Tuesday 13 December 2016
A great opportunity setting up: Uranium
As of today, the price of Uranium is going for 18 dollars a pound. This will result in a huge opportunity in the next couple of years. The average cost to product Uranium is about 31 dollars on average. The numbers present a huge loss for producers, and I believe the lowest cost Uranium producer in north america can produce it for about 22 dollars so everyone is taking a loss at these levels. This will cause mine closures which will cause the supply coming to the market to shrink. This will not have immediate effect because there is still an over supply on the market which is the reason for the price falling in the first place. Marin Katusa, who is a very smart guy in the resource sector when it comes to investments, says the over supply will last 6-18 months. I haven't done the math on this myself but I trust his is accurate. What this means when the over supply has been used up, we will see a nice rally in the price of uranium. I'm not sure what it will go to, but I know that the beat up companies in this sector will rally greatly. Profits will be made if you put your money in the right companies. I have not yet invested, but I will be entering a position starting in 2017 so I can position myself for possible gains. My belief is you could see 200% gains or more if your in the right company's. I personally am looking at UEC at the moment, but do your on research because these are risky plays and you can lose a huge amount, or all of your investment. There is great risk involved in these trades always.
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