u price down, page-9

Sircorp,

I've posted why I do not think this US Government decision is a problem for PEN or for any U producer or explorer, for that matter.

However it is another element in the U market place that we need to be aware of.

So in the interests of accuracy (and for the particular benefit of those on these threads who prefer accuracy), I should point out that you dropped a decimal point in your calculations. That is, the 450 tons is equivalent to 2.2% of CURRENT annual global consumption of U.

That is based on:

1. 450 long tons of U = just over 1 million lbs
2. 180 million lbs of annual consumption therefore converts to 81,000 tons
3. 450 tons per qtr is 1,800 tons per annum
4. 1,800 tons is 2.2% of 81,000 tons

While this 2.2% is reasonably significant, it is important to know that the US Government is already selling 300 tons of this U into the market each quarter - so the NET increase is only 150 tons a quarter, or 600 tons per annum, which converts to only 1.35 million lbs or 0.75% of current annual consumption.

As well, the annual consumption is forecast to increase by around 70 million pounds per annum between 2010 and 2020 (see INDABA presentation) - or 7 million pounds per year.

This annual increase (of 7m lbs) is 5 times bigger than the 1.35 additional lbs that the US Government will be placing in the market over the next 3 years. In other words it will be easily absorbed by the market and is not a threat.