the big drums are starting up for smm, page-4

If mining were allowed, then

1. The Mt Isa deposits can be served by *one* production plant.

2. There will be a premium for *size*.

3. And a premium for location in Australia, The more the U price rises, the more appetite for additional profits some African nations could be wanting, given time.

4. Being in Australia means that the SMM's CEO has more aces in his hand to be used in negotiations with a a U hungry world.

5. Sofar the pressure from Russia re Energy control is relentless, this, and the increasing or even flattening demand from other fast growing countries make more nuclear reactors unavoidable.

6. Some countries may well purposely understate the number of reactors needed so as not to push up the U price too much. That would apply to China in particular. Rest assured that any list with planned reactors will be obsolete when issued.

7. The modern contracts are different from those signed years ago; that virtually means that a much greater part will be sold at much higher prices in a rising market.

8. Obviously, a seller is in the driver seat: he only has to wait while contract terms are becoming more enticing. It is not just a matter of selling U, but more important to obtain it first.

The seller still has to replace that quantity sold so he can sell more. Be assured that producers are not in a big hurry to sell apart from fixed contracts having been made.

9. At the moment there are some 180 mill lbs U being used. There is a lot of talk about tiny spot quantities being offered and taken at much increased prices. However that is peanuts compared with total demand.

There is also a lot of talk about minor productions from a variety of project to come on stream. Together, this supply is also peanuts. Even a large U holder such as SMM can only produce a limited amount/year, even if it has a superior holding.

So, the problem will rapidly become unbearable: Users and prospective users as well as Uranium ETF's together use a lot of U; if they keep on waiting while seeing minute quantities being offered on spot, then the situation can be compared with a spring which is tightened all the time while waiting proceeds, then suddenly it unwinds resulting in sudden massive increases not yet seen before. That is because there is a limit to waiting as there are competing users.

10. Bear in mind that Banks will only give loans once the user can show he has Uranium fuel prior to even building the nuclear station.

That is the big picture, IMHO.

Gerry
Readers, please do your own research and you decide if and when to buy, hold or sell any stocks or metals/commodities.