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In a very short period of time, we have seen the spot price of uranium drop by over 50% after massive speculation had pushed the price up. There was a time when uranium producers could barely make a profit, as only those companies with high grade uranium could sell for a profit. Uranium producers were among the agricultural companies as they had trouble breaking even. With countries like China leading the way, and current countries like Japan and France showing the viability in the market, these companies could see a great profit going forward.

I do like Cameco (NYSE:CCJ) at this point as it is a huge producer and has great holdings with respect to yellow cake. This company is a buy now as it has pulled back on bad news about its Cigar Lake holdings and the constant flooding slowing its ability to begin producing. CCJ is a much more conservative holding based on their legacy contracts, and should be looked at hard at these prices.

If you are looking for growth Denison Mines (NYSEMKT:DNN) seems to be a very nice pick going forward. When looking at these companies, be careful as many are speculative names that are currently not producing anything or have no plans to start new mines for production. These companies move higher and lower based on the price of uranium alone. DNN is a production company and its growth numbers look good going forward.

DNN has been in the industry for over 50 years. It has assets in the United States and Canada, plus holdings in Zambia and Mongolia. The US and Canadian holdings are comprised of seven operational mines and two uranium mills. Last year's production was 683,000 pounds of U3O8, and this year's production will fall somewhere between 1.7 and 1.9 million pounds.

Looking forward, the company has plenty of growth. Its estimates project that 2011 could be a huge year. Low estimates have the company producing 3.6 million pounds, but high estimates have its production at 6 million. The main reason for the increase will be the start of production of its Zambian and Mongolian mines.

The largest reason the uranium producers will benefit is the nuclear renaissance that is under way. Supply and demand will increase the price over time as production continues to be less than demand. Due to the length of time it takes to get a mine up and running, it could be a long time before production will actually meet demand. Currently, 15% of world electricity is produced by nuclear energy, and this percentage will increase as there are 34 nuclear reactors under construction and over 90 are in the planning phase. In India, there are six reactors under construction and the country's goal is to have half of its electricity generated by nuclear energy by 2050. India will be a completely new market for uranium sometime in 2009 and it is working on contracts to purchase the United States's uranium.

If we are to compare nuclear costs to those of other energy sources, we find that nuclear is much cheaper. Many people disagree with the different sources sited, but that is mostly because in the United States we have no nuclear reactors of advanced technology. Our current reactors are old and out of date, and with this comes extra costs.

When the US Congressional Budget Office did its study in May of 2008, it found that operating costs including fuel, operations and maintenance were much cheaper when advanced nuclear technologies were used. Innovative clean natural gas technologies were $55/MWh, conventional natural gas was $41, innovative clean coal was $23, conventional coal was $20 and advanced nuclear was $16. This being the case, it is believed that many other countries will continue to pursue nuclear energy, further tightening supply.

DNN is interesting as it has started doing contracts with floor prices, with $45 per pound as the floor. These new US contracts are quite good as it was not long ago that uranium was selling for less than $10 a pound. Even more impressive is that their sales are 95% of the current long term price, which has been constant for some time even as the spot price has decreased dramatically. DNN has stated that all future contracts will be set this way, with appropriate floor prices and close to the current market, which takes much of the fluctuation out of the price of the commodity.

DNN has also made some interesting investments in other uranium exploration companies with decent sized assets. The first is Uranerz Energy (NYSEMKT:URZ), in which it has a 9.9% interest. URZ has current properties in Saskatchewan and Wyoming. These sites are currently under review by the NRC for licensing. It also owns a 10% equity interest in Energy Metals Limited [ASX:EME].

In summary, DNN will have increased its uranium production by over 200% from 2007 to the end of this year. Its combined uranium and vanadium sales will double revenue year over year. By 2011, its Zambian mine will be producing uranium, and probably its Mongolian mine as well. All of this will produce impressive growth going forward at much better prices than were seen just a couple of years ago. I would look for this company to be a great long term investment.