Good time to buy IMO, page-22

Re- A good time to buy.
Anything under 10c is a good time to buy imho, personally I would like to see 5.9c taken out to finish this consolidation before the next push. We are very close whether we get there or not remains to be seen .

I came across this comment on an article recently . The author does an excellent job of explaining why analysts are usually late to the party.

Quote....
There are a few interesting side stories to this article that are worthy of mention. Often commentators on the industry use reactor numbers in a proportionate way indicating that the uranium consumption lost by a shutdown reactor is the same as the uranium consumption of a new reactor. It is not. Firstly the new reactors being built are much larger than the older ones being closed. A typical Chinese reactor is 1 Gigawatt (1000 Megawatt) capacity. That reactor will (approximately) use twice the Uranium of two 500 MW reactors. And of course there are the giant European Pressurised Water reactors being built at Okulito in Finland and Flamanville in France which have a nameplate rating of 1650MW. In the UAE the four 1400MW plants being built iat Barakah are Korean designed similar to the Shin Kori reactor making it a 4 reactor 5600MW site. That is big by any standards. So the first takeaway is these new reactors are much larger than their predecessors. Larger means a bigger core and a bigger core means more uranium required - alot more.

The second important point is a bit more complex. New reactors require more uranium in the early years than reactors that have been operating for a while. This is to do with the core physics of the reactor and the build up of neutron poisons such as Samarium and Xenon in the fuel elements. What it essentially means is that instead of being able to reorganise core fuel strings and put back fuel that has already been irradiated much more new fuel is required. So initially a core requires alot more fresh Uranium than a steady state core does. That is the reason why China has been stockpiling Uranium. If you are building many brand new reactors you need much more Uranium in the early operating years of those plants than you do in later years. If you are planning to build 100 new plants you need a big stockpile of Uranium. This is of course what happened in the USA when it was building out its reactor fleet. China is going to build about 250 new plants a much bigger fleet than the USA so it needs a proportionally bigger stockpile of Uranium than the USA did.

A third factor also rarely mentioned is the upratings of existing US and other plants. Many operating plants in the USA are producing more than their initial nameplate ratings and similar applications have been made in Japan and elsewhere. More energy requires more fuel input and the fuel is Uranium.

On the negative side of the equation is that PWR's can burn Mixed Oxide fuels made of Uranium and Plutonium very effectively which makes very good use of used fuel. Only a few countries (UK, France, USA, Russia) have proven capability to do this. I expect China has this capability too. But it isn't cheap and it is not easy because the fuel is radioactive and needs shielded facilities to accomplish it. With Uranium at $40/LB there is not much of an economic incentive to do it...although there may be a political incentive if your nation has no indiginous supplies of Uranium.

So what is the overall picture. In my view most analysts are underestimating the demand from new reactors and overestimating what are termed "stockpiles"...above ground stores of Uranium....concluding that the market is oversupplied. It is a huge leap of faith to believe that these stockpiles will be made available to the commercial marketplace and I consider the exact opposite will be the case. Nations - especially Russia and the USA will want to ensure they have plenty of the material to run their military fleets of ships as well as ensure their commercial reactor fleets have an "insurance" in the event of supply disruptions. The market may well have been oversupplied in the past but that is rapidly changing. Japan is not going to dump Uranium back into the spot market as it restarts its reactors and Nations that have professed their desire to end nuclear power will need to rethink that policy as they become more and more dependent on irregular fuel supplies (solar and wind) and need to burn coal to pick up the slack.

My view...starting this year we will see the start of a ten year Uranium Bull market that will dwarf all others. Happy investing.
End quote...

Read it as many times as you need for it to sink in folks.