PRZOOM - /newswire/ -
Sarasota, FL, United States, 2006/10/24 - Sprott Asset Management Market Strategist Kevin Bambrough predicted the uranium price could soar after Cameco Corp announced construction delays on its half-owned uranium mine in northern Saskatchewan..
In a tape-recorded telephone interview, Sprott Asset Management Market Strategist Kevin Bambrough told StockInterview.com, “I still say the uranium price is going to test and exceed the inflation-adjustment highs of the prior peak. I think the (peak of) $110 to $120 will get taken out in this market.” He was referring to the impact of Cameco Corp’s announcement on Monday about construction delays on the company’s half-owned Cigar Lake uranium mine in northern Saskatchewan. This is the world’s largest undeveloped uranium deposit, and it may remain so unless Cameco can solve the flooding problem, which shut down the project on Monday.
When will Cigar Lake actually go into production? “Maybe, it will just be starting in 2010 if they figure it out,” Bambrough said. “If they figure out the whole new plan – the problem is you’ve got to deal with water permits.” Because Cameco may have to add a processing facility to be able to handle the increased flow rate, the company may have to apply for new water permits.
“Right now, they’re only permitted to process about 500 cubic meters of water an hour,” he pointed out. Cameco Chief Executive Jerry Grandey told analysts on Monday the water was flowing at 1500 cubic meters an hour. “Basically, they’ve got to go and apply for permitting to get processing in place to handle that extra water flow,” Bambrough said. “We don’t know what the flow rate is ultimately going to be. They don’t even know how contaminated the water is going to be and what processing needs to be done. They’ve got a big water problem to deal with.”
In the meantime, bad news for Cameco may be cause for celebration for many of the junior uranium companies preparing for production in the near term. Bambrough said, “We’ll have to see how high the spike goes. I still think some companies are going to be able to sign long-term deals around $100/pound. I don’t think that will be a problem for some to have that opportunity.”
Stockinterview.com is an online news service, which provides investigative reporting, editorial, analysis and commentary of the nuclear fuel cycle, uranium mining, nuclear power, the environment and the natural resource industry.
Today’s featured interview with Sprott Asset Management Market Strategist Kevin Bambrough appears on the financial news website.