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Gold/Mining/Energy : WWS.T World Wide Minerals -- Ignore unavailable to you. Want to Upgrade?

To: tango who wrote (406)	4/16/1998 9:39:00 AM
From: traacs	Read Replies (1) \| Respond to of 784

worldwideminerals.com As of April 13, 1998 The restricted market spot market price for uranium bottomed out at around $10.50 per pound of U3O8 in the first months of 1998. However, an incremental price strengthening has been noted over the last few weeks. Since the beginning of the year, there has been lower than normal spot-market and long-term contract activity. Recent uncertainties over the disposition and price of Russian HEU feed have caused the spot market price of uranium to fall as utilities hesitated to purchase uranium, believing that more than adequate supplies were available. While this is generally true in the short term, the total supply demand statistics continue to show a substantial deficit of all supplies to meet future demand. Utilities must, necessarily, resume long-term contracting in substantial volume. Generally long-term contracting activity takes place two years ahead of actual requirements. Utilities will buy in the spot market and postpone long-term contracting if they believe the market price is not going to increase. At this time, because of the demand-supply fundamentals (an increase in the volume of unfilled demand that needs to be purchased and the limited volume of uranium available at today's low prices), we believe the price will be pushed up by increased demand during 1998. At the same time, with this increase in uranium spot prices, the utilities will try to secure more long term contracts to take advantage of these prices before the price rises too much. However, uranium producers are not bidding substantial quantities at anywhere near the current spot market price. We expect to get and have been averaging about $2 per pound more than the spot market price at the time of contracting. In addition, there are many utilities that negotiate long-term supply agreements with reliable suppliers to achieve diversity of supply without resorting to competitive bidding. WWS has obtained several contracts this way. We expect substantial volume of long-term contracts over the next two years and have discussed this possibility with European, Asian and US Utilities. These contracts are expected to be at prices of $16 or above. Current analyst reports by various brokerage houses support this opinion - in some cases forecasting prices of $18 or more in 1999. Because of our view for the future direction of uranium prices, we have not been very aggressive in our marketing since we want the more desperate suppliers to get the lower price contracts as the price starts to move up We have an advantage in securing long-term contracts because utilities want to encourage development of another reliable large supplier to increase the diversity of supply. Uranium production has become concentrated in too few companies, many of whom are partners in the same projects.