns underground mine development,” Young
in the uranium-rich country and leading said. “It’s about driving your drives and
producer KazAtomProm flagged a major establishing stopes underground. It’s
supply disruption of at least 10 mlb after expensive, it’s deep, it’s not as risky as
announcing a three-month shutdown of underground development, but it is your
its operations. future production, so that’s an interesting
Kazakhstan last year accounted for point.
more than 42% of the world’s uranium “We don’t really have see-through on
production. what it will do to their future production,
And while no shutdowns have occurred but we know that there will be a future
in Australia as yet, Olympic Dam’s output production reduction because of the cur-
from the March quarter was down 18% on rent reduction in the wellhead develop-
the previous three-month period and 30% ment.”
on a year-on-year basis. John Borshoff At the time of print, the uranium spot
Concerns about future supply triggered price was nudging $US33/lb. For Deep
positive market reactions for a throng of ing up again,” he said. Yellow Ltd managing director John Bor-
ASX-listed uranium players, including “Cameco flagged in that announce- shoff, it is nowhere near the levels re-
Bannerman Resources Ltd, Vimy Re- ment that things had got worse rather quired to justify any restarts or new pro-
sources Ltd and Deep Yellow Ltd. than better and they seemed to be posi- duction coming online.
“What we’ve seen is a compounding tioning the market for a bit of a long haul, “When I hear people talking about the
news flow of production disruption and but reassuring people that in the longer uranium price going from $US24/lb to
my estimates are that the total aggregat- term this would all be good for uranium $US28/lb, I can’t describe how uninter-
ed production disruption can quite easily and therefore good for Cameco.” esting this is to me,” Borshoff told Paydirt
be 20 mlb out of a market that was only Vimy managing director Mike Young last month.
expected to produce 135 mlb,” Banner- is not expecting either Cameco or Kaz- “Like I say to many people, what’s the
man chief executive Brandon Munro told AtomProm to be in a rush to resume pro- difference between drowning 5m below
Paydirt. duction at any of their shuttered opera- the water or drowning 3m below the wa-

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