Uranium the new gold!!:
Cameco Corporation (CCO-T) has announced another delay at the Cigar Lake mine, on Sunday there was a rockfall that has caused the mine to flood. Cameco has not been able to contain the flooding due to a malfunctioning bulkhead door which did not seal allowing water in to the mine.
It is expected that the flooding will set back operation of the mine by at least a year. The company has not had time to fully assess the impact of the flooding but has indicated that it will add materially to the cost of developing the mine.
This bad news for Cameco is good news for other producers such as Denison Mines (DEN-T). The reduction of supply that will develop due to delays at Cigar Lake will drive the price of uranium even higher.
Uranium is in a classic situation where a shortage of supply and an increase in demand has been pushing the commodity price relentlessly higher over the past two years.
The shortage is expected to increase to 32 million pounds from 25 million pounds by 2008 due to the delays at Cigar Lake mine. These shortages have been met by recycling of surplus military uranium that supply is almost exhausted and will not be available for much longer.
The pressure is now on for current producers to add production to ensure that Nuclear power plants currently running will not be forced to shut down due to a lack of fuel.
The supply shortage is not going to be easily fixed and uranium prices will remain elevated for an extended period of time as a result.
For more information go to www.campbellreport.com
It is expected that the flooding will set back operation of the mine by at least a year. The company has not had time to fully assess the impact of the flooding but has indicated that it will add materially to the cost of developing the mine.
This bad news for Cameco is good news for other producers such as Denison Mines (DEN-T). The reduction of supply that will develop due to delays at Cigar Lake will drive the price of uranium even higher.
Uranium is in a classic situation where a shortage of supply and an increase in demand has been pushing the commodity price relentlessly higher over the past two years.
The shortage is expected to increase to 32 million pounds from 25 million pounds by 2008 due to the delays at Cigar Lake mine. These shortages have been met by recycling of surplus military uranium that supply is almost exhausted and will not be available for much longer.
The pressure is now on for current producers to add production to ensure that Nuclear power plants currently running will not be forced to shut down due to a lack of fuel.
The supply shortage is not going to be easily fixed and uranium prices will remain elevated for an extended period of time as a result.
For more information go to www.campbellreport.com
posted by Grant | 12:13 PM
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