Michael Smedley
Denison Energy
DEN-T
BUY
Jul 20, 2005
A peculiar asset as it is the only other legitimate producer after Cameco (CCO-T). Has a lot of irons in the fire. Has part ownership of the next mine that comes on.
What hurt this company, after the disaster at Cameco (CCO-T) was that they where in line to do some of the milling work at Cigar Lake. This will actually be recovered with much higher uranium prices.
Merging with IUC (IUC-T). These are 2 B companies, putting them together and not getting anything out of them but production growth. Feels uranium prices are going through $100 over the next year or so. Prefers Uranium Participation (U-T).
Has become the uranium play be default with the Cigar Lake mine problems of Cameco (CCO-T), Has production, so is looking better than a lot of the juniors.
106 million pounds mined from ground sources, but 180 million pounds were used last year. The difference has come from warheads, and inventories.
There is a shortage of Uranium.
Denison has a great management team. Has backing of the Lunden family. It owns 2 out of 4 of the mills that can process uranium. Around $12 is a safe bet if you want to hold if for a year.