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SLX, SILEX SYSTEMS LIMITED
JustinS007
post Posted: Nov 5 2007, 11:59 AM
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In reply to: golfnvester on Monday 05/11/07 12:51pm

Hi golfnvestor. You are correct in terms of USEC currently supplying enriched material. That's their business. My post wasn't clear here. I'm not aware of the magnitude of their backlog, however if it is large then there is an obvious place for their new centrifuge plant. If not, then they are forced to decommission older enrichment facilities which they would naturally do anyway as they reach the end (or overreach!) of their servicable life.

More accurately, my post was meant to infer that they would have a hard time engaging additional market share over what they have now, and should in fact lose market share to the likes of SLX when it comes on line and once the enrichment supply chain outstrips demand (probably not until 2015 or later).

This discussion about the respective merits of both companies has been enjoyable the last few days.

SLX price seemingly holding up well. Looks like a lot of support will form around $8 now. Fingers crossed this is the case.

J.

 
golfnvester
post Posted: Nov 5 2007, 11:51 AM
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In reply to: JustinS007 on Saturday 03/11/07 03:42pm

hi justin;

some slight corrections to your post: to the contrary, USEC has billions of dollars of backlog obligations to enrich uranium for utility customers around the world for years to come - they have been in operation for decades doing just that --- and while they don't have contracts signed agains the new Centrifuge Plant - they can continue to produce via gaseous diffusion for as long as needed. if/when a centrifuge comes on line, it could simply sell at "Spot market prices" and make huge money.....only risk is if the need for SWU were to fall off a cliff ---- doubtful from a "World Need" standpoint - but hey, things like terrorist can get in the way of pragmatism & logic.

now - don't get me wrong - i have not been a USEC fan for the past two years....and have been evangelizing about Silex on the USEC Yahoo Message board in USA. and further more, USEC is a dismal business in terms of it financial situation - HOWEVER - they are an existing producer with customers, and thus could find many ways beyond Centrifuge to satisfy the SWU demand --- the stock action in USEC on Friday suggested a change of information somewhere in the marketplace --- so buying USU shares for a "Trade" could net you more money that SLX in the next 6 months....

the CEO of the French Uranium company commented in PUBLIC that "GE was sniffing around USU" --- why on earth would GE be looking to do something with USU???? hmmmm - here is my two cents: maybe they could come in and "help USU" by replacing the Centrifuge Project with a Silex project - thus USU would ultimately never go down the path of it "less that viable centrifuge effort" (rumors are that it will be a dismal failure). and GE would never have to get its hands dirty actually enriching uranium ---- and since USU has just raised hundreds of millions of dollars --- they can fund the plant with capital and GE wouldn't have to raise any capital of its own --- maybe a bit to Conspiracy Theorist on my part --- but its gots possibilities.

cheers and good investing







 
gulf
post Posted: Nov 5 2007, 07:34 AM
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In reply to: JustinS007 on Sunday 04/11/07 11:33am

Hi Justin
It would not take much to get SLX up 60% with a "good" announcement.We will get some updated information and timetables at the AGM -looking at the USEC chart I think I will stay with SLX .

 
Highway101
post Posted: Nov 4 2007, 11:46 AM
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In reply to: JustinS007 on Sunday 04/11/07 08:33am

Thank you for the replies J and SWP,

I was indeed espousing a relatively short term trading view in regards to USU. Using basic TA tools, it looks like USU is trying to put in an intermediate term bottom. A low risk investment would be to wait a bit to see if the low at around 8 $US holds and throw long there for a nice 50 to 60% gain over the next few quarters. IMO a conservative approach for US investors to get into the uranium bull market. As a value investor I like to buy stocks on sale, and USU is about 70% off right now. Thanks for pointing out the European shares, I will look into them and find out if I can purchase these through my broker. By the way, I will continue to hold a core position in SLX in a retirement account, and plan to add on significant downlegs.

Respects,

JP

 
JustinS007
post Posted: Nov 4 2007, 08:33 AM
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In reply to: seawindpilot on Sunday 04/11/07 08:18am

Hi SWP,

And maybe I'm a bit bitter toward USEC, but if they didn't employ that certrifuge "guru" (his name escapes me) at the time they ditched SLX they may have found themselves in the position that GE are in now, but 1 or 2 years further advanced. Going back over this thread there was a lot of discussion about the apparent stupidity of the USEC decision at the time.

All is not completely lost for USEC yet, but it is very difficult to see them holding a position of influence in the enrichment market beyond about 2010 - that's assuming they have influence now.

Still, as highway101 intimates, traders and short termers could still make substantial gains from USEC in the short term while the bluff and cover approach continues, or by exercising some TA on the dips and rises. This approach is not for me though.

J.

 
seawindpilot
post Posted: Nov 4 2007, 07:18 AM
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QUOTE (Highway101 @ Saturday 03/11/07 05:11pm)



Hi Highway

further to the reply from Justin.

USU are not actually making any money they are struggling in survival mode and what surpluses that they can create are being ploughed into their alternative technology. Which at best and if successful is only a minor improvment on urencos centrifuge process which at present is the worlds best. Presently USU are using the worlds most outdated and inefficienct enrichment system (gas difussion) which is a uneconomic dinosaur. USU would have certainly expired several years ago had it not been for the favourable Russian HEU with which they have been able to support themselves. But even that is now nearing it end.

So to be invested in them now is not going to allow you to reap and benefits in the meantime as you have espoused. If you wanted to be invested in enrichment at the moment you would need to go to the Uk or Eu markets and buy urenco or BNF.

Please no flowers when USU is finally put to rest as surely it will.

Aw ok maybe BLACK TULIPS. ph34r.gif

 


JustinS007
post Posted: Nov 3 2007, 03:42 PM
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In reply to: Highway101 on Saturday 03/11/07 03:11pm

Hi Highway101

Too true your comments about whether or not the fundamentals are better if the trend is against you. Such has been the trend with SLX for the last few months.

I don't agree with your sentiment re USU though. As yet they have no confirmed supply deals for their enriched product and they have anything but a monopoly in the industry. URENCO and others of course are already producing enriched product, and if you agree with many of the reports lately then we won't see supply deficiencies until at least 2012. If this is the case then it should fit nicely with the time SILEX enrichment comes on line (should!).

In the meantime USU have to take market share from existing suppliers (assuming they don't have commissioning difficulties which pushes back timing) and this could prove difficult if they are unable to offer price and or quality benefits. Naturally their competitors will be out there right now looking at closing long-term supply agreements which detract from USU's opportunity to provide product. And whilst the "American Centrifuge" may be somewhat more efficient than other centrifuge processes around the world (though I've seen no tangible evidence of this - especially considering the high cost of many associated processes), USU have to pay back the escalating capital construction costs which may make it difficult for them to compete on price grounds when their competitors have already completed payback for their facilities.

I think a very close look at the fundamentals of the enriched material supply industry give an understanding as to why USU's price is heading south.

The difference between USU and SLX as I see it, is that one is pouring billions of $ into a known inefficient process and may be first to an uncertain market, whereas the other is investing in improved efficiency and looking to enter the market at a time of product under supply. The advantages and disadvantages of each position are obvious.

But of course none of this insists that investors and traders will approach either or both rationally and only considering the pure economics of each.

J.

 
Highway101
post Posted: Nov 3 2007, 02:11 PM
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In reply to: JustinS007 on Saturday 03/11/07 06:57am

Hi Justin,

Your post made me think of an old trading truism that you can be right but who cares if you still lose money. Yes, long term SLX may be the future of enrichment, but right now USU has a virtual monopoly in the field. So while an investor sits in SLX for two years waiting for the tech to get off the ground, he pays a large opportunity cost by not being invested in a stock that is actually enriching U308 for profit, and is the only game in town. Crude oil going over 100 US$ per barrel is only going to magnify the need to get more nuke plants back on line. Guess who's going to supply most of the enriched U308 for at least the next two years? I would rather make money in USU during that time than be right with my world view of how SLX is better tech. You don't have to marry the stock, just date it for a couple of years. Just my thoughts, am probably wrong, always enjoy reading what you have to write.


Respects,

JP

 
JustinS007
post Posted: Nov 3 2007, 06:57 AM
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In reply to: JustinS007 on Tuesday 30/10/07 02:46pm

USU up nearly 10% in the US last night. I guess you can't blame US investors for being patriotic, but in the end they will lose their money:

QUOTE
USEC Provides American Centrifuge Lead Cascade Test Program Update
4:32p ET November 1, 2007 (Business Wire)
The Lead Cascade test program of the American Centrifuge technology is producing results that achieve USEC (NYSE:USU) test program objectives, marking another important step in deploying this highly efficient uranium enrichment technology.


The rest can be obtained from:

http://research.tdameritrade.com/public/st...=100-305b5726-1

Just a shame that their tech costs twice as much to operate as a SLX plant (proposed) and has or will cost them more than twice as much (up to 5x) to build. And of course the enrichment levels / purity can't be compared. Oh must I go on.

QUOTE
In early 2007, USEC completed a comprehensive review of the cost of deploying the American Centrifuge Plant and established a target cost estimate of $2.3 billion. This target cost estimate included amounts spent on the project through early 2007 and estimates for cost escalation, but did not include financing costs or a reserve for general contingencies.
SLX facility with similar SWU output is looking like costing between $500 million and $1 billion. No comparison there either.

OK, so SLX is about 1-2 years behind commercial deployment, but wouldn't you rather wait knowing that you were on board a much more superior product? Buying into USEC is typical of fast-buck investors / traders not prepared to sit back and enjoy future growth. It's just a shame that their fingers will be burnt.

J.

 
golfnvester
post Posted: Nov 1 2007, 10:53 AM
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In reply to: seawindpilot on Wednesday 31/10/07 11:04am

Nice move up already....

Perhaps part of the deal was that CitiBank kept $25MM of the securities.....so getting them at the "low price" of $7.70 per share assures them a profit when they place future inventory with investors.....

but for Silex, knowing that the "Sharebuild" wouldn't drive down the price due to 'lack of subscriber' was the other advantage.....

holding Long & Strong....and feeling good tonight in Yankee Land smile.gif

 
 


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