1) This fall HEU agreement will finally come to an end. This will remove 24 million pounds per year.
2) With the Japanese reactors shut down approximately 25 million pounds per year of demand was removed from the market for the past 2 years. Later this summer, most of these reactors will be restarted.
Either one of these events will significantly affect the Uranium market. Both of them are going to occur at the same time. The large fund managers know this. I believe they have begun to accumulate Uranium miners.
Over the past month, Cameco has been up in pretty much a straight line. It’s nearing the 52 week high. If Cameco continues to rise next week and takes out this high, I will be taking it as confirmation that a long awaited rotation back into Uranium stocks has begun.
I think Friday’s pop in the junior miners was sparked by the news from Niger where Islamic terrorist attacked one of Areva’s mines. With Cameco up so much, fund managers are turning to the juniors. Any company whose assets are located in the relative safety of North America and Australia will see a premium set on their stock prices.
At this point in time, I believe that anyone owning Uranium miners will be greatly rewarded by holding for the next year.
Your point is well taken regarding Japan but the end of the HEU just means that Russia will no longer be obligated to send their weapons grade material for down blending in the USA. Russia will down blend their own material and use it to either sell on the spot market or guarantee future delivery of u308 to reactors they build around the world. The shortage caused by the loss of HEU will most likely be made up from USA stockpiles of weapons grade material that will need to be down blended. How else can the lack of interest or movement in the spot/mid/long term price of U308. The end of the HEU is well known but U308 buyers have not been rushing to secure future delivery or buy on the spot market. Russia will be key in the future of U308 pricing and let's hope they feel in a gouging mood.
As for DNN specifically, my read on Wheeler is, while hi grade, the amount uf recover is not near as great as originally anticipated (at least with what was reported in 2010 and 2012 and no report in 2011).. CCJ as part owner in Wheeler is privy to all the info regarding Wheeler and as yet has made no move on it. I would hope for a buyout at $5 but would be happy with anything above $2.