The above ground inventory is the main issue with regards to
uranium. I believe that the CIS material is coming in at about
15-18 million lbs production per year, with 5-10 million pounds from reprocessing, and another 20 million pounds provided by conversion of weapons-grade uranium to commercial use. Production continue to
vastly undershoot built-in demand by 50-60 million lbs per year as
far as the eye can see.
Brien Lundin wrote up SMR as a buy, for the Gold Newsletter, June 1999. I don't know when this went out, but it appears that SMR
has been trading a lot more shares within the past several weeks.
He expects uranium to move up also, within the next year or so. As
has been pointed out before, the Utilities need to stay 18 mos
ahead in their stockpiles, to assure that they will have the material
when they need it. Lundin implies that the above ground supplies
are about to get to a critical, 18 month level, within the next year
or so. Consequently, more material will be bought at spot, and
the price should easily climb 50 -100 %. SMR, among other stocks
in this small group of stocks, should appreciate 5 to 10 fold from
these levels, according to Lundin.
I agree with the scenario, and have USEG and SMR as long term holdings. As always, though, Cameco will be the one to watch for
clues as to the future of the sector.
Regards
Dan
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