the effect of 1 usd uranium price rise

SMM was suggesting that they will have 150 mill lbs uranium at some stage.
That could be in say May 2007, the end month of my price prediction (USD$68, but currently the spot price is moving faster than that).

I think that at the moment, they will have well over 100 mill lbs, an increase of 25 mill lbs.

However, let us assume that they now have 100 mill lbs. So, what does one USD increase in the U price mean per share?

Referring to InSitu pricing, there are 198 mill shares, so, the increase per share is USD$100/198 or US50.5 cents or AUS67.8 cents, quite a considerable amount but not expressed in the share price. Perhaps a AUS5-10 cents rise is all what happens.

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On 11 May 2006, when the U price was US$42, I predicted US68 in a year's time. At the moment, the U price is US$56.00, an increase of US$14.

So, the InSitu value of 100 mill lbs uranium would have increased by 14*67.8 cents/share or AUS$9.49/share, but only a fraction of this appears in the current share price of AUS$1.88.

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Based on the current U price of US$56 or AUS$75.1677/lb. the 100 mill U lbs deposit insitu will be worth AUS$38/share against the current share price of $1.88.

What will it be worth in May 2007, when the resource is much greater while the Uranium price could have increased quite a lot?

Based on the speed of U price increases, the U price could be US$73 in May 2007, instead of my predicted US$68.

By then, we could have 150 mill lbs uranium insitu, worth US$10950 mill or AUS$14697 mill. or per share: Aus$70/share.
Note: I have increased the number of shares from 198 mill to 210 mill. in this calculation.

Gerry
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