sale of the century, page-53

Although I am a long term bull of Uranium, I am not a holder of PDN. I just don't think the massive global glut will be absorbed in time for PDN to avoid its day of reckoning. In the mean time (in my opinion) PDN (not the LH mine) remains in a very vulnerable position.

In this context, I have two observations re the CNNC deal.

1, JB has long espoused the strategy of remaining an independent producer. I can see this being of some benefit, encouraging a potential supercharged auction for the company in a U bull market, without the interference of a major on the share registry or nasty pre-emptions at the asset level. If CNNC does go ahead with its purchase then PDN looses its independence and in all likelihood any chance of a god father offer from a third party.I would expect that this premium would vanish from future share price expectations.
2, CNNC needs HQ approval to proceed, read into this, "we will decide later".I have no doubt that CNNC like the LH mine and as a shareholder of the project company it will want more of it and will support the mine in every way. PDN shareholders should not feel as comfortable, in fact from here on in, they should be wary of a CNNC creep. If market conditions do not improve by June, and PDN's options other than CNNC reduce, it is possible that China HQ approves the cheque being written however with a change in term such as ownership %age being higher. Its all about leverage and I am not sure PDN can play poker that effectively with this Chinese SOE.

These are some thoughts (which I am sure most of you are fully on top of) from someone who knows the industry and the players involved and has been reading your analysis, hopes and expectations with interest.

DYOR

The pick