It appears that we have reached a point in the uranium market where producers themselves are investing in physical uranium funds. Yesterday, Kazatomprom (LSE: KAP), the largest producer of uranium globally, announced that it will be taking a 48.5% stake in a new physical uranium fund to be listed with the Astana International Financial Centre in Kazakhstan.
The arrangement will see the establishment of Anu Energy OEIC Ltd, which will hold physical uranium for investment purposes, similar to the Sprott Physical Uranium Trust (TSX: SPUT) in Canada. The fund is to be operated by Genchi Global Limited.
The fund will have an initial US$50 million in starting capital, 48.5% of which will be financed by Kazatomprom. An equal 48.5% stake in the initial round will meanwhile be taken by National Investment Corporation of the National Bank of Kazakhstan. Once operational, a second round of financing will be conducted via a public or private offering, under which capital of up to US$500 million is expected to be raised.
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All funds raised are expected to be utilized for physical uranium purchases, with ANU Energy set to be managed by its own board of directors.
The second round, once complete, will make the fund one of the largest physical uranium-focused funds globally, with it believed to be second only to the Sprott Physical Uranium Trust, and the first within emerging markets. As per Kazatomprom, the fund has reportedly been under development for approximately four years.
“The Fund will leverage the combination of Kazatomprom’s expertise in the uranium market and NIC’s proven track record, with the AIFC offering investors direct exposure to the attractive opportunity presented by the long-term fundamentals of the uranium market and nuclear industry,” commented Kazatomprom CEO Mazhit Sharipov.
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