Some U3O8 supply and demand figures of interest:2008Global...

Some U3O8 supply and demand figures of interest:

2008
Global demand (435 reactors, 370 GWe) 77,000 t (c 170m lbs)
Global mine supply 51,600 t (c 114m lbs) - only accounts for about 68% of global demand.
It takes approximately 195 t of U3O8 per year to produce 1GWe (3 times that amount to start up a reactor).

I note that demand is currently tracking above the high end of projections made by the IAEA back in 2001. Unsurprisingly South East Asia looks set to be the main driver of increases in demand. In SE Asia there are 111 reactors in operation. 21 Under construction and up to a further 150 planned. It is expected that Asia will add approximately 39GWe of capacity per year to 2020. Requiring an additional 7,605 t (16.8m lbs) of U3O8 per annum. On Asian generation expansion alone world demand is set to increase c10% per annum baselining from 2008 figures.

Any suggestion that re-cycled nuclear warhead stockpiles are going to flood the market are questionable in my view. There has been some reference to the effect that a continuation of the megatons to megawatts deal signed between Russian and the US in 1994 would have in further depressing the price of uranium. I note that under the current deal about 30 t per annum of highly-enriched uranium from weapons stockpiles has been displacing some 10,600 tonnes of U3O8 production from mines each year, and meeting about 13% of current world reactor requirements. There are only 3 years of this program to run - it ends 2013. By the time its done it will have accounted for about 20,000 warheads the equivalent of 152,000 t of U3O8. Best estimates are that there are c23,375 nuclear warheads left globally. I expect that both Russia and the states will be giving serious thought to any extension of the program - despite Russia itself having healthy U3O8 resources of its own, it also has ambitious plans to expand nuclear generation capapcity and will need to secure supplies to meet its own increasing domestic demand. I think you could reasonably consider that warheads as a source of secondary supplies are nearing strategic levels.

Through a combination of the removal of a big portion of secondary supplies that go a significant way to bridging the current gap between primary mine supply and demand, coupled with increased demand, my personal read of the supply and demand fundamentals in the near to medium term are pretty positive.

Lets not forget, is acknowledged that lead times to bring major projects into operation are typically between eight and ten years from discovery to start of production. Add in exploration time and the lead time is even greater. It would most likely be no earlier than 2015 or 2020 before production could begin from resources discovered during exploration started in 2000.

Be interesting to get a fix on the expected increases in supply side capacity of existing mines in the next few years - that wasn't something I could find on an aggregated global level. But if you consider that Cigar Lake was expected to be one of the last large production centres to come on line for some time, it is not easy to see supply rising at a serious rate sufficient to meet the rising demand and bridge the gap left by a loss in secondary supplies - just my view based on what I have read.

An advanced viable mine such as BMN therefore takes on a new value in that context. I'm fairly confident there will be considerable interest in BMN in due course.