GCL Geiger Counter Limited

Geiger Counter Limited Plc 

Monthly Investor Report - 24^th February 2025

( All Factsheet data is at 31 January 2025)

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 (Uranium) spot price closed January 2.4% lower at $71.15/lb with two factors coinciding to weigh on the uranium mining sector. Firstly, Kazatomprom's Q4'24 operational update showed stronger production following an earlier-than-expected restart of its Inkai operation. This helped to lift the group's final quarter output to 6.5ktU/16.9Mlbs U3O8 (on a 100% basis), around 1ktU/2.6Mlbs higher than estimated. Notably however, Kazatomprom's full year 2025 production guidance remained unchanged at 25.0-26.5ktU (on a 100%, equivalent to 65.0-68.9Mlb U3O8). Secondly, sentiment towards the sector reacted negatively to news of China's Deepseek Artificial Intelligence (AI) developments. This led investors to question the pace of US AI datacentre roll out and a reassessment of the potential pick-up in electricity demand for the seemingly faster learning, less energy intensive and lower cost technology.

Following the news, uranium mining equities, which had started the year well, dropped sharply and the Company's positive gain of 17% prior to the announcement was largely unwound with the NAV closing the month with a 3% gain. This compared to 2.6% sterling return registered by the Solactive Uranium Pure Play Index. In a further example of the price volatility in the sector, utility Constellation, which provides baseload nuclear power - and now also gas power - that recently signed an agreement to supply Microsoft with power generated from Three Mile Island, ended the month 34% higher.

Despite a negative shift in AI sentiment and equity price volatility, we believe the outlook for reactor fuel demand remains unchanged, underpinned by significant growth from ongoing reactor builds in China. In addition, other important nuclear markets also continue to move forwards on restarting capacity. Since January month-end, encouraging developments in Japan have been announced. In a draft strategic energy plan, due for cabinet approval later in February, the Trade and Industry Ministry indicated that it was seeking to renew the country's focus on nuclear power, rather than de-emphasise it.

Specifically the draft bill no longer references a "reducing reliance" on nuclear energy, that had appeared in the three previous plans, with the language changed to a "maximisation" of nuclear power. Nuclear will account for about 20% of total energy output in 2040, based on the assumption that 30 reactors in the country are expected to be in full operation by then.

Despite this recent softness in the spot U3O8 price, it is also noteworthy that conversion and enrichment prices remain at highs that we believe is indicative of the robust long-term outlook for the sector. Following the decline in U3O8 prices it is becoming more economic to feed more U3O8 into the downstream processing, "overfeeding". Encouragingly, and consistent with this, a market update by consultant UxC indicated during the month that "additional U3O8 demand interest is emerging", including from utilities at below US$70/lb.

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.