Hi captjohn,Good choice to stick with BMN.cheersneoThe Uranium...

Hi captjohn,

Good choice to stick with BMN.

cheers
neo

The Uranium Sector Signs of Life?

Over the last two years, uranium prices have been in an ever accelerating upward trend, culminating in prices reaching US$138.00/lb in late June. Since then, over a period of 16 weeks, the spot uranium price had an equally spectacular fall to around US$75.00/lb and many of the uranium companies listed on the ASX suffered massive price falls.

We have been tracking the fortunes of a basket of 26 australian-listed uranium explorers and producers since the highs experienced by the uranium sector in April 2007. Some interesting observations were made and, more importantly, some important lessons learned. At the height of the sell off, our basket of uranium stocks
were, on average, down a massive 71% on their April highs. The recovery has been slow. The sell off coincided with the flow of hot money being transferred from the uranium sector to the next hot thing . In this case, the junior iron ore sector. Then add the fall-out from the U.S. sub-prime market and the subsequent risk aversion to the very speculative end of the market. Stock prices had far exceeded any value based on
fundamentals and the sector seemed doomed at least in the short term. However, in the last week or so there are some signs of life. The average drop for our
basket of 26 stocks now stands at 44%. Quite a recovery. But which stocks have recovered the best and why?

It is interesting to note that both our favoured uranium stocks Bannerman Resources (BMN) and Extract Resources (EXT) are positioned 3rd and 1st respectively with price changes since April of -16% and -1%. Although the price of EXT didn t change that
much initially, BMN fell 66% from its highs at one point and was positioned at about the average throughout the downturn. It has made a spectacular recovery from a low of $1.30 to $3.33 today. EXT have also made an exceptionally good recovery after falling more recently.

The top three places (BMN, WME and EXT) all have their projects located in Namibia and we believe, with BMN and EXT at least, that these companies have real
opportunities to commercialise their discoveries within the next three years. Australian based projects have not fared so well in an environment of political uncertainty and a lack of scale seen in many of their projects. Also telling for the Australian sector, is
RIO s decision to sell its Kintyre deposit in WA, in favour of up-grading its Rossing Mine. Where s Rossing? It s in Namibia.