Value Microcaps Free-For-All

[micham2012]

re Uranium:

CCJ announced today that production at Cigar Lake will be delayed by a year, and more expensive than projected, by reason of problems at the mine.

This has hurt CCJ's price today, but has lit a fire under some of the other near term producers: SXR up 11% and UEX up 7%, as this is written. A delay at Cigar Lake is a delay in supply that was expected to come on line in early 2008, and thus ease pressures in the relatively near term on the spot and long term contract prices for the metal. Even as Len's index languishes at its 20% correction levels, the spot price has continued to rise, and it would not be surprising if, during the next week, it is significantly affected by this announcement. It is interesting that Uranium Participation Corporation and its May 2007 warrants -- direct plays on the spot price of the metal -- are making new highs. The warrants are up about 9% today.

It is ironic to say the least, but in the near term CCJ might actually benefit from its Cigar Lake problems, albeit not as much as other near term producers.

Steve