Thursday, October 26, 2006

Cameco's Disaster Fuels Uranium Boom (Part 3)

Yesterday, Neal Froneman, president and CEO, sxr Uranium One was on RoBTV educating the general masses about the impact of Cameco's Cigar Lake disaster. Let’s first take a look at what he says..

(Uranium) price rise driven by constraints of supply. One of the best miners have very significant problems. Lots of new producers with very aggressive targets. We're very much on track, probably a quarter ahead in terms of commissioning. We have held off entering into any forms of sales contract. Clearly as demand as robust as it is and the disruption at Cigar Lake, nice time to negotiate. In 6-18 months we expect to exit out of gold vehicle to become focused uranium company. Before incident at Cigar Lake, I said we would say before the end of the year $60 and $70 by the end of next year. I daresay now $65 by the end of the year, long-term require at least $55-60 for industry to come into supply-demand balance..I think there's a window of opportunity for new producers like ourselves where supply-demand not in balance..that window probably 5-10 years..if you’re a new uranium company, need to establish in that time frame.

Personally I agree with what Mr. Froneman is saying. The long-term uranium stocks worth holding on to are the ones who have feasible assets that can be produced within 5-10 years, preferably closer to 5. Because, who here really can predict beyond these five years anyway? There are too many variables here at play and I'm much more comfortable investing for the here and now, with an eye on the next few years to come.

Others, of course, like to make money in the absolute here and now. Certainly, every uranium stock has received a bounce as we enter day 3 post-Cameco meltdown. Major mid-tiers reversed course today in trading as profits were taken. Some of the smaller uranium microcaps, meanwhile, ascended double-digits; many of these small exploration plays have been languishing for months in their 52-week lows. Fast money can definitely be made, but only if you are willing to take on substantial risk as double digits in the opposite direction can happen just as quickly.

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2 Comments:

Blogger Chunky Hunky said...

Great article,it has boosted all uranium firms. The news seems to have caused my Austrailian holdings to soar,like ERA,Summit,and Deep Yellow. There is awhole lot going on 'Down Under' By the way,Uranium guru, James Dines, is going to be on The Nightly Business Report on PBS TV. Ourlocal PBS stations are #45,#49,and#25, check him out I find him to be very interesting and well informed. Chunky Hunky

9:31 PM  
Blogger Chunky Hunky said...

Opps! I forgot to tell when Public Broadcast System [PBS]is goimg to air Mr.Dines's uranium commentary. It will air Friday Nov.3 2006. In northeast Ohio on stations #45 and #49 Nightly Business Report airs at 6:30 PM and midnight. O PBS station #25 the program is on at 7:00 PM. It was Mr. Dines's commentary that has alerted me to the uranium industry and current demand. I did subscribe to his publication and could not be more pleased. I began my investments in uranium mining stocks at the beginning of the year,and they have grown nicely with the guidance of The Dines Letters of Belvedere,Ca. Along with this blog as another vital resource, I have learned much about a multitude of supporting subjects. Thanks, The Chunky Hunky!!!!!

11:17 AM  

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