interesting article keep the faith in bmn

Is Uranium Set for a Rebound?
Source: proactiveinvestors.com 08/08/2008

The commercial uranium market has had a very short history compared to most other metals as until 1968 the US Government was the sole purchaser of the metal. But in the last forty years the market has undergone some pronounced bull and bear markets and the impact of these on, for example, uranium inventories, exploration, and the availability of uranium specialists is still shaping the outlook for the industry.

In the most recent cycle the spot price of uranium soared from below $10/lb in 2002 to a peak of $136/lb in mid 2007, but has since more than halved to $64/lb today. Shares in uranium companies likewise enjoyed a massive bull run with, for example, the price of Cameco, the world’s largest uranium producer, rising from under $4 in 2002 to $55 by mid-07 and back to $33 today. The last boom also spawned the birth of a huge number of uranium exploration, development and mining companies; over one thousand are currently listed on the World Information Service about Energy (WISE) website.

So where are we now in the current cycle and what is the long term outlook? Of course these are the sixty four million dollar questions, but there is a school of thought which argues there is now a misalignment between the outlook for nuclear energy, (which is becoming better by the day as oil prices soar and concerns about energy security and carbon emissions intensify), and the current low valuation of uranium companies. Arguably, the best uranium companies, those which will genuinely deliver in the future, are looking cheap...