Full Position in U.TO
October 1, 2008 – 6:43 pmI am now at a full position in U.TO with an average cost per share = $6.96. There is an obvious selloff in shares occurring which appears is being driven by a combination of equity/resource/fund liquidation selling, a broad based flight to safety in the market, and the weekly spot for U308 published yesterday at $53 USD and UF6 at $148. At these spot prices the NAV for U.TO in CDN$ is at $7.49 by my calculation:
Inventory Price Value
U308 5425000 $53.00 $287,525,000.00
UF6 1492230 $148.00 $220,850,040.00
Shares Outstanding 72323091
Total Value $508,375,040.00
$1 USD = 1.0659 CDN
NAV USD $7.03 NAV CDN $7.49
One of the challenges in investing in Uranium is that it is not traded like other commodities so there can be a significant disconnect between supply, demand, and current pricing as detailed in a spring commentary at Commodity News and Mining Stocks. In my opinion market has oversold U.TO which is currently trading intra-day at $5.63, but with my full position north of that I will simply hold and wait for the market sentiment to reverse.