Red-Hot Resources

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Friday, December 14, 2007

Uranium Update

The short-term spot price of uranium has dropped slightly to $92 per pound, according to Ux Consulting. The long-term price remains stable at $95 per pound. We probably won't see any real movement in either price until after the New Year.

More info from Toll Cross Securities ...

Denison Mines has 567 million pounds of uranium in total (including historical) resources. If you divide tis market cap by the number of pounds, you can buy those pounds for $6.42.

The same math for Cameco works out to $13.76. That would seem to suggest that Denison is pretty undervalued compared to Cameco by this particular method of valuation.

Uranium One, meanwhile, works out to $5.62 by the same math -- the cheapest of the lot.

One that's a bit pricey is Paladin. With 226 million pounds in total uranium resources, you can buy that metal for 16.92. On the other hand, Paladin is just bringing its mines online now and ramping up production, so you can see why it might carry a premium.

That's just some food for thought.


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