re: Ann: Research Report - ISR Uranium and Pe... srood - your...

re: Ann: Research Report - ISR Uranium and Pe... srood - your post is spot on in my view.

If it were not a 'delicate time', I think we would have had a clear path to production by now.

Anything is possible, but I suspect, as you have inferred, that PEN is in a 'catch 22' situation - they need sufficient off-take agreements to secure project financing but they don't want to enter those off-take agreements at low term contract levels (around $45lb).

They appear to have 2 broad choices. The first is to take whatever price they can get (probably not much above $45 - because the demand is just not there at the moment)- in order to secure financing to move the project forward. The second is to mothball the project until the term U price and sentiment improves.

Which option is the most viable and least costly? I don't know, but I am sure the crunching is going on in earnest.

Re the first option, can they even afford (in terms of feasibility metrics) to forward sell a large amount of future production at around $45/lb? To some extent, this will depend on the terms (price) of the potential finance being negotiated and just what percentage of the resource has to be locked up at those contract levels.

Too many unknown variables to get a clear view but, based on what is happening elsewhere in the industry, some hard and difficult decisions are going to have to be made - unless we get a near-term upward change in sentiment and U prices.