David Cates | Uranium Market Update & Current Investor Sentiment

Key Points from David Cates’ (Denison Mines CEO and Uranium Participation Corporation CEO) BNN interview regarding the current uranium market and investor sentiment:

-Currently there is 10 million pounds per year of uranium oversupply and one remedy for this is to close currently producing mines.

-A ‘bright spot’ in the depths of the uranium market that people should be looking at is that UPC went out to raise $20 million and ended up raising $40 million due to investor demand.

-Post the recent UPC financing around $3.50 CAD/share UPC has traded above the financing price per share at $3.60-$3.65 CAD.

-Mr. Cates said that those participating in the financing was a mix of US, Canadian and European hedge fund players “making a bet that $20 to $21 uranium will be a really good investment”…”I think what is really going on is that they are looking at the fact that the utilities are being a bit complacent right now and they are not really trading in the spot market or the contract market so the price has become almost artificially depressed. And so why not come into the space while they have depressed that price. I mean the price is even below where we’d see the lowest cost mines in the world operate economically. So it is really an irrational price. I think the money is coming in saying, ‘How many times are we going to be able to a big position at $20-21/lb uranium?'”

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