GCL Geiger Counter Limited

Geiger Counter Limited Plc 

Monthly Investor Report - 18^th December 2024

( All Factsheet data is at 29 November 2024)

The full monthly factsheet is now available on the Company's website and a summary can be found below. 

NCIM - Geiger Counter Ltd - Fund Page for Geiger Counter Ltd

Enquiries: 

For the Investment Manager 

CQS (UK) LLP 

Craig Cleland 

0207 201 5368 

For the Company Secretary and Administrator 

R&H Fund Services (Jersey) Limited

Jane De Barros/Katie De La Cour

01534 825259/01534 825337 

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Fund Description 

The objective of Geiger Counter Limited is to provide investors with the potential for capital growth through investment primarily in the securities of companies involved in the exploration, development and production of energy, predominantly within the uranium industry. Up to 30% of the value of the Company's investment portfolio may be invested in other resource-related companies from outside the energy sector.

Portfolio Managers 

Keith Watson and Robert Crayfourd 

Key Advantages for the Investor 

·      Access to mining assets in the uranium sector

·      May benefit from embedded subscription share

·      Low correlation to major asset classes

Key Fund Facts¹ 

Ordinary Share and NAV Performance² 

Commentary³ 

 The U3O8 price ended the month 3.4% lower, at $77/lb. Despite the lower commodity price, related mining equities maintained their positive momentum, and the Company NAV gained 6.9% over the month. This is comparable with the 6.1% sterling return of the Solactive Pure Play Uranium Index.

Geopolitical risks have also returned to the forefront and, at the time of writing, have materially intensified: in response to changes in US legislation aimed at phasing out the imports of Russian-sourced fuel by 2027, and linked to Ukraine's use of US arms against Russia, Russia has taken retaliatory action, implementing a ban on fuel exports to the US in November.

Against this backdrop, the Trump administration team in the US will likely support nuclear power and uranium mining. Elon Musk is vocally pro-nuclear, and the new Energy Secretary, Chris Wright, also sits on the board of Oklo, a US SMR (Small Modular Reactor) start-up. This should support further reactor life extensions and the advancement of SMRs in the region.

Meanwhile, China signed a large U3O8 offtake agreement with Kazatomprom, further exacerbating the bifurcated market pricing between Western utilities and Russian/Chinese-controlled uranium supply, conversion, and enrichment.

 Recent events highlight that the security of supply has become of strategic importance, with both Russia and China now having considerable influence on the supply chain and stockpiles, just as rhetoric on trade wars builds ahead of Trump's January inauguration. With US utility nuclear fuel inventories believed to be relatively low, such a move may hasten a return to contracting. However, we believe utilities are increasingly motivated to deal directly with mining companies rather than undertake on-market transactions, and as a result, it may be increasingly necessary to look through visible U3O8 price information to determine the extent of utility activity and relevant contract terms.

The events should be supportive of the Company's uranium mining exposure, which is predominantly North American. Notably, the Company's largest position, Nexgen, received environmental permitting approval ahead of expected final Federal permit approvals in early 2025. The news helped lift the Nexgen share price around 17% in sterling terms over the month, slightly outpacing Cameco, which also sustained its positive share price momentum, and Nexgen represented the largest contribution to Company performance during November.

Paladin, amid its all-share offer for Fission Energy, announced that the ramp-up of its restarting Langer Heinrich operations was progressing more slowly than expected and lowered 2025 production guidance from between 4-4.5Mlbs to between 3-3.6Mlbs U3O8 and as yet has not provided production estimates for 2026. In addition, Canadian authorities subsequently indicated that they had extended their considerations on whether to allow the deal to proceed for 45 days, with an update expected by 30 December. Despite indications that mitigating actions had been taken to address some grade variability and lower throughput, and that operations should be cash flow positive in December, the news weighed on the share prices of both Paladin, which ended the month down around 25% and to a lesser extent on Fission, which closed the month around 10% lower. These were the prime drags to performance over the month.

The Company purchased some shares in Fission after the initial sharp sell-off which had seen the shares fall nearly 25%, in line with Paladin, taking the view that the standalone valuation of Fission's Patterson Lake project could justify this. The Company's position in UEC was reduced following the strong recent performance, with the shares latterly gaining 12% in November.

CQS (UK) LLP

4th Floor, One Strand, London WC2N 5HR, United Kingdom

T: +44 (0) 20 7201 6900 | F: +44 (0) 20 7201 1200

CQS (US), LLC

152 West 57th Street, 40th Floor, New York, NY 10019, US

T: +1 212 259 2900 | F: +1 212 259 2699

Tavistock Communications

18 St. Swithin's Lane, London EC4N 8AD

T: +44 20 7920 3150 | geigercounter@tavistock.co.uk

Sources: ¹R&H Fund Services (Jersey) Limited, as at the last business day of the month indicated at the top of this report. ²R&H Fund Services Limited/DataStream, as at the last business day of the month indicated at the top of this report, total return performance net of fees and expenses based on bid prices. These include historic returns and past performance is not a reliable indicator of future results. The value of investments can go down as well as up. Please read the important legal notice at the end of this document. ³Market data sourced from Bloomberg unless otherwise stated. The Fund may since have exited some or all of the positions detailed in the commentary. ⁴ BMO, UxC, Company data September 2023. ⁵ www.eia.gov. ⁶CQS, as at the last business day of the month indicated at the top of this report. For methodology details see Article 4(3) of Directive 2011/61/EU (AIFMD) and Articles 6, 7, 9 and 10 of Delegated Regulation 231/2013. ⁷CQS, as at the last business day of the month indicated at the top of this report. For methodology details see Article 4(3) of Directive 2011/61/EU (AIFMD) and Articles 6, 8, 9, 10 and 11 of Delegated Regulation 231/2013.