Sprott Inc. · TSX:SII
Sprott — Sprott Physical Uranium Trust — Investor Presentation (June 2022)
39 slides from Sprott's investor presentation, Jun 30, 2022
Slide 1: Sprott Physical Uranium Trust Investor Presentation
Sprott Physical Uranium Trust Investor Presentation June 30, 2022 V4_08.15.2022
Slide 2: Sprott Physical Commodity Trusts
Sprott Physical Commodity Trusts • Provide a secure, convenient and exchange-traded investment alternative for investors who want to hold physical precious metals and commodities • Sprott Asset Management LP serves as the Trust’s manager and is backed by more than four decades of physical commodity
Slide 3: Sprott Physical Uranium Trust
Sprott Physical Uranium Trust Sprott Physical Uranium Trust (“Trust”) began trading on July 19, 2021 marking the successful completion of Sprott’s reorganization of the Uranium Participation Corporation, the world’s largest physical uranium fund.1 Trust Investment Objective & Strategy The Trust will
Slide 4: Trust Key Benefits
Trust Key Benefits 1. World’s Largest Physical Uranium Investment Fund • Sprott Physical Uranium Trust is largest and only publicly-listed physical uranium fund currently in the marketplace.1 2. Experienced Commodity Fund Manager & Uranium Technical Advisor • Sprott Asset Management LP serves as the
Slide 5: The Trust Holds "Yellowcake" Uranium
The Trust Holds “Yellowcake” Uranium • The Sprott Physical Uranium Trust will hold primarily uranium as U3O8 or “yellowcake”, which is created in the first stages of its lifecycle from mined ore to spent fuel Sprott Physical Uranium Trust (TSX: U.UN) | 5
Slide 6: How Much Uranium Does the Trust Hold?
How Much Uranium Does the Trust Hold? • The Trust currently holds ~56 million pounds of uranium, representing ~$2.9 billion • The Trust’s assets represent enough uranium to power France’s nuclear energy needs for over two years, based on calculations derived by WMC Energy Assets Total Market Value W
Slide 7: The Investment Case for Uranium
The Investment Case for Uranium 7
Slide 8: Why Invest in Uranium Now?
Why Invest in Uranium Now? 1. Relatively More Reliable, Efficient, Clean and Safe • Nuclear energy is highly reliable and efficient compared to other forms of electricity generation1 • Nuclear energy is one of the cleanest energy sources based on CO2 emissions • Nuclear energy is one of the safest e
Slide 9: Nuclear Energy is Reliable
Nuclear Energy is Reliable… • Nuclear energy has the highest capacity factor1 versus both traditional and alternative energy sources, prompting renewed attention to help solve global energy needs • Most nuclear power utilities are required to hold at least three years’ worth of uranium supply2 92.5%
Slide 10: Efficient
Efficient… • Uranium’s high energy density reduces the impact of extraction and transport, facilitating the ability to contain waste • One nuclear fuel pellet is roughly 10-13 millimeters long and 8-13.5 millimeters in diameter (approximately the size of a gummy bear) and weighs ~10 grams1 Source: A
Slide 11: Clean: CO2 Equivalent Emissions per Gigawatt-Hour
Clean… • Nuclear energy produces the least CO2 equivalent emissions versus other energy forms, helping solidify its place in global decarbonization goals Greenhouse Gas Emissions Nuclear 3 CO2 Equivalent Emissions per Gigawatt-Hour Wind 4 Solar 5 Hydro 34 Biomass 154 Natural Gas 490 Oil 720 Coal 820
Slide 12: Safe
Safe • Uranium is responsible for the lowest mortality rate per terawatt hour (TWh) of energy produced • Post-reactor radioactivity shows significant reductions after just 10 years Mortality Rate per TWh of Energy Produced1 Post Reactor Radiation Levels (years)2 125 Mortality Rate Energy Source (per
Slide 13: Nuclear Power May Offer Greater Energy Security
Nuclear Power May Offer Greater Energy Security • In the wake of Russian sanctions, the European Union (“EU”) released a 10-Point Plan on how to reduce their reliance on Russian Natural Gas, promoting nuclear energy as part of their solution • Natural gas prices in Europe have soared compared to the
Slide 14: New Uranium Bull Market is Underway
New Uranium Bull Market is Underway Potentially with Room to Run • Uranium is emerging out of a protracted bear market • Growing production/demand imbalance and future utility contracting provide primary price support $160 Bull Market 1 Bull Market 2 Bull Market 3? Jan. ’73 to May ’78 Dec. ’00 to Ju
Slide 15: Uranium Buying Has Been Strong
Uranium Buying Has Been Strong • Non-utility buying of spot uranium has historically pre-empted rising prices • Financial investors and junior speculators had record-high spot uranium purchases in 2021, which has slowed somewhat in 2022 due to global bear markets 60 $100 $90 50 Non-Utility Uranium S
Slide 16: World Uranium Production vs. Reactor Requirements
World Uranium Production vs. Reactor Requirements • World uranium production is currently failing to meet nuclear reactor requirements • The Cold War resulted in vast overproduction until the early 1990s followed by decades of underproduction thereafter 80,000 70,000 60,000 50,000 40,000 tU 30,000 2
Slide 17: Investor Sentiment is Strong on Uranium Equities
Investor Sentiment is Strong on Uranium Equities • After trading flat from 2017-2019, uranium miners and uranium spot prices have been on the move since 2019 300.00% 250.00% 200.00% 150.27% Total Return 150.00% 149.38% 100.00% 50.00% 0.00% -50.00% World Uranium Equities Uranium Spot Price Source: Bl
Slide 18: Uranium Production & Demand Imbalance Likely to Grow
Uranium Production & Demand Imbalance Likely to Grow • Uranium demand is projected to grow and outstrip waning production • New production unlikely to come online without higher prices • Production/Demand gap is currently filled with a finite secondary supply 250 225 200 175 Million Pounds of U3O8 1
Slide 19: Global Demand for Energy Estimated to Increase
Global Demand for Energy Estimated to Increase • By 2040, global electricity demand is expected to increase by 49% from 2019 levels 45,000 40,094 40,000 35,000 +49% World Electricity Demand (TWh) 30,000 26,942 25,000 20,000 15,000 10,000 5,000 0 1990a 2000a 2019a 2025e 2040e Source: IEA World Energy
Slide 20: Global Annual CO2 Emissions
Global Annual CO2 Emissions • Carbon emissions from CO2 continue to rise exponentially each calendar year • Large geopolitical events had only minimal impacts on annual emissions • Global fossil CO2 emissions in 2021 are set to rebound 4.9% after a record 5.4% drop in 2020 40.0 35.0 Great Financial
Slide 21: What is a Net-Zero Carbon Future?
What is a Net-Zero Carbon Future? • Carbon neutral: any CO2 released into the atmosphere from a company’s activities is balanced by an equivalent amount being removed through offsets • Net-Zero carbon emissions: activity or practice which minimizes CO2 release to achieve net- zero carbon emissions •
Slide 22: Global Policy Initiatives Support Nuclear Energy
Global Policy Initiatives Support Nuclear Energy • Global governments are recognizing nuclear power’s vital role as a carbon-free energy source United States European Union (EU) • US. Department of Energy has requested $4.3B to • UK new energy security policy includes 16GW of assist with transition
Slide 23: Nuclear Energy Sentiment is Improving
Nuclear Energy Sentiment is Improving Dates of publication: Financial Times: 10/15/2021 Reuters: 10/11/2021 Fortune: 10/12/2021 Daily Journal: 9/15/2021 Bloomberg: 10/4/2021 The Washington Post: 1/1/2022 Sprott Physical Uranium Trust (TSX: U.UN) | 23
Slide 24: New Policies Likely to Result in Bullish & Bearish Results
New Policies Likely to Result in Bullish & Bearish Results • Burning fossil fuels emits more radiation than nuclear power generation • Radiation from fossil fuels is combined with CO2 and directly released into the atmosphere while nuclear radiation is physically contained LONG-TERM BULLISH RESULTS
Slide 25: Decarbonization Goals Align with Nuclear Growth
Decarbonization Goals Align with Nuclear Growth • Major nations have set aggressive dates to decarbonize Decarbonization Goals Nuclear Share of Electricity Generation United Kingdom Canada EU 2050 2050 2050 16% Belgium Finland Japan 15% 48% 35% 2050 Spain Germany 8% 21% 12% Russia Switzerland Sweden
Slide 26: Nuclear Radiation into Perspective
Nuclear Radiation into Perspective Understanding Nuclear Radiation Measuring Nuclear Radiation • Nuclear radiation exposure is minimal compared to the many • Radiation stemming from nuclear energy is far less when sources of radiation we could come across in our daily lives compared to activities no
Slide 27: Nuclear Reactors in the World Today
Nuclear Reactors in the World Today • There are now 434 operational reactors globally with 57 under construction and 97 planned • Newly constructed nuclear reactors demonstrate greater efficiency than older models Operational Reactors: 434 Reactors Under Construction: 57 Reactors Planned for Constru
Slide 28: Specialty asset management
Specialty asset management US$21.9B in AUM1 Sprott (SII) is publicly listed on the NYSE and TSX Exchange Listed Managed Products Equities Lending Brokerage & Other $16.9B AUM $2.7B AUM $1.6B AUM $0.7B AUM • Physical Bullion Trusts • Flagship U.S. gold equity • Bespoke credit investments • Capital ra
Slide 29: Contact Sprott
Contact Sprott Financial Advisors and Individual Investors Please contact the Sprott Team at 888.622.1813 for more information, or answers to your questions. You can also email us at [email protected] Ed Coyne Senior Managing Director, Global Sales T 646.599.0859 | [email protected] John H. Kinn
Slide 30: Important Disclosure
Important Disclosure The Sprott Physical Uranium Trust is generally exposed to the multiple risks that have been identified and described in the Management Information Circular and the Prospectus. Please refer to Information Circular or the Prospectus for a description of these risks. Past performan
Slide 31: Appendices
Appendices 31
Slide 32: The WMC Energy Technical Advisor Team
The WMC Energy Technical Advisor Team Mandeep Ludu Head of Nuclear and Renewables Mandeep joined WMC Energy in 2019 with a comprehensive background in marketing, business development and finance, predominantly in the nuclear fuel industry. Prior to joining WMC Energy, Mandeep spent over 15 years wor
Slide 33: Nuclear Power in the World Today
Nuclear Power in the World Today • The first commercial nuclear power stations started operation in the 1950s • Nuclear energy now provides about 10% of the world’s electricity from about 434 power reactors Oil Other Solar, Wind, 3% 3% Geothermal, Tidal 7% Nuclear 10% Coal 38% Total 26,730 TWh Hydro
Slide 34: The Most Reliant Countries on Nuclear Energy
The 30 Most Reliant Countries on Nuclear Energy Source: International Atomic Energy Agency (IAEA). Sprott Physical Uranium Trust (TSX: U.UN) | 34
Slide 35: Global Primary Electricity Consumption by Source
Global Primary Electricity Consumption by Source Source: Vaclav Smil and BP Statistical Review of World Energy. Our World in Data. Direct primary energy consumption does not take account of inefficiencies in fossil fuel production. Sprott Physical Uranium Trust (TSX: U.UN) | 35
Slide 36: How Does Uranium Help Achieve "Net-Zero Carbon"?
How Does Uranium Help Achieve “Net-Zero Carbon”? • The world is moving towards net-zero carbon energy • As one of the cleanest and most powerful sources of energy, nuclear power could play a key role in helping countries achieve decarbonization goals in the fight against climate change Source: Sprot
Slide 37: Largest Uranium Producing Countries
Largest Uranium Producing Countries • Roughly half of total uranium production in 2021 came from Kazakhstan China Other 3.2% Niger 3.4% 4.7% Russia 5.9% Uzbekistan 7.1% Kazakhstan 45.7% Australia 7.8% Canada 9.8% Namibia 12.4% Source: UxC LLC as of 12/31/2021. Sprott Physical Uranium Trust (TSX: U.U
Slide 38: History of Uranium Production by Country: 1940-2019
History of Uranium Production by Country: 1940-2019 Source: Nuclear Energy Agency & IAEA – Red Book. Sprott Physical Uranium Trust (TSX: U.UN) | 38
Slide 39: Total Spent Nuclear Waste
Total Spent Nuclear Waste • If all the nuclear waste from commercial reactors, a 63-year operating history, was stored in a cube it would measure just 96 feet per side • Nuclear waste produces the smallest amount generated by any source of energy when considered on an “all-in” basis Height (feet) So
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