Most of the inventory is not 'mobile' inventory. As an example,...

Most of the inventory is not 'mobile' inventory. As an example, if a particular Japanese plant has fuel rods which have been constructed with Uranium enriched to 4% U235 and then it comes off line, a US power plant that uses 3.5% U235 can't buy that fuel rod.

No one really knows how much mobile inventory is out there. But we do know that utilities are mandated to keep three years of inventory on hand and not go below that. We do know that worldwide usage is at around 190m lbs/annum and production is at around 130m lbs/annum. We do know that Cameco, the largest western producer, has run down their inventories to a level they are not comfortable going below. We do know that Cameco is fulfilling term contracts by purchasing on the spot market to the tune of 9-11m lbs this year. We do know that Cameco signed a new long term contract for 25m lbs at around $50/lb last quarter and this was not reported to UxC at the request of the buyer. We do know that KProm has reduced output by 20%. We do know that the Chinese, Indians and Saudis have an aggressive program on new reactor builds. We do know that industry estimates of future demand are calculated taking into account planned end of life for power plants and these are routinely being extended. Most recently in France and now likely in the US also. We do know that contracts signed 7-10 years ago are rolling off and the utilities need to recontract lots of material over the next three years.

We do know that prices for spot, conversion, enrichment and UF6 have all increased this month. That is the whole fuel cycle is experiencing tightness. Demand at every level is higher than it has been for some years.

We do know that PDN is targeting $30 AISC after start up. We do know that $80m restart price tag compares favourably with $500m minimum start up cost of a greenfields operation.

Cheers,
Tim.