Sprott Inc. · TSX:SII
Sprott — Sprott Physical Uranium Trust — Investor Presentation (August 2021)
34 slides from Sprott's investor presentation, Aug 31, 2021
Slide 1: Sprott Physical Uranium Trust
Sprott Physical Uranium Trust August 31, 2021 V3_09.09.2021
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 the largest and only physical uranium fund currently in the marketplace1 2. Experienced Commodity Fund Manager & Uranium Technical Advisor • Sprott Asset Management LP serves as the Trust’s mana
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 ~21 million pounds of uranium, representing ~$750 million in AUM • The Trust’s assets represent enough uranium to power France’s nuclear energy needs for ~10 months, based on calculations derived by WMC Energy Assets % of Trust Total
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 Efficient, Reliable, Clean and Safe • Nuclear energy is highly efficient and reliable 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 Efficient…
Nuclear Energy is 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 (~ the size of a gummy bear), and weighs ~10 grams1 So
Slide 10: Reliable: Capacity Factor
Reliable… • Nuclear energy has the highest capacity factor1 versus both traditional and alternative energy sources, prompting renewed attention to help solve global energy needs 92.5% 63.2% Capacity Factor 56.6% 41.5% 40.2% 35.4% 24.9% 13.4% Nuclear Biomass Natural Gas Hydro Coal Wind Solar Oil 1 Me
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: Mortality Rate and Radioactivity
Safe • Uranium is responsible for the lowest mortality rate per terawatt hour (TWh) of energy produced • Post-reactor radioactivity shows significant reductions after just ten years Mortality Rate per TWh of Energy Produced Radioactivity Post Reactor Use (years) 125 Mortality Rate Energy Source (per
Slide 13: New Uranium Bull Market May be Emerging
New Uranium Bull Market May be Emerging • 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 June ’07 Nov. ’16 to Aug. ’
Slide 14: Uranium Buying is Accelerating
Uranium Buying is Accelerating • Non-utility buying of spot uranium has historically pre-empted rising prices • Financial investors and junior speculators are estimated to have record-high spot uranium purchases in 2021 and beyond 30 $100 $90 Non-Utility Uranium Spot Purchases 25 $80 (Millions Pound
Slide 15: Investor Sentiment is Turning Positive
Investor Sentiment is Turning Positive • Gains in uranium equities have recently been strong reflecting investor expectations for higher uranium prices 160.0% 140.0% 120.0% +164.96% World Uranium Total Return Index 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% -20.0% -40.0% 2016 2017 2018 2019 2020 World Uran
Slide 16: 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 17: 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 18: Global Policy Initiatives Support Nuclear Energy
Global Policy Initiatives Support Nuclear Energy • The U.S., Europe, China and Japan are recognizing nuclear’s vital role as a carbon-free energy source United States European Union (EU) • Biden’s proposed FY2022 budget includes: • EU indicated that nuclear energy does not Production tax credit to
Slide 19: New Policies Likely to Result in Clear Winners & Losers
New Policies Likely to Result in Clear Winners & Losers • Burning fossil fuels emits more radiation than nuclear power generation and the radiation is combined with CO2 and directly released into the atmosphere while nuclear radiation is physically contained Source: U3O8 Corporation. Sprott Physical
Slide 20: Decarbonization Goals Align with Nuclear Growth
Decarbonization Goals Align with Nuclear Growth • Major nations have set aggressive decarbonization targets 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 Swe
Slide 21: 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 22: Nuclear Reactors: Operational and Under Construction
Nuclear Reactors: Operational and Under Construction • There are a total of 444 operational nuclear reactors globally with 51 currently under construction 120 112 112 106 • Reactors currently under construction 100 are larger and produce more energy • Newly constructed nuclear reactors demonstrate g
Slide 23: Portfolio Allocation Considerations
Portfolio Allocation Considerations • Broad commodity indices tend to be heavily-weighted towards fossil fuels • Uranium may help investors seek pure clean-energy commodity exposure while offering diversification versus major asset classes Sector Breakdown of S&P GSCI Index1 Correlation to Uranium S
Slide 24: A Global Leader in Precious Metals and Real Assets Investments
A Global Leader in Precious Metals and Real Assets Investments US$18.6B in AUM1 Sprott (SII) is publicly listed on the NYSE and TSX Exchange Listed Managed Products Equities Lending Brokerage ~$13.4B AUM ~$2.7B AUM ~$1.0B AUM • Physical Bullion Trusts • Flagship U.S. gold equity • Bespoke credit inv
Slide 25: 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 26: 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 the Management Information Circular or the Prospectus for a description of these risks.
Slide 27: Appendices
Appendices 27
Slide 28: The WMC Energy B.V. Technical Advisor Team
The WMC Energy B.V. 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 year
Slide 29: 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 444 power reactors; 50 more reactors are under construction, equivalent to ~15% of existing capacity Oil Other S
Slide 30: 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) | 30
Slide 31: 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) | 31
Slide 32: 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 33: 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 34: Largest Uranium-Producing Countries
Largest Uranium-Producing Countries • Kazakhstan and Australia produce over 50% of the world’s total uranium 25,000 2020 Uranium Production (Tonnes Uranium) 20,000 19,477 15,000 10,000 6,203 5,413 5,000 3,885 3,500 2,991 2,846 1,885 400 400 - Source: World Nuclear Association as of 12/31/2020. Sprot
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