citigroup report

Citigroup have released a 44 page report on the uranium industry and uranium miners. It covers BHP, RIO, ERA and PDN. EXT gets a mention in the RIO section. It's a couple of paragraphs summarizing what we already know but this is good exposure as this gets it under the radar of institutional buyers. The report also says that RIO's stake gives it a "seat at the table".

So as not to breach hotcopper's posting rules, I'll just summarize some other interesting points.

- balanced uranium demand/supply until 2011, after that a supply deficit expected
- Supply from Kazakhstan and secondary uranium supply (uranium from decommissioned nukes, tailings reprocessing, inventory drawdowns) the big unknowns which could reduce the supply deficit
- Cigar Lake not expected until 2014 !
- Olympic Dam production increase not expected until 2016
- A number of reactors planned in the Western world likely to have significant delays. Expect more reactor build in China because of faster permitting processes, access to financing and cheaper/faster reactor build.
- China will likely eventually move to "cover uranium short". This means locking in supply. Acquisitions difficult in Aus & Canada due to political issues. Paladin possible target although Aussie assets make it tricky. I guess you can read into this that EXT is an easier target in political terms.
- recent acquisitions have been done at $US13-14 per pound for operating or close to production mines (Honeymoon, Karatau)
- Citi use a $US5 to $US10 price for undeveloped resources when calculating NPV