Camino:

In my opinion, mid-term would be about 2 to 2 1/2 years in a more liquid (normal) market, however, if the right deal comes along tomorrow, these guys will pull the trigger.

Interestingly, I read today in the Financial Post (below) that Cameco is on the prowl for investments. This is interesting considering they have (the now flooded) Cigar Lake which was suppose to supply 10% of the world's uranium. Whether we fit the bill is another story, but...

Cameco in hunt for acquisitions

Uranium giant Cameco Corp. is gearing up for acquisitions and new strategic investments as the share prices of its competitors plummet back to earth amid the global credit crunch.

In the heady days of 2006 and 2007, the uranium market went on an absolute tear as the price of the radioactive metal shot up to US$138 a pound. As it did, companies such as Uranium One Inc. and Paladin Energy Ltd. spent billions of dollars on acquisitions and challenged Cameco for supremacy in the sector.

Jerry Grandey, Cameco chief executive, was widely criticized at the time for standing pat and shying away from deals that he thought were much too expensive.

Today, he looks like a visionary for avoiding those top-of-the-market deals. The share prices of those other producers have fallen anywhere between 65% and 90% in the past year, and seem to fall faster every day.

Meanwhile, Mr. Grandey is ready to step in and be an industry consolidator once again.

"The time from Cameco's perspective has come," he said in an interview, noting that the company recently did deals in Australia and Niger. "We believe that there are opportunities out there that we need to be looking at quite diligently."

He said there will be plenty of chances to form joint ventures with smaller companies that need financing for their projects and have no way to raise any in these credit markets. Other companies can be simply taken over as they trade at dirt-cheap valuations.

"You look at something like Uranium One trading at just $1.25 a share, and there are some synergies there [with Cameco] in Kazakhstan and the United States. So I would think they are definitely kicking the tires," said Orest Wowkodaw, an analyst at Canaccord Adams.

The mid-tier producers, including Uranium One, Paladin and Denison Mines Ltd., have all been hit by the sinking uranium price, which dropped to US$49.00 a pound this week. But they have also failed to live up to market expectations, Mr. Wowkodaw said, leading to a drop in investor confidence.

Cameco has been caught up in the market turmoil as well in the past few months, and has lost more than half its market value. But Mr. Grandey is not overly worried, as the company sells nearly all its uranium in fixed-price, long-term contracts with reliable customers. He also figures the nuclear industry will hold up if there is a global recession, because countries will still need power.

But he is much less optimistic about the rest of the mining industry. He says it will go through tough times as the economy undergoes a "pretty massive slowdown," leading to lower commodity prices and lack of financing for projects.

"I think we're just beginning to see the effects of the lack of liquidity in the system. You're beginning to see businesses downsizing, retail sales declining. All of that will reduce demand for underlying commodities," he said