🧲 Flow, Baby, Flow

UUUU is a Western vertically integrated rare earth elements, advanced materials and uranium supply chain, a moated flywheel, a national treasure and strategic asset, well-positioned for a conflicted geopolitical world, ready to supply scarcities towards aerospace, military & defense, semiconductors, AI datacenters, robotics, automobiles and nuclear energy, benefiting from government support including proposed sector price floors, financing and a possible equity stake. I cannot imagine a world where the United States and the West fail to support their critical supply chain.

I am in because I see an asymmetric payoff. I own shares of a company that has a staggering collection of globally diversified assets and is about to rapidly accelerate mine-to-engineered-magnet solutions, and is hedged by projected 2 million lbs of uranium annually with all-time-high contract prices. I own a company with a brilliant CEO and brilliant management who have my full confidence in execution. I own a company with the safest fundamentals in the sector, and I own permanent call options on domestic nuclear, rare earth elements and "the story" with high reflexivity potential.

What I see that the market ignores: I believe the recent sell-off has been passive ETF outflows rotating away from high-capex sectors due to the recent rate hike, and retail investors without conviction following. Institutional investors must follow mandates and restrict their positions and protect against career risk. As an individual investor, I can allocate 100% concentration to a future need that is temporarily unpopular, and hold. I have no career risk, no position-sizing requirements, and I do not have to leave before short-term events. I possess a structural advantage. I am willing to hold through a 50 or even 100 percent portfolio loss, unlike most retail investors.

The markets aren't likely considering Ross Bhappu's Ph.D. degree in Mineral Economics, or his nearly $1 million insider purchase made in July. They nonsensically sold the stock after the VAC deal was announced, negatively appraising their state-of-the-art Sumter plant in South Carolina, which is expected to produce 2,000 tonnes of magnets a year, scalable to 12,000 tonnes. They've lost focus on the White Mesa Phase 2 expansion, which is expected to produce 6,000 tonnes of NdPr a year.

Competitive advantage: moated (permitted), much heavy capex for mining and materials already sunk (White Mesa has existed since the 1980s, the South Korean metals factory and South Carolina magnet factory already exist), positioned to be the supplier of choice, high gross margin and low-cost operations (projected to be competitive with Chinese prices), one of the few US companies that can handle rare earths contaminated with radioactive materials, US gov support ($725m loan, possible future equity stake/ price protections), stellar management, globally diversified assets, and a pipeline that is ready to be turned on and flow, baby, flow!

joEy is not affiliated with any financial institution. There may be research errors, always do your own research. He is not a fiduciary and does not offer individualized guidance. He is not trained in investing. He is Just Joe.

Joseph Malicke