once and for all: spot vs long term

So many uninformed posters on here (and no doubt sellers as well) keep on quoting the current SPOT price of uranium as "the uranium price". Even some analysts have made the same mistake.

A couple of facts:

1. The spot market in uranium is NOT the same as the spot market in gold etc. The U spot market accounts for less than 5% of all U transactions, and is highly discretionary. It consists mainly of a few speculative hedge funds, a couple of uranium stockpilers, and much of the time they are selling to each other. Occasionally, a power utility will buy at spot to top up. And occasionally, even Paladin has been known to buy on the spot market to top up its own contract offtake, and also to stockpile uranium for future spot trading.

2. Almost ALL power utilities have their uranium supplies locked up in long term offtake contracts, at the long term contract price. This is currently sitting between $US61 and $US70 per pound, approx. This is also expected to go higher - possibly MUCH higher - over the next year or two.

3. Currently there has been an overhang on the spot market as the US Dept of Energy are releasing a few hundred pounds of uranium onto the market from today onwards (for the next few transactions). So buyers and sellers have been standing back to see what happens to the price. Last two-week period, there were NO transactions on the spot market.

4. People who are trying to compare BMN's OPEX with the current SPOT price are grossly mistaken, as they will be looking for long term offtake agreements. In fact, they are already in discussion with some potential partners in these....

5. BMN have released a PFS showing that they can construct a profitable mine at today's LONG TERM prices, and given that these are widely expected to rise, particularly as China and India (and many others) move more and more towards nuclear power. And who knows what effect Copenhagen may have on the move to nuclear? So BMN could just turn out to be one of the most oversold bargains in the uranium sector just about now. ANd this would apply to any predator out there as well - eg Paladin/Cameco/Areva or dare I say it - the Chinese.... Would be interesting to see how the FIRB viewed a Chinese majority takeover, given that BMN's operations are in Namibia, not Australia.

6. Don't forget that BMN also have other irons in the fire - including in Botswana.

I'm holding some BMN from years ago, bought VERY cheaply, and free-carried (taken multiple profits out of trades over the years) so I'm just letting them sit there, for the next 5 years if necessary. Just mentioning that by way of disclosure :)