BNN Comments on Fission Speaks VolumesIn answering a question about Denison, Mr Smedley gave the listeners an alternative to Dension at the end of his response.
https://www.bnn.ca/Video/player.aspx?vid=512369
While we can expect to have some volatility until the end of tax-loss selling (Dec 24th in CRA country), the Japan election/restarts, world oil supply volatility & pricing security, etc, could be a positive for the long suffering, "uraniumites".
In doing mine & project planning from 1 day to 50 years plus we would want to fully comprehend the timelines vis a vis the implications of the recent China General Nuclear (CGN) IPO... more specifically ... the production sources (some combination of mine or contracted supplier &/or acquisition & or JV's)...the regulatory hurdles...mine/mill/reactor building & commissioning (aka EPCM).... .i.e. we calculate when we want the first megawat from the reactor and work backwards down the timeline to determine if the CGN is in the right orbit. i.e. when do we secure the first pound to be used to build the first rod of the fuel bundle to be used to produce the first megawatt of CLEAN energy.
RECALL: In March 2011, the global nuclear industry was derailed when a high magnitude undersea earthquake triggered a huge tsunami that directly impacted an aging reactor. Post Dec 14th, Japan plans are to ensure that the restart candidates are able to withstand this unfortunate combination of (magnitude/age/location) circumstances.
Meanwhile, more to the point, we want to look at potential for substution of secure supply... i.e. in a long term contract, a good U-user/buyer may want to cancel a contract and replace their feed with a that of a supplier with a lower net cost per pound. Meaning once we get the regulators (CNSC) to tell us how we are going to mine PLS we compare the all in sustaining cost to all the sources of supply in the global market place. Thus will FCU's grade and secure (political) location make it a good candidate for substituting the production from that of a less secure location?
We can also take this substitution analysis to the potential acquisitors (Cameco, Rio, DML, etc). We all know how Goldcorp calculate their bid pricing. We also know that the Canada foreign investment review agency (FIRA), BurgerKing-TimHortons, not withstanding, will restrict the "foreign component" to (say) less than 33% of any joint venture. This leaves Rio, Cameco & Denison (based on Athabascan home field advantage) as the prime acquirors. Don't forget, we can always look for Cameco to be given a free pass to the front of the FCU line by CRA as the community service component of their tax settlement. LOL. Not to mention CGN will have to go back to the market if they hope to get FCU for the peanuts that they got in their recent Hong Kong IPO. (again LOL).
Anyway, while we ponder the questions and answer(s) to the above, the astute may want to bear in mind that in mining, "grade is always king".
GLTAL-GLAP
Cheers
Stanley