X squared,
I like the PSM story (see 140 page SMF on Sedar) and the pending UEX spin off(voted on January 15) with one free share in UEX for every one PSM share, with UEX throwing in their uranium properties and Cameco (CCO) throwing in their Hidden Bay properties(44,000 hectares) along the eastern edge of the Athabaska Basin into UEX for 40% of the company. UEX should be THE uranium junior explorer as the Hidden Bay lands are centred on the most prolific corridor for hosting uranium deposits in the world. In the immediate area are the mined out Rabbit Lake and Mclean lake deposits. There is an operating mill at Rabbit lake as well which will impact positively on the economics of new discoveries. Other deposits on trend include McArthur River/Key lake and Cigar Lake. Should this deal go forward, UEX will be the best situated junior in the world for uranium exploration, and have the cummulative exploration, drilling and geophysical data base that Cameco and Uranerz have amassed over the last 25 years at a cost of untold hundreds of millions of dollars. It appears that UEX will the THE junior uranium explorer to own, if you want to own one. Also, CCO will step up to the plate on financing to maintain its interest (whether or not this will assist in UEX raising money and at a reasonable share price, remains to be seen). PSM management have been able to keep the company alive exploring so there appears to be the 3 P's here (property, people and phinancing)...
A look at the charts for uranium prices and the chart for the price of CCO is interesting. Uranium peaked at a little over $16.00/lb in April 1996 and CCO traded at over $72.00/share in April 1996.
Charts on CCO and uranium pricing are available at:
cameco.com
Weekly uranium pricing here:
uxc.com
With current uranium consumption at TWO TIMES mine production, when utility inventories are exhausted, the current uranium price of $9.60 will move up sharply. I believe this could happen sooner than later. Recent movements in uranium prices and the share price of CCO, may also suggest the market anticipates this could happen in 2002. If it does, CCO will move up from the current price of $40.00/share and the share price of UEX, with its premier land position in the Athabaska Basin, and as THE uranium exploration junior, will appreciate too. The creation of UEX may well prove to be very timely. |
