I decided to reinvest the proceeds of the position in Uranium Energy (URME.OB) at $5.90. Frequent readers know that I have been following URME for quite some time, and although it remains difficult to value the company, everything I have read from the company shows them being on track with their development timeline. For those readers who are new, I wrote a summary on URME back on February 7th that can be found in the archives. The recent pullback in the stock, despite the fact that uranium prices have continued to move higher, looks to me to be a buying opportunity. Yes, the company is probably going to need more financing in the future, but they have a solid amount of cash on hand for the next year, and 2007 should provide some visibility on their uranium assets. Of course, any company without revenues is going to be very risky, but I believe this venture has sufficient reward to justify the risk. In any case, the position remains quite small, so it can´t do much damage to my portfolio.
As for my outlook on uranium, I think $100 is in the cards over the next month. All recent news regarding supply has shown the situation to be getting tighter, and demand is only going to increase in the next decade. I don´t like to speculate wildly about the path of future prices, but suffice to say that they will keep going up until there is a breakthrough in the supply demand situation. That doesn't appear to be very likely at present.