Regarding the most recent earnings loss ($91.3 million in third quarter) the Denison CEO said the following:

On the uranium side, it’s not that we couldn’t sell, but we used our discretion and chose not to sell into the spot market during the traditionally slow summer period.

Spot prices current hover around $45 and $47.

Currently Denison share prices sit at $1.40. The somewhat recent Denison downgrade by RBC (from $1.70 to $1.25) on October 1st is starting to look rather prophetic

In a press release sent out on November 2nd, Paladin announced the appointment of Garry Korte as CFO. He will begin his new role on November 16th. From the press release:

Garry brings a broad range of finance skills to the Company and we believe his corporate finance, commercial and international experience will add value as Paladin continues to grow.

Earnings Downgrade

Despite the timing, the downgrade of Paladin was unrelated to the hiring of Garry Korte . RBS analyst Lyndon Fagan lowered his earnings forecast by 46%, all the way down to $14.4 million in American currency. The reasoning behind this was his expectation of Paladin not being able to meet production forecasts. He bases his assumption on historical misses and lowered investor confidence. From Fagan:

‘Missing targets over the last two years has resulted in negative sentiment, and a general lack of investor confidence in delivery of future production. In our view, this is the reason the stock is now trading below our fair value.’’

The Story:

Coming across the newswire at the beginning of the Sept 30th session was an announcement from Denison. They will begin a 7500 metre drill program on the Wheeler River Property located in northern Saskatchewan.

The Wheeler property itself is a joint venture with three other companies. Denison controls 60% of the interest, Cameco 30% and JCU Exploration owns the final 10%.

The budget for the drill program is $1.5 million. 15 holes will be drilled.

The market itself reacted favourably during the Sept 30th session and in after-market trading. But the following morning RBC cut their DNN price target from $1.70 all of the way down to $1.25. This represents more than a 35% cut.

This has impacted the stock in the short-term trading, as DNN is down close to 10% on higher than average volume during the October 1st session.

Uranium producer Cameco has had a bite taken out of it and this time not due to uranium prices.

Centerra Gold, which is controlled by Cameco, received a downgrade from Stephen Walker at RBC Capital on June 10th. The stock was downgraded to sector perform from its previous grading of outperform.

Walker’s price target also declined $2, down to $10, which might I add is still over 20% higher than the share price before the downgrade.

Walker’s reasoning behind the downgrade was the uncertainty over the ownership and tax rates for the Kumtor mine located in the Kyrgyz Republic. Off of this news Cameco approximately 8.5% tuesday. Currently Cameco has gained back roughly 1% today.

Centerra on the other hand has dropped from a high of $8.20 on friday to a current price of $6.90.