Shorters, page-38

Richter,

A couple of things.

PDN is not sustainable in its current form unless the uranium price rises by about $10, within the next 12 months. This is quite possible.

What this means is that equity in PDN trades like a call option over Uranium. This is why it has value when it has no earnings and cashflow insufficient to repay debt.

The way options work is that they are valued on volatility (likelihood of being in the money) and duration. So the longer the debt repayment is, the more valuable the option as the chance of coming into the money is increased.

So now to UBS. Shorts are not long term positions, by the time you know they are short they may no longer be short.

This said, Uraniumis really sticky at current levels. It will move, but when and will it be in time?

Don't know. if you did you would go all in long or all in short. That is why there are buyers and sellers. The big guys invest a lot in research. It is not always right, but it is foolish not to observe their positions. Just know that when you know about it, it may well be old news.

Good luck