Hello,

Thank you for your question. Generally for open pit or underground operations, the price of uranium would likely need to be around $70/lb. For deposits located in areas where in-situ recovery can be used to mine the uranium, such as our Bootheel Uranium Project in Wyoming, operation costs are typically only $18-22/lb. Also, less than 20% of uranium is sold on the spot market, where as the majority of uranium is generally sold on the long-term market which currently sits at $65/lb.

I believe the contract for the conversion of uranium from decommissioned nuclear weapons is set to expire in 2013. This, however, is not as much a factor on the price of uranium as the U.S. Department of Energy’s decision to release uranium from the stockpile in order to fund reclamation. Also, on the bullish side of things, the US’s support for the nuclear industry is continuing to grow. Last week the US announced that it would supply $8.3 billion in loan guarantees (which is planned to grow to $54 billion) for a build-out of nuclear power plants in the U.S.