The Niger Coup: A Tipping Point for Global Uranium Dynamics

Let’s get right into escalating events… [Katusa Research] In this email: - The Political Storm in Niger and France’s Delicate Nuclear Dance - The Unseen Trigger and why it matters. - The East's Nuclear Ambitions: China's Massive Play - Why Uranium Royalty Corp (UROY.NASDAQ and URC.TSX) is positioned to benefit; with pounds above ground and royalties on producing mines Dear Reader, Let’s get right into escalating events… In West Africa, a political storm in Niger is disrupting Europe’s energy matrix. This isn't just a regional concern, but a global one. It’s because Niger is a linchpin in the world's uranium market… A mineral that powers our cities, fuels our industries, and now, it's at the center of a geopolitical whirlwind. France: A Nation on Alert France, a nation that lights up its Eiffel Tower with nuclear power, is watching Niger closely because it relies on Niger for 20% of its uranium. Orano, the French nuclear giant operating in Niger, is on high alert. They've activated a crisis unit, not out of panic, but out of prudence. France's uranium supply isn't in immediate danger, as there's enough stock to last two years of current consumption without a single new shipment. Kazakhstan and Uzbekistan are the other two large producing nations France depends on their uranium supply alongside with Niger to make up 2/3rds of France's uranium supply needs. But in the world of nuclear power (and markets), it's wise to think ahead... The EU is Balancing on a Tightrope The European Union is also feeling the tremors from the Niger coup. The EU sources a fifth of its uranium from this single African nation. The coup in Niger isn't just a news headline; it's a wake-up call for the EU at a time the EU is cutting ties with the current Russian administration, which by the way is also another uranium giant. But with Niger in turmoil and openly against France's long-term grip over the nation, this balancing act just got trickier. The EU must now navigate these choppy waters, with Kazakhstan, Uzbekistan, and Canada as its other main uranium lifelines. Nuclear Energy produces 70% of France's electricity generation. France is also investing heavily in the construction of new nuclear reactors. The reactors, named Olkiluoto 3, Flamanville 3, and Hinkley Point C, have faced delays and cost overruns, ballooning from $26.5 billion to $55.9 billion. Why this massive investment? - France anticipates a surge in global demand for nuclear energy and has a goal of becoming a global provider of safe and replicable nuclear reactors to all nations globally. The current French nuclear buildout is a prototype for future French-style reactors, with the goal of reducing costs and construction timelines by up to 50%. France's nuclear ambitions extend beyond its borders. With experience in uranium mining, reactor design, and construction, France has a major intention to go global providing a turnkey solution for financing, design, construction, and operation of nuclear reactors. In France, President Macron's announcement of the construction of six EPR2s (reactors), with the first operational by 2035, and studies for a further eight EPR2s, has reinvigorated the nuclear program. The plan also includes extending the lifespan of existing reactors and investing 1 billion euros by 2030 in the development of advanced reactors. Leaked communications reveal India's interest in French reactors. France isn’t alone in this global ambition. Other countries like China, Russia, the US, and South Korea are eager to enter the global turnkey solution for nuclear reactors. However, China's involvement has raised concerns. In 2016, China General Nuclear Power (CGNP) acquired a 1/3rd stake in Hinkley Point C (the French company EDF owns the other 2/3rds) and began building two European Pressurized Reactors (EPRs) in China. This move, along with China's development of its native reactors, has led to accusations of technology theft. Are you surprised? France's pursuit of nuclear innovation is not just about energy security or reducing carbon emissions. It's a strategic move to position itself as a global leader in nuclear technology, with the potential for enormous economic payoff. The race is on, and the stakes are high, as nations compete to win the most valuable market on earth. Global Ripples: China and the USA in Focus The shockwaves from Niger are reaching far beyond Europe. China, with its ambitious nuclear program, recently struck a deal with Niger to extract more uranium. Now, it's watching its plans wobble on the tightrope of political instability. Sourcing uranium is critical for China as there are currently 24 nuclear reactors under construction… and another 199 reactors planned and proposed. The US, too, has stakes in Niger's stability, having made significant military investments there. The coup in Niger is more than a political crisis... It's a stark reminder of the intricate web that connects politics, resources, and global power. As the world watches Niger, the message is clear: the stability of our uranium supply can't hinge on the fate of a single nation. It's time to diversify, to forge new alliances, and to ensure that no country, company, or community is left in the dark. If you’re a Uranium Investor… - You want to own a company led by nuclear veterans who are large shareholders of the company… - That have successfully navigated the complex nuclear sector over the past decade. - A company that positions itself as the go-to solution for all nations and utilities who require uranium. - Cash rich and can move on deals fast. And thus provides an incredible platform for investors looking for upside while minimizing the downside risks most uranium companies are exposed to. LEGAL NOTE: PLEASE READ DISCLOSURES. THIS IS HIGH RISK AND YOU COULD LOSE ALL YOUR MONEY. KATUSA SPECIAL SITUATIONS STOCK ALERT: Uranium Royalty Corp. (UROY:US / URC:TSXV) Here’s what gets us excited… Uranium Royalty Corp (UROY.NASDAQ and URC.TSX) is the world's only dedicated uranium royalty company, uniquely positioned in a sector poised for growth. Uranium Royalty holds physical uranium above ground and their average price for those pounds is almost 50% lower than the current uranium price. That means that investment alone is up almost 100%! In addition, UROY owns royalties on 18 significant uranium projects, and UROY offers unparalleled diversification. Led by industry veteran Scott Melbye, the company's strategic acquisitions ensure a cost-effective uranium inventory. Propelling UROY are the four MEGA catalysts revving up the uranium market. The Global Reactor Ramp-Up China's nuclear ambitions are staggering. While they currently generate 4.6% of their power from 48 nuclear reactors, they're gunning for a 20% slice. The math? They'll need 150 more reactors to get there. Today, there are 24 under construction and a whopping 199 in the planning stage. By 2050, China's appetite will demand 97,500 tonnes of uranium yearly, overshooting the current global demand by 130%. And it's not just China. Japan, India, France, Russia, and several other nations have ambitious nuclear reactor plans. With over 90 reactors being ordered or planned worldwide and 300+ proposed, the fuel needs are skyrocketing. First-Load Fuel Surge Here's a key point—new reactors demand a lot more fuel to start with. Specifically, the uranium needs for these brand-new reactors are threefold compared to established plants. The last time China announced nuclear ambitions in 2010, the spot price for uranium zoomed. With nations now announcing reactors at breakneck speed, uranium demand is on a rising trajectory. The Small Modular Reactor + A.I. Revolution Big names like Warren Buffett and Bill Gates are championing the cause of Small Modular Reactors (SMRs). These aren't just compact nuclear reactors; they're industry game-changers. A crucial insight for those watching the uranium market… SMRs demand HALEU (High Assay, Low Enriched Uranium), which requires up to 5 times the upfront uranium compared to traditional commercial reactors. The Strategic Uranium Reserve Let's not forget the Strategic Uranium Reserve, a massive initiative already rolling out half a billion dollars to buy physical uranium. But there's a twist. This initiative is going to shake up the market dynamics, placing some players at a disadvantage, while favoring the select few who are deeply connected. As this uranium fervor builds, Uranium Royalty Corp (UROY.Nasdaq) is one of the Katusa Research team’s favorite ways to play the exciting uranium and nuclear sectors. As global demand for uranium surges and supply deficits loom, UROY stands ready to capitalize. Regards, Marin Katusa and the Special Situations Team IMPORTANT DISCLAIMER & DISCLOSURES Katusa Research, as a publisher, is not a broker, investment advisor, or financial advisor in any jurisdiction. Please do not rely on the information presented by Katusa Research as personal investment advice. If you need personal investment advice, kindly reach out to a qualified and registered broker, investment advisor, or financial advisor. The communications from Katusa Research should not form the basis of your investment decisions. Examples we provide regarding share price increases related to specific companies are based on randomly selected time periods and should not be taken as an indicator or predictor of future stock prices for those companies. Uranium Royalty Corp has sponsored this report. 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