The u market a decade ago spiked because of a SUPPLY IMBALANCE, and this time around there are future concerns mounting over future SUPPLY IMBALANCE.
I had similar thoughts to you until I came to my senses and realised opec has used such supply tactics with higher price implications- albeit the oil market being more inelastic and of many other uses aside from energy. Nonetheless, the world could not be able to switch all global nuclear power off without serious repercussions.
BOE from memory is Australia’s 4th and last fully permitted uranium mine- hence the valuation and recent moves. I suspect Duncan will be raising at 5 cents though. Either way, it will require heavy dilution to kickstart the project.
There is one thing you mention which I somewhat agree with and that is the ability of current working operations to resume production and that higher prices could be ephemeral. But it’s the same idea or even moreso in the uranium market, where there just wouldn’t be the spare capacity out there without participation from the majors. Since u projects are so overburdened with regulatory hurdles and an uneconomical current price environment, you can’t expect any slack to be picked up by new entrants coming online.
Ultimately, we still need uranium and I am of the belief that “supply creates its own demand”. And since there are no readily available substitutes for all current electrical generation by nuclear power plants, the POU merits consideration.
My biggest position is currently with PDN. Recently when it hit the .11-.12 range, it was the lowest price per share that PDN has ever seen. Almost 50% cheaper since restructuring. It’s no wonder why we are back at the price of the restructure.
A crack at 27 per pound should come shortly imo. Interesting times ahead for this space.
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