In absence of any directions from the company, I have put my short term aspirations for WCU on hold for a while. I still believe that long term Uranium is a goer (2011 - 2013), however what concerns me the most is not when the mining will start, or whether UFO's are struck (loved that post Up2Date - thanks for brightening my day).
My biggest concern with WCU is the Uranium spot price and even the long term contract prices at the moment. I asked the directors in an e-mail a few months back - can they get it out of the ground and sell it for a profit. If they can't then everything they do is academic. Naturally no reply was ever given to this. I really worry about the short term viability of Daneros. Spot prices are low 40's $US. What is the magic point that we say - leave it in the ground?
Question i want answered from WCU is 1. what will it cost to extract the ore from the ground I'd love to know that answer if anyone can offer anything?
2. If they can't get it out of the ground now - how long can the project be stalled before funds become an issue?? Where do the options then sit for those who are still holding?
Next worry - Today we see the AUD knocking on the door of .9 USD - that is going to further erode what is left of the profits WCU makes by the time it makes our shores (given the above - it isn't going to be much to start with). It will however reduce marginally the cost of operations if the money is in AUD and spent in the US.
I still see plenty of positives for the company (i have harped on them long enough), but the two concerns above have caused a massive re-think on my holding (and acted accordingly). I'd love to hear from others (especially TCF - you always have some valid opinions pos or neg).
Long term contract prices appear to be marginally better (WCU has yet to announce any contract though). Royal bank of Scotland predicts a return to higher levels in the order of 95/pound late 2011 from what i read - can WCU hold out 2 years or are these moves for the TSX listing a stopgap funding?
By the way - I started trying to calculate the cost of a possible TSX listing recently and whist it is still a work in progress i am sure the $1mil area will come into the equation.
Thoughts please?
WCU Price at posting:
22.5¢ Sentiment: None Disclosure: Not Held
