Fluffy - very rare but refreshing to read a PEN post that sees...

Fluffy - very rare but refreshing to read a PEN post that sees PEN and the U industry for what and where they are at the moment! Unlike the deluded nonsense ('investment of the century', '2010 all over again', '6 cents soon', '8c by October to trigger the performance share vesting' etc) that normally gets passed for serious comment around here.

I agree that on a peer comparison basis, PEN looks more than fully priced at 1.7c given current market conditions. Uranerz and Ur-Energy are both producing with multiple contracts but with soft market caps of US$98 and $111M respectively.

Also agree that PEN management are between a rock and hard place at the moment - needing contracts to generate market confidence but not wanting to lock in low prices. And these low prices increasingly look likely to continue for a few years yet.

Because early production, as with URG and URZ, will not be profitable on an all in costs basis (unless PEN can secure substantial contracts at $60+/lb between now and then), there is likely to be a need for a cap raise as early as the end of this calendar year/early next.

PEN is increasingly looking like a 4-5 year hold from here for a decent return. It is likely to take that long for the Chinese-build boom (the only real bright spot in the U industry growth profile) to kick in in terms of sustained increase in U prices. But then what about the dampening effect of all the new production projects (12 going through the permitting process just in Wyoming at the moment) and Cameco with 3M lbs/annum unused capacity in Wyoming alone.

I would think this is at least a 5-year play for the new investors - with or without a takeover in the mix.