Found this interesting information sent out be Bill Ridley of Inner Circle. It should apply to ANU as well as the stock he is promoting.
COUNT DOWN TO THE URANIUM BULL RUN OF 1999
Though many investors will desire to get in on ground floor opportunities, seldom seem to take action until it is too late and
often ignore the obvious.
Many analysts are in agreement that we are on the verge of the next, and perhaps last, major uranium bull run in our lifetime.
Uranium's spot price has been relatively flat this year however market watchers contend that market fundamentals will push the
spot price upward in 1999.
URANIUM AS A FUEL SOURCE
Even the most ardent environmental radicals are beginning to realize the importance of nuclear power. The facts are that it is a
cheap, clean, safe, and an efficient source of energy. Nuclear power supplies about 20% of the world's electricity needs with
about 500 power plants in service today. Over the next few years, an estimated 100 new plants will be coming on line.
Fortunately for the world, these will be in countries which have been horribly polluting the planet with green house gases
spewing from antiquated coal generating stations in third world countries such as China and India.
The heat produced from one pound of uranium is equivalent to the heat produced from burning 3 million pounds of coal or
200,000 gallons of gasoline. As an added benefit, uranium can be used over again several times before it is spent. Now that's
cheap fuel!
THE URANIUM MARKET: A CLASSIC COMMODITY SQUEEZE IN THE MAKING!
Many analysts have been strongly recommending the purchase of uranium based stocks due to the solid market fundamentals
which are pointing to much higher U308 (uranium) prices in the near future.
What we have here is a strong market demand and an insufficient supply which has been depleting inventories at a rapid rate.
The Supply/Demand Picture is Changing Dramatically:
______________________________________________________________
Year*****Total Supply***** Western World***Balance from**** Years of Inventory
**************************** Consumption**** Inventories**************************
-------------------------------------------------------------------------------------------------------------
1996 40,587 63,000 22,413 1.26
1997E 50,379 63,000 12,621 1.06
1998F 55,837 63,000 7,163 .95
2003F 65,000 64,405 595 .84
_______________________________________________________________
It has been estimated that the inventory supply will drop to less than one year over the coming months and stay in a critically
low level until 2003. Consequently, analysts are calling for markedly higher prices to encourage mining expansion in order to
make up this deficiency.
THE SHORT TERM SUPPLY CAN NOT BE INCREASED
Low spot prices for uranium over the last 10 years has discouraged exploration, however, this is already changing as mining
professionals are now gearing up to take advantage of the opportunity. Today's explorations will not meet short term demand.
The new mines which are coming on line over the next three years will take perhaps several years to reach full capacity.
It should be noted that analysts have also considered other sources of supply in their calculations: Russian HEU (Highly
Enriched Uranium), the U.S. Energy Commission's strategic stockpile, and recycling.
URANIUM PRICES
The spot price forecasts for uranium in 1999 differ widely from the reports I have reviewed. Presently the spot price for
uranium is $10.20 and next year's price range estimates are $17.50 to a very bullish $40. This could have a tremendous impact
on the value of junior exploration companys' shares. |
