Ian Wyatt is pitching his “Oppenheimer Project” recommendation, using a webinar that doesn’t readily include a transcript… so although I’m grouchy with him for wasting my time with his long sales pitch, I will at least get you some answers.

Wyatt is using this presentation to sell his Million Dollar Portfolio ($997/year, money-back guarantee on request if he doesn’t provide any 100% gains after one year), which he says is a real money portfolio that currently holds 40 positions… and the bait is his pitch for five “Oppenheimer Project” stocks that he thinks will be big winners, so presumably he owns them all in that portfolio.

So yes, this is another pitch that’s based on the “big idea” that we’re headed into a renaissance for civilian nuclear power around the world, but particularly in the US, and that this is fueled by three basic trends: Surprising increases in electricity demand, due to AI but also the “electrification of everything” trend (EVs, heat pumps, etc.); growing interest in the potentially safer and cheaper small modular reactors (SMRs) again, thanks to a few companies with new designs, and new projects that are on the starting blocks; and a general social and political interest in boosting nuclear power production, largely driven by climate change concerns, which has also led to meaningful US government incentives for new nuclear projects.

Is Wyatt going to offer up shocking surprises that we haven’t talked about before? Probably not, we’ve covered a half dozen different teaser pitches for the “nuclear renaissance” over the past year or two, and there are a limited number of publicly traded companies in this space — most of the ads just recycle the same few ideas.

But let’s not put words in his mouth — what are the five secret stocks he’s touting that come in these “special reports” for new subscribers? We’ll go through them one at a time…

And actually, there are six recommendations in this one — it’s just that the first one is a “freeblie,” Wyatt recommends and owns the largest closed-end fund which holds physical uranium, the Sprott Physical Uranium Trust (U.U.TO in Canada, SRUUF OTC in the US), and since he believes uranium prices will double (or more) from here, he calls this the “simple Oppenheimer Project trade for 2024”.

There isn’t a huge “spot” market for uranium, it’s generally sold to utilities and fuel processors on long-term contracts — and that long-term prices has continued to trend slowly upward, according to Cameco (the biggest North American miner), but the shorter-term “spot” price or “on demand” price that tracks monthly fluctuations is more volatile, and soared to $100 in January but has dipped back down below $80 as of August, so the “spot” and “long term” prices are roughly the same now. Here’s the five-year pricing chart from Cameco, just to show that yes, we’ve been in an upturn for a while, after declining for ~7 years after the Fukushima disaster… but the spot price enthusiasm is not as dramatic as it was in late 2023 when the “nukes for AI” story was just starting to really heat up.

And yes, the Sprott Physical Uranium Trust has been the cleanest way to match that rise in the spot price of uranium — so that will probably continue. This is SRUUF charted against a slightly different source for the monthly uranium spot price, though it’s pretty consistent with Cameco’s numbers:

That will probably continue — at the moment, Sprott says the fund is trading at about a 12% discount to the value of its uranium in storage. Like most closed-end funds, it usually trades at a discount… but sometimes overshoots and drifts up to a premium at times when the commodity is particularly sexy. With spot prices coming down in recent months, it probably shouldn’t be a surprise that the fund is underperforming the commodity price over the past year… though it’s fairly close, and there isn’t a better publicly traded way to get direct uranium exposure, so it’s a reasonable baseline idea for investing if you believe uranium prices will rise during this expected nuclear renaissance.

So now, what are the “secret” picks he hints at?

The first one he calls “America’s #1 Uranium Stock”, and he thinks it’s set to soar 313%… here’s a screenshot from the presentation…

He says they’re just about to restart their production from uranium mines in Wyoming in August, which will bring in 2.5 million pounds of new supply, and also in Texas, where they have another 4.5 million pounds of capacity. And he says all of this could produce $585 million in sales, from projects that already exist and are fully permitted and approved.

He also says that the Wyoming location is just 250 miles from Kemmerer, which is where the new SMR project from Bill Gates’ TerraPower is being built… and that the company has $300 million in cash and a market cap of only about $3 billion, and also holds some uranium itself, worth about $100 million… and they’re going to be tied in with the government incentives to produce uranium in the US, with a DoE order to buy 300,000 pounds at a 20% premium price (perhaps partly, he implies, because the company is well-connected, run by a former head of the Department of Energy).

And he says the stock is currently available at less than $10, and could rise 313% or more.

So… hoodat? This is our old friend Uranium Energy Corp (UEC)… summed up pretty well with this slide from their latest investor presentation:

UEC has primarily been buying up old uranium fields over the past decade or so, without actually doing anything — but they did indeed start up some production in Texas and Wyoming recently, and did acquire Uranium One to boost their production capacity further. This is primarily an ISR company, not a conventional miner, so it’s a little more like oil production — they pump water and/or chemicals into a field where there’s uranium suspended in sandstone, that fluid picks up some of the uranium, and then they pump it back up to the surface to be refined.

The stock has been on a good run over the past five years, and got overheated during the mania a year ago, but has also come down a bit since Wyatt’s data was collected — it’s around a $2 billion valuation at about $5 this week, so it has mostly also followed the spot price of uranium recently…

UEC comes up pretty regularly in uranium teases, and has been a favorite of folks like Marin Katusa and the late Kent Moors in the past. I don’t trust the company at all, mostly because of their highly promotional behavior (just writing about the stock got me embroiled in an attempted class action lawsuit a decade ago, so I’m probably extra-biased against UEC), but it has certainly been built to stockpile a bunch of US uranium assets and profit from an eventual surge in uranium prices, so it might work out well from here. I won’t be involved, but you can make your own call on that.

Next?

The second secret stock is teased as a new IPO from ChatGPT founder Sam Altman… here’s the screenshot:

This one isn’t much of a surprise — Wyatt repeats Sam Altman’s prediction that the future of AI depends on energy breakthroughs, and this is a little small modular reactor company that Altman invested in about a decade ago.

He also says they’re building “small Oppenheimer projects” that are attractive and fit into the environment, with projects underway in Ohio and Idaho, a deal with the US Air Force for a plant in Alaska, and another deal with a big oil and gas company in Texas. It plans to own and operate its reactors and sell electricity… and part of the excitement is that they can use recycled fuel from conventional nuclear reactors.

Wyatt also notes that they went public and raised over $300 million, plan to launch first project within next 3-5 years, you can buy for right around $10. He thinks the stock will jump 350% by the time they reach their first milestone — so presumably 3-5 years from now.

And what’s the stock? This is, of course, Oklo (OKLO), the big SMR SPAC IPO from earlier this year (the deal was completed in May). They sell the idea pretty well in their quarterly investor letters (latest one here), and they still say that they expect to deploy their first “powerhouse” (that’s what they call their SMR facilities) by 2027.

I have no idea how they think they’ll reach that 2027 date, which is currently the most ambitious promise among the US SMR projects — they haven’t even reapplied for a license yet, after having their first license application denied in 2022, and seem to be putting a lot of weight on the idea that they will benefit from a streamlined combined construction/operating permit application process which will cut the timeline in half…

I’m skeptical that this first attempt at a combined license will be anywhere near as fast as they hope, but that would still put potential license approval somewhere between the end of 2026 and the end of 2027, which doesn’t leave much time for construction.

Maybe they’ll be shockingly fast, we’ll see, it’s possible that some disruptor will emerge that delights the Nuclear Regulatory Commission, and that this disruptive new technology will be quickly approved thanks to the pressure on the NRC to streamline their review process… but this is one of the most independent and safety-conscious bureaucracies you can possibly imagine, for good reason, so counting on an application being submitted this year being approved in time to build a reactor by 2027 seems, well, irrationally optimistic. At least to me.

Oklo is proposing to build a fast fission liquid sodium reactor, not a water-cooled reactor — and there are some operating reactors using that basic technology around the world, particularly in Russia, along with the test reactors that have run for a long time at Argonne National Laboratory, but most of the commercial reactors in the world, and all of them in the US, are water-cooled, so this is a brand new reactor design for the NRC to approve. It may well be much better and safer than water-cooled reactors… but that doesn’t necessarily mean it will be fast or easy to license and build.

TerraPower is planning a fast fission reactor using liquid sodium, too, by the way, and there are others — and interestingly enough, TerraPower is the only one to have used this “Combined License” process with the NRC so far. They submitted an initial construction permit application to the NRC, which launches the review of project safety and the environment impact of the reactor, and they expect those final evaluations to take about 26 months, after which there would be a hearing and a potential construction permit decision, presumably sometime after the scheduled final evaluations being issued in August of 2026. So that’s similar to the timeline talked up by Oklo… but with that, TerraPower has already begun the initial construction site prep work, (none of the actual reactor work), and TerraPower’s only prediction about the timeline at this point is that they “could begin operations by 2030.”

Of course, TerraPower is not publicly traded, and Bill Gates has deep pockets and good partners, so they don’t have to overpromise to keep investors excited.

I like Oklo’s idea, and hope it works out, but I’ll take the “over” on a 2027 launch. I’d even give you pretty good odds against a 2030 commercial launch, but that’s at least much more feasible — 2029-2030 seems to be the timeframe most of the new SMR projects around the country have in mind as a fairly optimistic “start operations” date. Oklo has made a lot of progress on potential power supply deals, they do have non-binding power purchase agreements with a big data center in Wyoming, and with Diamondback Energy in Texas, so those are possible deals which could be firmed up as construction seems more likely, and which might make the funding of these projects more feasible (along with all the government incentives rolling through to push for more new reactor construction), but it’s still hard to imagine any new reactor being fast or cheap to build in this first wave.

Hopefully that will be the case eventually, once a few companies get a few reactors built we should have more of a regulatory blueprint, and some financing structures in place, and a supply chain of parts and fuel suppliers ready to streamline the process for the new modular reactor designs, getting to the point where we really can build the components in a factory, truck them to the site, and get a reactor built in just a year or two… that’s the promise of SMRs. But that’s not likely to be how it goes for the first few test projects.

What will all that mean for the stock? Well, it probably mostly depends on what regulatory progress looks like, whether they get more government incentives, and how excited investors get about the 5+ year opportunity. They said in their initial SPAC presentations, a little over a year ago, that this first 15MW plant would have capital costs of $107 million, so they probably have enough cash to get that going (about $235 million now, with an outlook that they will use $40 million this year), but if they want to try to scale up with other projects before that first plant is built, they’ll need to raise a bunch more money — not necessarily from selling stock, though that’s possible (they could borrow some, and they might get government grants or loans as the nuclear incentives begin to become available). I wish them the best, but with the uncertainty of the licensing and construction process this is too speculative for me, with revenue and profits still way too hypothetical, and too far into the future.

And just FYI, Wyatt does imply, as other newsletters have claimed in the past, that the US Air Force has ordered a SMR from Oklo for a base in Alaska, also planned to be built by 2027. That was briefly true, about a year ago, but after a competitor complained about the lack of competition in that bid the order was rescinded last November, and procurement for that potential project remains “on hold” at this point.

Moving on to number three…

Ian Wyatt shows a picture of this company’s nondescript headquarters near DC, and an overhead view of its plant in Ohio, and pitches the company as the monopoly provider of fuel for these “Oppenheimer Projects” — here are some screenshots:

He says that major utilities have already signed agreeemnts for more than $1 billion of enriched uranium, they’ll have sales of more than $300 million this year, and that they’ve locked in low uranium costs, with cash profit margins over 30%.

And, most importantly, that they’ve been awarded the only license to enrich uranium for these Oppenheimer Project facilities, giving them a monopoly, because of ban on Russian imports, and meaning that most of the pending projects (including TerraPower and Oklo, incidentally) have signed fuel purchase agreements with this firm… he says the stock could “easily double or triple as the name becomes well known.”

Hoodat? This is Centrus Energy (LEU), which is indeed a prominent refiner of uranium, though they’ve actually benefitted more from importing Russian uranium over the years than they will from the block of future Russian imports, at least in the near term.

Centrus has been pitched a few times, including by Adam O’Dell back in May and by Alex Koyfman in June.

The business of uranium refining, and the various different types of uranium fuels, is complex and tends to make me long-winded, so you can check out that June article for a lot more detail… but here’s the short version I shared with the Irregulars at the time:

Many of the SMR projects (far from all, but many) use HALEU fuel, a more enriched form of uranium, and Centrus is currently operating its demonstration project for HALEU production, the only one in the US, and could ramp that up to much larger scale over the next 3-4 years, if they get the money to do it. That could come from ambitious SMR projects who have capital to commit to 2030-2040 fuel requirements right now, or from potential government funding from new nuclear spending. So there is potential for meaningful growth in several years, but it might be very choppy… and there’s also a looming threat from the new block on Russian enriched uranium, since Centrus is a major buyer of that uranium for their conventional nuclear plant customers right now and would probably need a government waiver to keep those imports coming for a few years and avoid a substantial revenue cut. I like the idea of investing in the potential fuel supplier, but there’s still high uncertainty here and probably a long wait for their potential new SMR customer base to develop, and I don’t have a great handle on how large that Russia risk is for Centrus, so I’ll avoid it for now. The catalysts I’d watch are government contract awards (probably not all that soon), and potential waivers for that Russian enriched uranium ban (which goes into effect soon, this Summer).

LEU did get that waiver, so their imports of uranium from Russia can continue through 2025… though Russia, of course, could also always block them on their end, and there’s some more bluster about Putin “capping” uranium exports this week. So that maybe de-risks the story by a little bit, though the share price is still about where it was back in June when I wrote those words, and the story hasn’t otherwise changed in any real way.

There aren’t a lot of analysts covering LEU, but they expect the company to have adjusted earnings of about $2.80 this year, and in each of the next couple years, so at about $40 per share you’re paying about 14X earnings for probably not a lot of near-term growth… but possibly a larger business five or ten years from now, if their early stage HALEU refining grows and we end up with a lot of new reactors being built that need more fuel.

Number four is another SMR hopeful… here’s the screenshot:

So this is the first company to have new SMR design plans approved by the US government, and Wyatt says “no other company has even applied yet.” (Sort of true, since Terrapower’s application is not really for the reactor design just yet). And he says they have more than 600 patents, and that the government has already invested $283 million to support development, with more tax benefits coming.

And he says that a data center customer wants them to build SMRs in Ohio and Pennsylvania… but that this company has only a $500 million market cap at about $5 a share, despite $1.8 billion already being invested in their projects, and could go up 867% by the time their first project comes online.

This one has had a wild ride over the past year, first as their initial project was cancelled in late 2023 and then as new projects were talked up and the hype cycle got roiled earlier this year…

So yes, here Wyatt is pitching NuScale (SMR), which was the first SPAC deal in the nuclear space, and was the only pure play SMR stock before Oklo came along.

Here’s the short version of my take on SMR the last time I looked at it, back in May (for that same Adam O’Dell pitch):

NuScale (SMR), which has a more conventional light water SMR design that’s already approved by the NRC, and might theoretically be able to get project approval before Oklo if a new customer commits (SMR says their first project will be operational in 2029, and also implies that will be the first one in the U.S.). SMR got clobbered because their first customer, a group of Western utilities, pulled out of their project in Utah because the cost got too high to make sense, but they do have a commercialization partner and some planned projects that they think could get built and be in production by 2029, and they have partners ready to build the components (and started building some of them last year, before their original project was canceled)… but there’s some real disagreement about how long this timeline might be to actual construction , and how much dilution or outside funding might have to happen along the way. I’ll watch from afar… somewhat safer and more diversified companies that are also trying to build small reactors might be Rolls Royce (RR.L, RYCEY, RYCEF) or BWX Technologies (BWXT), we’ve covered those in the past, but they won’t be as sexy.

NuScale did get design approval for their light water SMR, so in that way they are ahead — though that was before the accelerated combined approval process was launched, so who knows if they’ll remain ahead, since any individual project they want to do still has to get construction permits and NRC approvals (as well as local approval, usually). They say they are the only “near-term deployable” solution now, leaning on that approved reactor design, and government incentives and grants might help them to be among the first SMRs to get operational, particularly if they build on the site of an existing coal power plant (like TerraPower is doing)… and they did pre-order some of the reactor components when they thought their initial project would move forward, so they are sort of ready to get started, though there isn’t really funding or site selection for their first project just yet (ENTRA1 Energy and Standard Power announced last year that they chose NuScale’s technology for their SMR project that will provide electricity for data centers in PA and OH, with plans at that time to be operational by 2029, but I haven’t heard anything more about those projects moving forward so far in 2024).

They do have one project that’s actively being worked on, as far as I can tell, Fluor (FLR) is currently doing the front-end engineering and design work for a SMR plant in Doicesti, Romania (six SMRs on one campus), and they should get some revenue from their participation in that work, but I don’t know what the development timeline looks like (Fluor, a global engineering and construction firm, is the controlling shareholder of NuScale, and provides most of NuScale’s revenue at this point — presumably in hopes that they’ll help drive a lot of nuclear plant development work for Fluor in the future). I’d feel much safer owning Fluor than NuScale, frankly, but either way it will be an interesting ride over the next five years as we begin to see these SMR projects actually get built, and begin, hopefully, to scale up production of a lot more small modular reactors once it becomes clear which designs are safe, effective and efficient in the real world.

But wait, there’s more! This fifth pick is another miner:

So, no surprise, this is another company that has discovered uranium reserves in Northern Saskatchewan, near the industry-leading mines operated by Cameco (and near lots of other smaller projects, and exploration hopefuls).

The clues are that this company has 700,000 acres, with the largest proven reserves of over 100 million pounds of uranium… and maybe 150 million more than that, and that the deposit could have a total value of more than $20 billion, but it’s available at less than a $2 billion market cap (and near $2 per share).

Plus, Wyatt says this company also owns stake in an existing mine, which was shut down when uranium prices were low — but is restarting next year, so that could provide some revenue fairly soon. And he says the company has no debt and $100 million in cash, with an inventory of uranium worth more than $200 million.

Who, you ask?   Must be Denison Mines (DNN), which is one of the few uranium hopefuls (other than industry leader Cameco) that started out as a junior in the 1990s, thrived through the uranium boom years (2000-2007, and that brief spurt in 2010-2011), and survived to try to ride this latest “nuclear renaissance.”  They kept chugging along through the years of almost zero revenue, even after having some of their mines played out or closed down, during the years when prices were less than half of what anyone needed to build a new mine, when exploration interest was non-existent, and they never quite went bankrupt, never got acquired by a larger company.  And they’re benefitting from this latest boom, since their market cap has finally gotten back to where it was in 2007, though they haven’t yet really gotten their revenue going again yet (and the share price, of course, is far below where it was in 2007 — since they had to dilute shareholders by selling a lot of stock to survive the last decade).

There is some near-term hope, though, in the restart of the Mclean Lake Mine and Mill next year — Denison owns 22.5% of that project, which is operated and majority owned by the French government-controlled nuclear industry titan Orano (formerly known as Areva), and the two have agreed to restart operations in 2025.  Beyond that, Denison owns a very large project that they hope to develop, Wheeler River, and they completed a feasibility study last year which contemplates breaking that up to begin by developing just one of the deposits within Wheeler River as an ISR project (in situ recovery — the fluid-based mining method we mentioned with UEC, above), instead of as a conventional underground hard rock mine.  They think that project, Phoenix ISR, has a $1.5 billion net present value, and could be built in two years and producing by 2027 or 2028, so that’s where most of the near-term value of Denison probably sits right now, though they do also have other prospects, including, yes, well over 700 thousand acres (closer to a million acres) of “exploration ground” — and they think they already have enough capital, thanks in part to the uranium they’re holding in storage, to get the Phoenix project built without any additional funding .

Interesting story, kind of a combination of long-term exploration potential and one decent-sized project that could probably be built in time for whatever the next wave of new reactors might need in the 2030s.   They’re not likely to be profitable anytime soon, but they are relatively large and established, and are obviously a survivor, with some high-profile projects, and they could be nicely levered to higher uranium prices over the next five years.  Assuming, of course, that uranium prices stay elevated.

So those are Ian Wyatt’s five “secret” picks for this next wave of nuclear power projects… nothing new or shocking in that group, but he’s got the leading pure-play nuclear fuel company  (LEU), both of the pure-play SMR companies that have gone public so far (though there are dozens of others which are not public, including Terrapower and lots of other projects, so we shouldn’t fall into the trap of assuming that the two public companies, OKLO and SMR, are the only companies competing in this early “renaissance”), and two “large juniors” in the uranium mining space in UEC and DNN, both of which should see a little revenue soon and have some potential to be levered to uranium if price stay strong and their other projects ramp up to production over the next five years.

Are those the ones you would pick?  That scattershot approach is pretty similar to what a lot of pundits have recommended — though many of them also throw in a couple operating utilities who own nuclear power plants, too (like Constellation (CEG), Vistra (VST), Duke Energy (DUK) or others — I own some VST), since that provides some stability, and potentially some of the engineering, contracting or construction firms who should grow if we build more reactors (like Fluor (FLR) and Honeywell (HON), among the more diversified firms, or BWX Technologies (BWXT) among the more nuclear-focused — I own BWXT, personally)… and some prefer the big nuclear companies who have some SMR exposure over the little guys who are essentially SMR pure-play startups, so that might suggest established nuclear players like Rolls-Royce (RR.L, RYCEY),  Hitachi (HTHIY) or Mitsubishi Heavy Industries (MHVIY), Westinghouse (owned by Brookfield funds), or GE Vernova (GEV).

And among the uranium plays, the Sprott Physical Uranium Trust is usually a pretty popular “basic” option for uranium exposure, and several newsletters have settled with the industry leader Cameco (CCJ) as the easiest mining play for uranium, given their large established mines and expansion potential… but it’s not unusual to see junior uranium explorers or some of the smaller miners, like Denison, NexGen Energy (NXE.TO, NXGEF) or Energy Fuels (UUUU), pitched as well.

There are also several nuclear power ETFs that provide exposure to a lot of these themes, the most established are the VanEck Uranium & Nuclear ETF (NLR), which has the broadest portfolio of both uranium producers and nuclear energy businesses, and the more uranium-focused Global X Uranium ETF (URA), but there are also some little startup ETFs like Range Nuclear Renaissance ETF (NUKZ), and at least one other uranium miner-focused ETF, Sprott Uranium Miners (URNM).

Disclosure:  Of the companies mentioned above, I own shares of BWX Technologies (BWXT), Vistra (VST), and Brookfield Asset Management (BAM) and Brookfield Corp (BN).  I will not trade in any covered stock for at least three days after publication, per Stock Gumshoe’s trading rules.