Fifth, we are progressing our Texas projects as planned. We want to return to production in Texas as well. So I’ll detail some of those thoughts.
Let me start with a macro side and look at what we now know to be a difficult soft market.
The present market fundamentals with regarding uranium are not strong. Uranium spot price recently dropped below $50 and this week is been hovering around $49 and changed.
The soft market is sort of typical for this time of the year, so it wasn’t unexpected. Part of the reason is still the Department of Energy. Their uranium sales are between 5 million and 6 million pounds per year or approximately 10% of the annual U.S. reactor consumption was expected. A recent secretarial determination that could increase sales to about 15% of annual U.S. reactor consumption wasn't as expected.We must temper those numbers with the belief that there is still not enough excess supply to balance what will happen in the coming years. With regard to the Russian HEU expiration and long-term demands international, with regard to what happened at the DOE. Let me just say that the Mining Associations, Uranium Associations are working with the Department of Energy to get back to a balanced approach.Long-term fundamentals still remain very strong. There is an increasing demand. Let just look what happened recently. Japan restarted the Oi reactors 3 and 4, and we expect this will pave the way for more restarts in Japan.China started the new reactor in the first quarter of this year and they have seven more planned in 2012 or into 2013. Reactors are expected to come online in other high growth countries such as South Korea, Russia, Argentina and India.Of equal importance there are four reactors under construction in Georgia and South Carolina. Although, all that’s going on and increasing the long-term demand there is a decreasing supply.
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