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Price will stay low unless Kaza cuts production by another 50%
Swinger, Your 2p quote is fat from correct. My wife bought ARS at 7.5p over 10 years ago, can hardly regard as a sucessfful investment by any standard. She agree now to off load the share slowly in coming days and weeks and reinvest in BKY. Never forget ARS is an Indonisain mining shares, high risk investment.
Close period is grey area. Time before result or price sensitive insider info, not allow to trade. Exploration data sent for analyse was announced in quarterly statement and is public knowledge. If the director has no insider knowledge about pending result and the director has inform the company about his intention to purchase, then no issue whatever. If that's the case, even the company announce positive exploration result today, he has done nothing wrong. AIMHO.
The key is Cameco unable to make a profit at $45/lb, how many North America utilities willing to pay high LTC when spot below $40? where can Cameco find working capital when its inventory is exhausted? If I am Kaza, I will hope for a slow Spot recovery, this will give rise to an opportunity to mope up Camecos's 60% Inkai JV cheap when Cameco looks for much needed survival cash flow. Closed mines,shutdown mines,no cash for new mines, litigation with Canadian Tax and Tepco, need $50/lb to breakeven, LT debt, I am surprise there ares still many Blind Bulls hooked to the share. :-))
Western politics focuses on "nuclear energy or not" to appease public opinion to consolidate their political support and popularity. Once the construction cost is sourced and financed, the cost of energy generation becomes top of political agenda. Depending on how the plant construction is financed, eg, Hinckley point by Chinese and others, the sourcing of uranium supply is of lesser importance. The nuclear energy industry space will eventually dominated by China, Russia and few of the low cost uranium producing countries. China's foreign economic policy is very different from traditional Western nations's zero gain approach, their emphasis is on win -win, of course it will like to gain bigger slice of the win-win, but mostly it treat it's partner with fairness. As time goes on, when more countries adapt China's in win cooperation approach, western countries concern with national security will gradually disappear. The quicker it happens, the better it is for everyone worldwide. No comoany is too big to fail, market economy always has the final say on eventual outcome. IMHO, cameco has only 10 months time window to see through its current business crisis, a lot also depends on outcome of the on going tax court case. I guess the reason it shut down mines for 10 months is because it has onl10 months uranium inventory, once it is depleted and it can't raise new working capital elsewhere, if will spell the end the company. AIMHO! Btw, why risked money in CAMECO when there are other better investment options? :-))
these guys put too much emphasis on it uranium assets. These mines in real term worth nothing if they can't be mine profitably - they are not valuable assets, they become liabilities. e.g. cost of maintaining shut down mines etc.
this company is on edge, doesn't take much to tip it over. one or more of the following will damage it for good: - hefty tax fine dished out by the Canadians, unable to pay fine. - U price remains low, utilities not signing new LTC - uranium inventory sold out, not enough working capital as going concern. - if uranium spot price surge higher than $35 which is higher than the company LTC price, but lower than the production cost of the suspend mine, the company will loss money on every lb of uranium it buys from the market. - fail to full fill its LTC commitment to deliver enough uranium to customers. - fails to service and default on its long term debt. Lets get real , what utilities will sign new contracts with a company which is practically on its knees? IMHO, looks like another Paladin in the making.
It will cost Cameco close to $100m to maintain the shut down mines. It will cost even more to restart and bring the mines back to full production again. The 40% cut in output is not sufficient enough to drag the utilities back to sign LTC in large number, U price will stay below $30 for next 18 months. By then, Cameco may have to take the difficult decision to close these mines for good. I personally will stay clear of the share.
All is well, thank. Here for the long long long long term gain, shares are safely kept in bottom drawer. Why jump off a winner horse before it pasts the post? All is not well at Cameco, CEO gave himself the option to further reduce production down the line. Next key is what the company will do with its Kaza JV Inkai project, will it be part of the to be announced Kaza further output cut? If Canadisn gov let Cameco off lightly, it will set a negative precedent on future court case against big corp tax avoidance. It will be open house for all. The Waring parties would have settle the case out of court by now if the fine is small. whatever the outcome, the damage is done.
All in my humble opinion. The mine suspension is the desperate attempt to keep the company going as a going concern. Here is a company couldn't make a profit on LTC of $45,. Shocking but real. The company must have serious concern that there is good chance of losing the tax law suit and having doubt raising necessary fund from the market to pay for the hefty fine. Most utilities are fully contracted till end 2018 or into 2019, fat chance they are going to rush to the market soon enough to rescue the company from its difficult situation. Only option is to cut on going expense and extract cash from inventory, buying the company sometime, whilst looking for strategic alliance either to buy the suspended mines or some sort of joint venture. I hope I am wrong for CCJ shareholders , but my gut feel is the company is struggling for survival. AIMHO, ,please do your own research and conclusion. a
So you wish everyobody sells its shares, drive the SP down to give you another trading opportunity, is that right? :-))
If they are not protected by Lucrative LTC, up to 80% of producers can never survive at u price below $45. Some of these high price contracts are expiring in coming 18 mionths, many producers will have no choice but to shut down or close mines or go bust. Price will remain low for few more months, it won't go much higher till few producers disappear for good. KAZA, who continues to flood the market even after Jap reactors shut down will have to do more, hope it retify it's mistake by cutting production by another 20 to 40 % to speed up price recovery. CAMECO is struggling to survive, if it loses its tax case and fails to raise fund to pay the fine, it may end up like Paladin, chapter 11. Interesting time ahead, my shares are in the bottom drawer, it may bring me good profit in couple year.
https://sightlineu3o8.com/2017/10/argentina-to-start-building-two-new-nuclear-reactors-in-2018/
Kaza in order to grab market shares, flood the market and largely responsible for the uranium over supply. it base cost is $16 to break even, when price approach that low, it has no choice but tor educe output drastically.. Some secondary producers uses uranium by-product to fund operation and boast profit margin, they wont like to see price fall too low either. Most utilities are fully contracted till end of 2018, so they will carry on buying cheap or run down their inventory, cant see them rush to sign new contract till late 2018. in meantime uranium price will drift around $18 to $22. Supply side destruction is happening slowly as most producers are protected by current lucrative LTC, it will only starts to hurt them when these contracts expire. Lots of producers will shut up shop if price stays below $40. Other factors can speed up price recovery, if Kaza cuts production by another 30 - 40 % or Canadian Tax authority impose hefty fine on Cameco causing big disruption to its business operation. Needs to be patient with BKY. Our good tim will come in couple of years. AIMHO!!!!
55p start of production. over 10% in 1.5 years, good return. :-))
Can someone tell me when was the last time the SP did not drop the day after the meeting? :-)) Amazing coincident? :-))
http://english.cctv.com/2017/08/22/ARTIW25t94UIAGZPqPlGeAaI170822.shtml
http://english.cctv.cm/2017/08/22/ARTIW25t94UIAGZPqPlGeAaI170822.shtml
Nuclear is the only reliable alternative, instead of politicking, national leaders should work together to make nuclear safer to use. Electric cars will replace heavy petrol polluters, we need to replace gas central heating asap, the second top polluters.