Greet New to the FCU board and my first stockhouse post in almost 15 years... wow has it been that long since the tech bubble??? Lol I have been in uranium since the bump up in 2007 and continued to read the boards throughout. It seems my path here is a bit different than most since it started with PXP which was taken out by Fission Energy which is now FCU. Along the way picking up FUU and more DML to add to that core holding. My background is in Nuclear Engineering and Nuclear Project Management in Canada. It is time I contributed.
Recent posts have stated that it will take 5 years to start mining the strike. Unfortunately I would suggest it would be closer to 15 -20 year. Using Cigar lake as a reference (I realize the differences in the mines... deep vs shallow) it was founded in 1981, environmental permitting etc was ongoing in 1996, final approval for the mine was 2005 and completion in 2007. Problems with the mine has now pushed it's first full year of production to 2014. Even if everything went on schedule it still would have taken 26 years instead of 35, all of which would have been with the same company at the controls.
Now throw unknowns like the time to sell the company, get permits in an ever increasingly regulated industry, plan a new open pit mine, and somehow figure out how the ore will be milled ( not even going into the costs, permitting, planning, construction, etc to get a mill and by whom???) well I just want to be realistic here, it will take a long time.
So what I am trying to get at, and what I believe factored into Rio's rich takeout valuation of HAT, is the long term valuation a major would put on the price of uranium in 15-20 years. We all know the numbers of new reactor builds either planned or being built around the world vs the estimated future production numbers. So if it is 6, 8 , or 10 dollars/lb it is all relative to one company's outlook. I believe it will eventually be closer to 10.
If anything the downturn in uranium prices since Fukushima, and the modest slowing of exploration, closing of unprofitable mines, termination of the Megatons to Megawatts program, the extensive time required to build a mine, etc all works in our favour. In my opinion the spring is tightening and the majors know it, it is simple supply and demand.
I would like to thank everyone on the board who contributes, the good and the bad, I ignore no one and continually learn from both. I learned long ago how important emotions are in the markets. I have seen all sorts of crazy manipulation, while it might frustrate the short term investor, I know that in time the fundamentals will minimize their relevance. I will wait patiently and hold on for a rich buyout.
GLTA