Announcer: Wall Street Unplugged looks beyond the regular headlines heard on mainstream financial media to bring you unscripted interviews and breaking commentary direct from Wall Street right to you on Main Street.

Frank Curzio: How’s it going out there? It’s June 3rd. I’m Frank Curzio, host of the Wall Street Unplugged podcast where I break down the headlines and tell you what’s really moving these markets. Hope nobody’s listening to this right now, just getting ready for the 4th of July, one of my favorite holidays, which I broke down a lot of times with my family, going upstate and fireworks and stuff. Hopefully most of you are not traveling because I have no idea what was going on last week, but traveling was a disaster. Not just with me, but a lot of my friends, colleagues. I was telling the story, they just had trouble getting out of airports last weekend. For me, I was in New York for business and a little bit of pleasure since I played in a charity golf tournament, a memorial for a good friend that passed away around seven years ago that I play in every year and definitely got some business done and some meetings.

But the flight going to New York was okay from Jacksonville, but JFK coming back here … I mean, I really felt like I was in the Twilight Zone. My plane was supposed to leave originally 9:00 pm on Saturday. I specifically made the flight for Saturday night because who travels on Saturday. I figured it would be better than coming home, New York City on Sunday … Saturday night not too many people travel. I travel all the time and usually when I travel on Saturday nights, you don’t see a ton of traffic. First I’m pulling up to the JFK jet terminal, it was nice enough to have someone from the rental car I dropped off drive me up there. And as you know, most terminals, there’s a crowd when you get there. There’s a bunch of cars, you’ve got to go around them to drop somebody off. This was different.

The ramp leading up to the platform was completely jammed. It took me 15 minutes just to get to that crowded area to the actual terminal so I could get dropped off. Then once I got there, it was insane. At first, the terminal inside, nothing was working. None of the computers were working so the only way you could check in, if you had luggage, is by doing it outside and they had … JetBlue had nobody around. Nobody around that you could ask … nothing. It was like you were going to the track at the Kentucky Derby. That’s how crowded it was, it was insane on Saturday night.

You had to check in your bags outside, the line to check in your bag outside was at least 150 deep. I’m not talking about one, two … some of these people were flying international, had 10 bags. Of course it was like 90 degrees outside, so thank God I got there two hours early. I’m waiting an hour to check in my bags and I get up to the counter and there’s two ladies in line that were there for a very long time. They have eight bags of luggage. Out of the eight, five were overweight so that means instead of paying $35 or whatever, it’s going to be $60, probably more than that, something like that. So they literally open up every one of their bags, clothes all over the place, shifting things back and forth this way they could lower the weight so they didn’t have to pay. Took up at least an hour for that one spot. It was three spots, three people. Three people working there to help check in people for your luggage.

When I finally get up to the window, some guy barely speaks English, he comes and he’s like, “I got a question, question.” And as he’s asking a question, he’s like, “Can I ask you a question?” I’m like, “No.” You know what I’m saying. It took me an hour to get here, buddy. Get on line. I’m only going to be five minutes, please. He really didn’t speak English, he just completely ignored me and he decides to shoot out that question and ask it anyway even though I’m like, “Can I just get this done really quick? I’ve been waiting in line for an hour.” So the question he asks, he asks the guy, “Is this the JetBlue terminal?” And I actually turned to him, I’m like, “You’re kidding me?” Like I didn’t understand anything, is that really a question that you were dying to ask? The entire terminal is JetBlue, it’s written in letters pretty much the same size that you would find in a stadium, right in front of the terminal. A better question would have probably been, is this the airport? That would have been a much better question.

I kind of feel bad for what these people have to deal with because there’s crowds, people were pissed off, but really, that was the question that you asked. Like I said, it was like the Twilight Zone. Then I’m trying to rush since it’s getting close to boarding so I decide to upgrade my seat to more leg room. It wasn’t the leg room I needed, but by paying, it was only $35, it allowed me to fast track through the security gate. Basically I needed to do this because there were hundreds and hundreds of people in line and it wasn’t moving.

I was able to cut about 75% of the people, and they pushed us into a line and then the line I was on separated into two different lines, which I thought was great because now we have two people checking the IDs and everything and your boarding pass and we’ll get right through security and it’ll be fine. Absolutely not. One line, of course the line I wasn’t on, the guy was checking IDs and boarding passes really super-fast, checking like two or three people at a time, going in, okay, you’re good. Every five seconds, okay, you’re good. The line I was on, and for me to actually mention this, that’s how slow he was, and he was checking IDs and passports pretty much as slow as you possibly can. He was writing all over the boarding passes, writing a little note, putting your license into the machine twice to make sure it’s real or looking at the IDs. Looking at your face and looking at the license, looking at your face, looking … like three times and it’s painfully slow and now we have probably about 50 people who are on lane one just got ahead of me to go through security.

I’m getting a little nervous, like 30 minutes before my flight leaves, but you know, this gets even better. I get inside the terminal, I’m rushing because they already started boarding, at least that’s what I thought. But then I get a text from the terminal that says the flight’s delayed for an hour from 9:00 to 10:00 pm, so I really wasn’t too upset because I can grab a bite to eat. I was rushing, a little sweaty, I said, I can relax a little bit. So I relax, 9:30 rolls around, it’s boarding time and there is tons of people standing right in front of the line for the terminal and the terminal right across from us is also boarding and it’s delayed so there’s people everywhere. You almost can’t get down the aisle to get to the rest of the terminals, that’s how many people were there.

But specifically for us, we had people right in front of the terminal, right in front. They’re calling people, they’re like, “Group A”, and I was Group A after I upgraded, right. I’m trying to get in and as I’m trying to get in, I’m asking these people … and again, about 10 people didn’t speak English and I see one of their boarding passes and it’s like Group D or E. It’s like 20 minutes before you’re going to get on, 20 minutes before you’re going to get on. She calls … Could you move, because nobody could get on and then right before we’re about to get on, she makes an announcement, by the way the girl that’s making announcements, it was like, “Okay.” She was whispering, nobody could hear her, but they’re like, “The full flight crew isn’t here yet, so we’re going to have to wait a little while.”

They announce boarding, and say, “Wait, wait, wait, not yet.” Forget about the people standing in front who are boarding a plane last that are just blocking a terminal, that’s how crazy it was, but now we have to wait for another person for the crew to come in and we finally see someone come and they are walking, laughing like it’s … got anything to do and all these people are waiting so finally I board the plane and everyone’s now coming onto the plane. Again, when I boarded the plane, Group A, so I’m one of the first people. This lady with young boys boarded, two young kids, boards after me and I’m in row 12 and she’s … about 50 people boarded the plane, hardly anyone’s on it … She comes down the aisle to row 13 and puts the carry-on bags up into the baggage space on row 13. One of the kids goes, “Mom, we’re sitting in row five, why did you put your luggage there?” And she was like, “Oh my God.” There’s no way she can get back to the front of the plane. Everybody’s loading back on the plane.

She’s got these two kids forced in one aisle, she’s like sitting on my lap as people are coming in because she can’t get to the front of the plane. And she didn’t put the luggage in the back because all the spots were taken in row five, six, seven. No, she just had no idea. Had no idea what she was thinking of going to the back of the plane or in the mid part of the plane and putting the baggage there thinking she’s going to be able to … she had to wait for everybody to board before she can go back to her seat. I have basically this lady almost sitting on my lap waiting for everybody to come in before she can get to the front of the plane.

Finally everybody boards, we pull away from the terminal and we’re on the runway for about 90 minutes. So it’s midnight now, there’s 20 or 30 planes on the runway ahead of us, everywhere you turn, there’s just planes everywhere. So I laugh when so many people say the economy’s bad, it’s weakening. I had to wait 30 minutes to get a slice of pizza that I was going to pay $6 for. The economy’s fine, believe me. It’s not bad. We finally take off, I wind up landing at 2:30 am, this is Saturday right now it’s Sunday and I get my car. I have a parking ticket. I got to the automated lane and now the credit card machine doesn’t work. So I have to wait 10 minutes, 2:30 in the morning, before someone comes to help me. This girl comes over and I’m like, “These are new systems. Why did you get rid of the old ones? I’ve been coming here for eight years, they were perfectly.” She was like, “Well they were too old, we couldn’t update them.” I’m like, “Yeah, but they worked. Isn’t that better than upgrading to a system that doesn’t work?” You have to feel … I felt bad getting on her a little bit, but you have to realize it’s been a tough day.

I wind up getting home at 3:30. Now look, you know me, at least a lot of you’ve been listening to this podcast for a while, you know, I’m an optimist. I love people. I’m pretty easy going, generally happy guy. But almost every one of these problems were caused by stupid people. Either they are stupid or just complete inconsiderate. Not knowing the weight on five of your bags of luggage, which held up the line for hundreds of people, people not having their ID ready to check-in, their bags outside. The guy had to walk down, it took him five minutes to go down that line in front of JetBlue that we were all standing on and come back and say, “Could you please have your IDs out, this way you’re ready to check-in.”

People would get there then they wouldn’t find their ID for a couple of minutes with all these people in line. Nobody helping out in the JetBlue terminal, no workers anywhere just to say, “Hey guys, we’re having computer problems, please go out …” I went inside the terminal first and by the time I got outside, there was probably another 25 people in line. The lady storing her bags in the back of the plane when she’s sitting in the front … The people blocking the gate to get on the plane.

I mean, just a complete hot mess so the point of this long, aggravating … and I love venting, I love venting on this podcast, just helps me out tremendously. It’s like therapy, I always say. But I just hope and pray that if you’re traveling, you don’t experience any of this, but you may because 4th of July is one of the most high traffic days or travel days. So good luck if you’re traveling because I know when you have a time like I had, at least I can vent on the podcast where everybody listens and says holy cow, this is crazy. But when you walk in to see your family, your family members you haven’t seen in a while, after you have a trip like that … It’s stressful. Again, it’s not going to be fun, it’s not going to be happy and most of the stuff that happened to me could have simply been avoided if people were just a little smarter. I’m not talking about you have to be brilliant, just don’t be so stupid and things would have moved along a lot easier.

Anyway, I have a great podcast for you today starting with an interview from an old-time guest who is Amir Adnani, the chairman of GoldMining and CEO and President of UEC, which is great because we’re going to get the scoop on gold and also uranium. For gold, to see price move higher, is this just temporary or has the cycle finally turned after one of the most bearish cycles in the commodity in three to four decades? He’s going to answer that. Also about uranium, a lot of institution money flowing into the sector. Most of the long term fundamentals are great, which Amir is going to talk about. But more important, guys, in the next two weeks, Trump’s supposed to give his decision on a major petition that’s out there that could change the landscape for domestic producers like UEC.

Amir is going to tell you what that petition is, some of you know. It’s called 232, Section 232. And what he believes is going to be the President’s response. You don’t need to go through Congress. The President could just sign it. He’ll tell you what it is, how it’s going to impact the company and say will it get delayed, will it not. So you’re going to talk to an insider in this industry, give you a scoop on this and this is supposed to happen … Donald Trump’s supposed to rule on this measure by July 15, which is less than two weeks away. It’s a very, very big deal. A lot of people in the United States are on the sidelines, let’s hear what Amir has to say about it. And you know what, we’re going to get to that interview right now but quick disclosure.

Amir is in another country, we’re doing this interview so it’s a little choppy at some points, you’re going to be able to hear the whole interview, but again, I really appreciate he’s doing it from another country. A lot of guys I talk to are in the field, they’re doing work and that’s Amir and here’s that interview right now.

Amir Adnani, thank you so much for joining us again on the podcast.

Amir Adnani: Frank, great to reconnect with you. So much going on the topics that you and I care about. I can’t believe we’ve waited this long to reconnect, but I guess that gives us more to cover.

Frank Curzio: No, absolutely. I’m going to bring everyone in here in case you don’t know. Amir’s a good friend of mine, chairman of GoldMining and also the CEO and president of UEC. That makes you an expert on both gold and uranium. And I know you are humble when I say that term, but you’re involved in both of those industries and I want to start with gold. A lot going on, it’s from an industry that nobody cared about to everyone cares about all of a sudden. We’ve seen gold breaking through $1400 level.

What are you hearing out there? From a guy that talks to institutions and big investors because you can see a lot of [inaudible 00:14:32] trading and whenever we see a sector that just breaks through certain levels, a ton of money flows into these sectors right away, but what do you need to see to have a confirmation that the cycle has finally turned or basically that we’re finally out of one of the biggest cyclical downturns this industry has seen close to at least three to four decades?

Amir Adnani: There are so many variables here with the move in the price of gold and let’s go down the list.

Starting out with geo-political events, which I don’t think is the main driver, but why don’t we just start there. I think you look at the fact that the G-20 meeting went well, there is this sort of truce being called in the trade discussions. But I think at the end of the day if you were to kind of look at that and just practically think about it, I don’t think that these trade issues have been resolved because President Trump and President Xi had a good meeting in Osaka. These are complicated issues, it’s going to take a long time. It may have been a nice weekend in Japan, but I think that story continues to create issues and volatility on trade.

On the other side, you have issues in the Persian Gulf. You have issues with Iran, you have a whole host of Middle East related factors that geo-politically, I think, will continue to keep things kind of intense. When you look at it from those perspectives, I don’t think we’ve come out of the woods. Then you go to the US dollar, talk to some of the institutions in Asia overnight, the theme is to basically short the dollar right now. The dollar is under weakness ever since the doors were opened up by the Fed that might be the beginning of an even cycle taking place here. I think we may have seen peak strength in US dollar.

Look, you never want to bet against the US dollar, but even the President himself, President Trump is trying to talk down the dollar. A week ago there would be good for exporters, there would be good for economic activity, the Fed, we’ll see what it does and that kind of brings me to the next point, which is as far as gold goes, maybe it all comes down, Frank, to this next Fed meeting in July and what they do there.

Is it going to be 25 basis points, 50? I don’t think it’s going to be 50. Is it going to be the tone and the language and I think that’s going to be the next thing. If the horse leaves the barn on this one in terms of what the Fed says, and the market believes that this is now the beginning of an even cycle that we haven’t had in a long time, as far as what the Fed does, then it’s going to be a race to the bottom. Which, as we know, basically you look at what the ECB is doing, what the Chinese are doing. We’re basically entering a whole new period of the race to the bottom, see who can devalue their currency the fastest.

And it’s crazy to think that, right? Because you figure after almost over a decade of low interest rates, why do we need lower rates and why do we need to keep injecting more capital into the system? I feel like there’s already plenty of capital out there. But it’s incredible to think that this is where we are and I think it’s starting to really show itself in the move that we’re seeing in the price of gold. Gold is breaking out, it had a heck of a monthly close in the end of June. That was very constructive from a technical point of view. And now we’ve come into July, I think the next event is going to be the Fed meeting.

Frank Curzio: Yeah and you bring up some good points because I want everyone to put their personal feelings aside of what they think of the Fed, what they’re doing, lower interest rates and maybe it’s artificially propping up asset prices in the markets … you can complain about that on social media, you can hate Trump for that, you can hate current administration, but the bottom line is, when it comes to your money, this Administration wants lower interest rates and the world wants lower interest rates. You’re looking at, which is surprising really … I don’t know if you know this, I tweeted about this earlier, but the overnight index swaps indicate 100% probability of a rate cut in July, 100%.

Like you said, it’s kind of surprising with all the money being injected, but we’re looking at stocks close to all-time highs or at all-time highs, unemployment is still strong, our economic data it’s not terrible. It’s slowed down a little bit, it’s not crazy, but 100% July rate cut is pretty insane. If that happens, it is going to lead to a weaker dollar so I guess gold goes high, which leads me to the next question because with gold mining, and you’ve been accumulating ounces for over five years and buying projects very, very cheaply knowing that these assets would be worth more at a future time, I’m sure nobody thought, none of us thought, especially when Trump first got elected that we would continue to have a bearish cycle for close to seven years.

With gold going higher, does this change your strategy at all for GoldMining? Are you still looking to acquire assets, maybe develop some of the great projects that are in your portfolio, but what’s the plan right now?

Amir Adnani: Well let’s go through the sequence of steps. First of all, starting with the gold price and the points that we discovered. This breakout on the gold price needs to sustain itself probably for, I don’t know the exact time frame, Frank, but I think you would agree that just because the gold price breaks out, it doesn’t mean that gold stocks respond immediately. At least the ones that could respond immediately, are the ones that are held predominately in ETFs and the more passive fund structures that have been created.

The smaller gold companies, anything sub one billion market cap is not going to immediately catch the bit, so to speak, because the capital flow aren’t yet an active fund. They’re really initially going to hit the passive funds first, the ETF structures, et cetera. I think it’s going to take some time to see the following happen in my opinion. This is the main thing I want to draw your attention to and maybe for your listeners as well, which is the gold stocks and their weighting in the S&P 500, which currently is at one third of the 30-year historic average, which is quite remarkable.

So if we come basically anywhere close to the 30-year historic average of what the gold stocks weighting in the S&P 500, this will cause a major re-rating for those producers in terms of their multiples and where they are going to be trading at. Which will really then shift the focus to the biggest issue facing the sector in the industry for gold industry, which is shortage of reserves and resources. Because during this very long bear market environment that we’ve had since 2012, the last time the gold price was kind of hovering the current levels, the industry has got to focus on re-leveraging balance sheets, reducing debt and as a result cutting exploration capital.

Exploration capital between 2012 to 2016 was reduced from $20 billion to $8 billion and it’s taking longer all over the world to permit new mines to be built and to be brought into production. So I think the sequence of events will be that we see a move back towards historic averages of what the weighting is for gold stocks. That causes that positive re-rating on multiples, on net asset valuation for major gold companies, which should then … the number one focus will be on growth. Growth in the mining industry is how deep and how large your pipeline of resources are, basically pre-production projects.

Again, that’s where the industry is basically sitting at a decade low, when it comes to industry-wide resources and reserves. So now you dove-tail that back to what our strategy has been with our company, GoldMining, not to be confused with the industry gold mining, but GoldMining, our company, Frank, as you know very, very well because you’ve been tracking the company for a long time, since 2012, basically since the time we saw this drop in the gold price below $1400, we’ve been hovering below $1400 for six and a half years.

During this period when the major gold producers were focused on re-leveraging their balance sheet, cutting exploration, we have been focused on making acquisitions and the roll-up strategy that we’ve had of resource stage pre-production projects throughout the Americas has been about focusing on acquisitions in countries where there is established mining industries, areas where there are companies larger than us active and exploring and developing so we’re not the Lone Ranger. This creates a perfect environment for future [inaudible 00:23:35] activity.

And finally, a situation where, in the last six years, you could have been buying pre-production gold assets for 10 cents on the dollar because, again, the sector was absolutely deprived of any capital, exploration capital, development capital. Any of the funds that were set up to deploy actively managed funds into the gold industry had all the capital plucked out so there was no money to go around. We’ve been fortunate, and you know some of our key investors and backers, people like [inaudible 00:24:07], guys like Mario Garnero, who you’ve met, guys like Mick [inaudible 00:24:11], who you knew very well. These were people we were able to attract a very long time ago in the beginning and inception back the company to go pursue this roll-up strategy given the bear market.

I think we got lucky that we ended up with an extended bear market because it gave us a longer window, a longer time frame to be able to complete the various acquisitions that we’ve done, and as you point out, we’ve now managed to put together a portfolio in five different countries and the Americas basically with total resources, and this is mining terminology, but measured and indicated resources of 10 1/2 million ounces and another 11 million ounces of inferred resources. What that means is that these are our gold resources that have been drilled out and defined independently and if you put that in context, close to $280 million has been spent on the properties that we’ve acquired.

The total properties we have acquired cost us $80 million. So $80 million compared to $280 million previously spent. The value of the assets that we acquired, the market [inaudible 00:25:21] of these companies used to be over $800 million, hence my comments about buying for 10 cents on the dollar where our total acquisition cost, of everything we rolled-up since 2012 is about $80 million. The historic valuation of the assets in the form of public companies is about $800 million. Fascinating stuff especially now that we’re seeing a turn-around and a great job of the gold price.

Frank Curzio: So now that you’ve accumulated these assets, it’s kind of like almost like a sit-and-wait strategy, but you’re developing these, you’re reporting more news on them, but what are the catalysts here, do we have to wait for gold to continue to go higher? Do we want to see an increase in CapEx, more spending, or more M&A where it’s not just… We’ve seem M&A when it comes to the majors almost merging with each other, where juniors are actually getting acquired by majors. So what are your next steps in terms of … And the catalyst here is, hey you know what, we have a nice portfolio or is it still drilling down in these projects and maybe even just developing them as prices go higher and see if you don’t get a bid for them. You have some amazing assets in your portfolio, right?

Amir Adnani: I think you qualify the way I would describe the assets, besides let’s say, not calling them amazing, let’s drill down to numbers for a second. The total size of the portfolio that we’ve put together in five very mining-friendly jurisdictions between the US, Canada, Brazil, Peru and Columbia, in these five countries the total size of the resources that we’ve assembled is the largest, I repeat, largest portfolio of gold resources in the ground of any pre-production company listed in North America, listed in Canada. We’re listed on the [Foreign 00:27:09] Stock Exchange.

The sheer size advantage really stands out. Size matters in mining, size especially matters in bigger companies, bigger gold producers. Look for sizeable deposits to develop. And so if you look at the portfolio resources that we have, biggest [inaudible 00:27:26] content of portfolio of assets, you don’t have all your eggs in one basket, not just in one project or one country or one state of profits. That says a lot, that really sets the company apart, Frank, in terms of being a very exciting candidate in any kind of broader M&A that takes place in the gold industry.

However, between now and then we’ll be paying the company in a finish [inaudible 00:27:53] nimble position. Making sure cash on hand can last at least multiple years so that the company doesn’t need to dilute equity holders while we have this buy-and-hold strategy. That’s been key.

The last time we raised money was in 2016. Here we are 2019 and still have enough cash on hand for the next couple of years. That’s quite remarkable when you consider how often pre-production pre-revenue gold companies, resource companies need to come back to market to raise capital. We’ve really avoided that and the fact that, again, we last raised money in 2016 really speaks to how conservative we run the company and its cost structures. I think you can look at us also as an interesting way to get exposure to junior gold companies or junior gold assets through an ETF approach.

And what I mean by that, historically, Frank, you would buy the GDXJ, the GDXJ being the Junior Gold ETF, and that’s a product that completely got remade and reshaped a couple of years ago when they had to move up the market path spectrum and invest more in billions of other plus market cap countries, but that’s not really a Junior Gold ETF anymore when you consider the fact that we’ve put together so many companies and assets inside one company with our business. We, in essence, have become sort of like a Junior Gold ETF. Our cost structures are very low. While we hold these assets we’re actually adding value to them because we have a team of experts who are involved in remodeling or advancing that geological understanding around these assets, doing [permitting 00:29:28] work, so it’s not a true buy-and-hold. If you buy, you’re used to cost structures, you eliminate unnecessary costs and you focus on how to low cost activity, you can actually de-risk and advance these properties.

And when you look at it, I think it’s already attracting some interest from industry players. We have at least two mid-size gold producers who are shareholders of the company. When you look at our shareholder roster, we have a number of [inaudible 00:30:00] investors that are immune to the company as shareholders, who I think kind of view and in a way provide that endorsement we’ve been looking for that says this business strategy makes a lot of sense. You’re not taking on a lot of operating risks, you’re creating a lot of leverage on a per-share basis for the investors and the out-performance was varied.

You know, in 2016 our business strategy was best reflected in the bull run that we had in gold equities in 2016 where our company was the best performing gold stock, or one of the best performing gold stocks in Canada that year. And that year I don’t even think the gold price got as high as it has reached today, north of $1400. I think this is a very interesting setup here and I think when you compare our valuation today and [inaudible 00:30:47] for 2016, I think we’re trading at maybe one fifth valuation on a pro-resource basis today compared to 2016 and since 2016 we’ve markedly improved the quality, size and the location of our asset base through additional acquisitions made in 2017 and 2018.

Frank Curzio: That sounds great. What, for the bull market in terms of the assets you have, we’ll see the amount of cash you have on the balance sheet, which is pretty remarkable because we’ve seen so many companies raise money over the past three years and it’s going to be interesting with gold prices higher to see how many companies really use and take advantage of the bull markets to raise money with their prices higher, but that’s great stuff there.

Now I can go on and on about GoldMining, but I definitely want to talk about uranium. It’s a hot topic. It’s getting … I’m getting lots more emails believe it or not about uranium. Look, after testing at the $30 level, we’ve seen prices pull back to $24, 25 over the past couple of months. And to put this in perspective for the people that don’t know the industry that well for uranium prices. They were over $40 in 2014 and over $140 in mid-2007, pre-Fukushima. So I’m going to ask you this, Amir. I’m hearing that prices have come down, at least in the short-term, mainly because investors and companies are kind of on the sidelines right now until they see how Trump is going to respond to a very important petition called Section 232.

I guess, explain briefly what Section 232 is, because the President is supposed to make a decision on this by July 15, it’s a couple of weeks away, and what does it mean for UEC? Is it a big deal? Is it a game-changer because this is news we can see in the very, very short-term.

Amir Adnani: Maybe before I get into that I just want to say I am really fascinated by one thing, which is the number of topics and industries you cover on your show and in your newsletter and in the analytical work that you do. and as niche, perhaps as obscure as the uranium market can be sometimes, because it’s not something you hear, Citibank or Bank of America or Merrill Lynch write about. This is one where I’d say you’re probably one of the most knowledgeable analysts out there covering this because you’ve been doing it for so many years.

I’m glad you’re still covering it because we have a heck of a development here with this report that you point out, that the Department of Commerce has submitted to President Trump. This is sitting on the President’s desk right now. The official timeline is to get some kind of news or decision from the White House by or before July 13th. I don’t know when you’re going to be publishing this podcast, but our conversation could be going on and literally maybe this news might be on the tape already what the President’s decision is.

It’s a very interesting dynamic and I think, and I go back, Frank, to 2005 when, as an entrepreneur I became interested to form Uranium Energy Corp and what I was drawn toward was this dependence that the United States has and had back in 2005 on foreign imports. In 2005, when I got interested in this, the US was importing 10% of its uranium requirements. Sorry, 90% of its requirements, 10% of it was being mined. And today, it’s 99% of US requirements are being imported. And when you look at what also grabbed the attention of the chairman of our company, Spencer Abraham, who is the former United States Energy Secretary, was the same thing. Spencer wrote an op-ed that was published on Fox News and in USA Today over the last few months where he talks about this point. Where he says, when I was Energy Secretary and this was in the Bush Administration, the US was importing 50% of its oil requirements and they thought that was a national disaster. And through a combination of policy and American ingenuity and technology and financial markets, especially the US capital markets, all coming together.

That got results, that got turned around. Who would have thought in 2004 that the US in 2019 or even sooner than that be at par with Saudi Arabia when it comes to oil production. Think of the thousands of jobs that were created along the way and the kind of economic impact that had. That’s when the US was importing 50% of its oil requirements. With uranium, it’s 99% of uranium requirements being imported. And so this is probably beyond being a national disaster. It’s just lunacy, frankly. And that lunacy at a time, at a day and age where you can’t rely on the Russians, you can’t rely on the Chinese, you can’t rely on state-owned enterprises for your supply chains of anything.

Look at all the issues that we’re dealing with right now. And it’s troubling to me and people kind of make these arguments, well it’s a free market. Let me tell you one thing, in uranium mining it’s hardly free market when it comes to non-US or non-Canadian producers. I mean most of the world’s production, the majority of the world’s production is by state-owned or state-sponsored or state-backed companies. Where is the free market in that? And so the issue runs deep, it runs deep probably back to the Cold War days and it’s a bit of a complicated issue but more importantly, you look at the combined market cap of all US-based uranium companies, including that of UEC, it’s probably less than $600 million. That’s nothing when you consider, when you compare that to anything you want to compare that to. The combined market cap of all publicly listed uranium companies in the world is less than maybe $8 billion and that is peak. In 2007, it was $120 billion. But if we just focus on the US because that’s the impact potential decision by President Trump would have.

If the president says, “Look, to import 99% of our uranium is lunacy, it’s a national security issue. We need policy that helps support the development of the healthy and vibrant domestic uranium mining industry in the US.” I think, and I don’t know if you would agree with that, Frank, or not, I think that would be very good for the small, little subset of companies that you see as the biggest by market cap.

Frank Curzio: Yeah, I mean-

Amir Adnani: A market cap of $600 million. I mean, I think that would be very good for the US industry and it could create a new bull market in this very niche industry.

Frank Curzio: And with this petition, they have to show that it’s a threat to national security, right, and Trump doesn’t need Congress. He just needs … signature, if he comes out and signs it. Boom. What is it 25% of uranium has to be produced here or it’s going to be subsidized. And correct me if I’m wrong on that, but all he needs really is his signature, but it has to be proof of national security. Maybe people don’t think that or they don’t and maybe not for uranium as a threat, but you have to realize that we saw the same thing with steel when Chatham was dumping cheap steel onto our markets, where they consider that a threat to national security. We’ve seen tariffs being placed on different things outside of what we’re doing with China right now, right. This is before everything really went crazy.

But the fact that, if we’re doing this for different commodities, it makes sense that … and I’m looking at it from not like … totally being objective, I don’t care if you’re for or against this, but I’m saying from a money-making opportunity, which way would you kind of lean because … and I know it’s a tough question, and everybody I’ve talked to who is in this industry, who is involved, they are really like 50/50. They really have no idea, leaning each way of how the President’s going to react and a lot of them are surprised the President hasn’t reacted yet.

Amir Adnani: First of all, as we both have seen the President has a lot on his plate so I think this that we’re talking about a very active administration with a lot going on and a lot going on obviously with this Chinese file, which is ongoing and it’s been complicated, but let’s just come back to uranium for a second.

There’s really two important, and really the only two applications or sources that demand for uranium in the US are for power generation and to power a nuclear Navy. All the aircraft carriers and submarines run on nuclear power, you need uranium for that. When there’s trouble in the Persian Gulf and the USS Abraham Lincoln needs to be dispatched and go over there, this requires nuclear power, this requires uranium. 98% reactors are operating in the US generating electricity, emission-free electricity, in it, uranium year in and year out. The United States is the largest consumer of uranium for power generation, for powering the world’s biggest Navy. Are you telling me for all of that and for these two key applications, it’s all right to be importing 99% of the uranium from foreign sources? The majority of which from Russia, old former Soviet Union states like Tajikistan and Uzbekistan. That doesn’t add up and that 99% I’m talking about is only for reactor use. We’re not even talking about what the Department of Defense needs for the nuclear Navy and that is something they must use by law. Only US origin uranium. They can’t put Russian origin or even Canadian origin uranium into submarines and aircraft carriers.

Ultimately, I would say this, of all the Section 232 investigations that this Administration has launched over the last two years, I don’t think there’s a case as compelling as the case with uranium and the dependency on foreign imports. The steel and aluminum case, the auto case with Europe, none of them involved a situation where there’s this 99% import problem, this 99% over-dependency. None of the other cases are this severe. This is the most severe case. This is the most severe case that really has … You know when you’re talking about energy and defense, you’re truly talking about national security vulnerabilities.

I think this is a very compelling and strong case, Frank. And I think ultimately, there’s any argument, two sides to debate and the debate on the other side of it, in case you are wondering or your listeners are wondering, whose on the other side of it? Who doesn’t want this to happen? Well, it’s the US utilities. US utilities, and rightfully so because they are accountable to their customers. They don’t want to pay, they don’t want to see their costs go up. They don’t want to see anything that potentially has an impact to the bottom line for the rate payer. If you’re a rate payer, anyone that uses any kind of electricity would be a rate payer, the thing you’ve got to know is that if the uranium price doubled for the portion that we’re talking about for US demand, the difference it makes on a $110 electricity bill would be 10 cents. So you as a rate payer would see an insignificant increase on your monthly electricity bill if it was a doubling of the uranium price.

But at the end of the day, the utility lobby is strong and they when they make up their mind and say they don’t want to pay more, they lobby for that and so the other side of the argument is that the President will be sitting there and he will have the Department of Commerce, whose recommendation was reported by Bloomberg just last week. Bloomberg reported that Commerce is recommending to the President to take action, that they are recommending quotas, which means they are saying certain percentages of US demand should be met from US production. That’s what Commerce is recommending. That’s what Bloomberg has reported.

Now there will be other points of view that the President has to take into account as well, but let’s not forget the impact of the workforce, Frank. Jobs, there used to be a workforce in the US that was comprised of over 20,000, close to 30,000 people working in the US exploration and mining for uranium, which isn’t just jobs. It’s also expertise. That workforce had the expertise that’s now dwindled down to less than 400 people. That’s on its way to probably zero and so the other thing you have to tactically think about is, do we ever want to lose the entire workforce and knowledge base that makes up the supply chain and the raw material of vital commodities. Do you just want to let it go to zero?

Again, I think this is a situation that should, should resonate with President Trump. I think it should resonate with the Cabinet, the Defense, with Commerce. Obviously we know it’s resonated with Commerce, they are the ones that led the 270-day investigation into this. Companies, like ours, Uranium Energy is one of the handful of licensed producers of uranium in the US. Licensing is the barrier to entry for uranium mining. It takes seven to ten years to get licensed to be able to develop and process uranium. And so I think the level of engagement that we’ve had here as well has been, remember we’ve had very direct conversations with folks at basically from the Department of Energy to the Department of Commerce and I can tell you, Frank, I think the key point here has been, and the key question we’ve been asked, as an industry and UEC as a licensed producers, can the industry ramp up? Can the industry get back and be competitive and meet the demands that quotas would set? And the answer is absolutely yes and in fact, I believe not only can we meet the quotas, I think this can become a world class industry in the US.

It’s been so overlooked and it’s been so underfunded and under-capitalized for decades. And I think this is something really exciting here. I think it’s a really exciting possibility that starts with this decision from President Trump by or before July 13th. Now Frank, maybe there’s a delay or extension in the decision, I have no idea, and as you and I know, with the White House, we can’t perfectly predict things. But we should see or hear some decision and it could potentially be the beginning of something that ushers in a whole new era of growth and development. This new industry that’s got a lot of history, but in a way kind of becomes a new chapter for the US uranium mining industry. Full of growth, full of potential and some really exciting potential.

Frank Curzio: Interesting enough, being tapped into institutions on the institutional level, a lot of people I’ve talked to actually investing in this sector. Some of them for the first time ever, a lot of them first time in over a decade and I have to tell you, most of them don’t really care about Section 232 or how it’s going to turn out or anything short-term related. They are investing simply because they are looking at the fundamentals of extreme low supply and increase in demand that is eventually going to result in much higher prices.

Like I said, a lot of these investors don’t really care about the short-term, they just believe uranium prices and many uranium stocks are going to surge maybe over the next three to five years and they are positioning themselves. Could you talk about the fundamentals of the industry because I feel like being lost in the Section 232 in this industry, it’s really forced prices to come down, people are being on the sidelines, but yet if you’re just looking at the macro picture, the whole picture of this, I mean, the fundamentals are screaming right now that prices are going to surge no matter which way you look at it or how you analyze it.

Can you talk about that part of it, because I think people are getting lost. It’s all about Section 232 when it’s really not, it’s even a much bigger story than that.

Amir Adnani: You know when I first started talking about uranium, which was many years ago, it was obviously before Trump, it was before 232. Frankly, it was before a lot of this new interest that we’re seeing in uranium, maybe because of Section 232 over the last year, but if you go back longer term, prior to all of this, the bigger trend here is really about the fact that there’s population growth. We’re basically going from over seven billion to nine billion over the next 20 years, world-wide population that requires an energy mix that is more and more in line with climate change issues and reducing basically carbon emissions. And so there’s been this tremendous turnaround in an effort towards supporting nuclear power from climate organizations, climate scientists and notable individuals like Bill Gates.

Bill Gates is putting a tremendous amount of his own money and voice and support. There isn’t a week that goes by where he’s not tweeting about nuclear power and how it will sweep the planet due the very unique characteristics of being able to generate large-scale electricity without carbon emissions. That’s something that renewables are still not able to manage, is that large-scale capability in terms of large-scale electricity output. And also in a 24/7 manner. So I think the capacity manner on solar and renewable, last time I checked, was about 70%. So it works 30% of the time, whereas nuclear power is 95% and works 95% of the time. There’s a big difference there.

What we’re seeing is, in 2019 and in 2018, this happens that world-wide nuclear energy generation went back to levels higher than pre-Fukushima, the levels we last saw in 2011. World-wide demand for uranium is increasing as a result of over 50 reactors being under construction, a couple of hundred more planned or proposed. And finally, because of the long period of the downturn in uranium prices, we saw a lot of mine closures and a lot of supply reduction which helps kind of rebalance the market from a supply and demand point of view for uranium. But again, coming back to demand. Demand for uranium is really nuclear power generation, which is now finally getting back to a point after a long eight-year period since Fukushima happened, we’re seeing the industry get back in a groove.

This is a growth industry. We’re seeing, again, best growth in nuclear power in 25 years. We’re seeing in the last few years in terms of reactors being connected to the grid, in terms of reactors under construction. A lot of the growth is coming from the biggest cities and countries of Asia where pollution is a huge issue so going back to emission- free electricity generation. And so all of that, you’re absolutely right, Frank, we can lose sight of that. This isn’t just the US market. The US market is an important market because it’s the biggest market for uranium demand, and what the President does will definitely have in a certain … it will reverberate through the industry and the global supply chain, but it is a global business that’s going through a tremendous … some of its best growth in the last 25 years, as I mentioned.

And all of that, we can lose sight of because I think this uncertainty around what Trump is going to do has definitely kind of created a bit of a cloud over the industry. It’s going to put a bit of wet blanket around the industry. So once you remove that uncertainty, regardless of which way he decides to go, that should be very positive for an industry that is growing. The supply and demand fundamentals look much better because demand is rising, supply has been declining because of mine shut-downs and this very low uranium price that no company can really make money at. The world’s biggest producers are cutting down production and citing the low prices as the reason for that. That always is a good signal that you know you’ve hit bottom with a commodity.

Any time a majority of the mines for any commodity are not making money and they are losing money, that typically signals bottom because you either have to shut down all those mines indefinitely or the price will respond and go higher. And in this case, unless we’re going to shut all the reactors in the world down, which is over 400, which in this case if we do 15% of electricity world-wide goes off and literally so the lights go off, that’s not going to happen. So the price has to have an upward correction and I think we’re in the early phases of seeing that.

Frank Curzio: All right, so we covered a lot here. Great stuff on uranium, great stuff on gold. I want to ask you … Here’s the last question here because you recently sent me, I think it was yesterday, earlier today about bookies and how they are presenting the odds on every candidate to win the election next year. Obviously Trump is well ahead and everybody else is from the democrats are … I wouldn’t say the same, but kind of, whatever, not really a shot right now, which is expected but I’m going to ask you a tough question.

As a gold guy, and we recommended GoldMining just before Trump got elected and when Trump got elected, which was kind of a surprise to most people out there. Of course everybody said that they predicted it today, but nobody really did. Very few people. We thought it was going to be a boon to the gold industry, create uncertainty. I mean, it was a huge surprise to everybody out there when Trump got elected that it would be worse, but for gold, is it … And being a gold guy, for GoldMining, do you want to see Trump lose because maybe it’s better on the democratic for gold, but when you’re looking at uranium, it’s clear that it’s probably positive under Trump, no matter how he votes on 232, but is it kind of conflicting with you? Because I think win or lose, it’s going to be good or bad for any company, do you look at that at all or is it like, is it going to change your strategy because a lot has changed in the gold industry since Trump got elected.

Amir Adnani: No, I really think the [inaudible 00:53:22] President Trump and his reelection and I’ll tell you why. We’re seeing for the first time, bipartisan support for nuclear energy in America, in DC, on Capitol Hill. Frank, earlier this year there was a new bill signed by President Trump that had bipartisan support called the Nuclear Energy Innovation and Modernization Act. By the way, it got zero press because I guess the press doesn’t want to cover things where there’s bipartisan support and there isn’t any bickering. The one thing that the left and the right agrees on, even AOC, when she came out initially in her definition of the Green New Deal had excluded nuclear energy. I think they quickly edited and took that out, meaning they didn’t take a position against nuclear power. You’re seeing again very important climate organizations and groups that were previously engaged in nuclear energy, the Natural Resource Defense Council, the Union of Concerned Scientists, Sierra Club, are now coming around and realizing that without nuclear in the mix we cannot reach the bigger objectives around reducing global temperatures, dealing with climate issues.

I really think there is bipartisan support there and I believe there is growing bipartisan support there. And that goes beyond the reelection and Trump and all that. The biggest thing I think with the US dollar and the issues around gold is, really I want to draw your attention to a couple of interesting things. Just last week there was a 100, hundred, one hundred year bond that the country or government of Austria offered, 100-year bond yielding 1.2%. Talk about economic lunacy, now on top of that the market value of bonds trading negative yields, which also was once thought to be economic lunacy, has hit a new record of 12.5 trillion surpassing whatever the last peak is. With that … those are not two year trends in terms of I think where world-wide debt is headed, these low rates that are going to be here with us for longer term. I think all this is bad for [inaudible 00:55:44] currency because, again, it goes back to the issue around real rates, which has to be obviously your nominal rates adjusted for inflation and despite the fact that there’s this thing … there is no inflation.

The reality is, there is a growing amount of negative yielding bonds out there, record lows and any kind of Fed easing isn’t going to change that, it’s only going to increase that and I think ultimately negative real rates are going to be the key underpinning for the next big upward move in the gold price and I don’t think that’s a Trump issue, I don’t think that’s a right or left issue. I think those numbers and those trends are way bigger than anyone that occupies the White House. And that’s why I think we’re beginning to see this breakout in gold which really sets the stage for the next major round.

Frank Curzio: That was such a politically correct answer. You were like Switzerland on that answer. I was expecting, obviously I wasn’t expecting you to be like, “No, Trump wins. I want Trump to win.” You’re not allowed to say who you like in presidential candidates in the public anymore because you lose half your audience all the time, but that was a very politically correct answer. And it made a lot of sense too. I hear exactly what you’re saying in negative real interest rates and we’re seeing guys, look the dollar is coming down and definitely good for gold and interesting to see what’s going to happen with uranium with 232 coming up.

I’m going to see you in a couple of week at Freedom Fest. Guys, that’s in Vegas. Amir’s going to be speaking there, I’m going to be speaking there. So, if you guys want to attend, just send me an email at Frank@curzioresearch.com. But Amir, thank you so much for coming on the podcast. We really covered a lot. You’re always able to educate my listeners. I know they love you and I really appreciate it, man. Hopefully we’ll get you on really soon.

Amir Adnani: Thanks, Frank. Really appreciate it and always great to be with you in your podcast and I’ll see you soon.

Frank Curzio: Thanks, buddy.

Great stuff from Amir. I always say this podcast is about you, not about me so let me know what you thought at Frank@curzioresearch.com. That’s Frank@curzioresearch.com. Love that he breaks down things, he doesn’t just talk about Section 232 or even the fundamentals of gold without explaining and putting explanations behind it. This way you get everybody involved, even if you’re a new investor or you’re an experienced investor. I always love interviewing Amir, he’s great at doing that and also a good friend. So, again, let me know what you thought about that interview at Frank@curzioresearch.com.

Guys, thanks so much for listening. Next week we’ll return to an educational segment. Want to keep it a little short with the holiday. Again, hopefully none of you are listening to this, if you are, maybe you’re listening to it on a plane or you’re driving to wherever you are. Safe travels, I’m really praying you don’t have the experience I just had. It was really, really crazy last weekend. It is draining. It is going to be busy out there. Remember, it’s family time, you’re going to have a lot of fun. Don’t talk politics, drink beer, have a great, great time. Thank you so much for listening. I’ll see you guys in seven days. Take care.

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