Australian (ASX) Stock Market Forum

Uranium, a Raging Bull

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greggy said:
After speaking recently to a couple of directors in WA based uranium companies there is a strong feeling that Alan will change his mind.
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Do you believe what directors of uranium companies said to you?

The best way to get ride of him. I guess only the uranium lovers in WA has the capability to do this. Maybe we can help you, such as digging us some of his past, having an affair in RIO, beating up Cazaly guy, etc...

Oh, no, we don't want American style politic dirty tricks. But you can help WA state lib/national.....
 
mmmmining said:
Do you believe what directors of uranium companies said to you?

The best way to get ride of him. I guess only the uranium lovers in WA has the capability to do this. Maybe we can help you, such as digging us some of his past, having an affair in RIO, beating up Cazaly guy, etc...

Oh, no, we don't want American style politic dirty tricks. But you can help WA state lib/national.....
Click to expand...
I can't do anything from this end as I live in Melbourne. But perhaps you can in WA. There is a lot of serious money going into WA based uranium companies (takeovers etc).
 
From FN Arena:

China’s CNNC Looking Overseas For Uranium Supply
FN Arena News - February 15 2007

By Rudi Filapek-Vandyck

China National Nuclear Corp's English website doesn't mention anything about it so we'll have to trust the journalists at the local Xinhua press agency to report that the state controlled company has signed a strategic cooperation agreement with Sinosteel Corp to "jointly invest and explore overseas for uranium resources".

According to Xinhua, CNNC has posted a statement about this on its website, but as said above nothing is to be found on the English version of CNNC's corporate website (sorry, we don't speak Chinese).

Xinhua reports the deal is aimed at ensuring a steady supply of uranium for the country's growing nuclear power sector and follows a similar agreement with conglomerate the CITIC Group.

CNNC is China's largest nuclear power plant construction firm. The company currently operates three commercial nuclear power plants at Qinshan, Daya Bay and Ling'ao.

Xinhua also reports that the Chinese government is aiming to boost the country's nuclear power sector to avoid future power shortages. China is believed to generate circa 2.3% of its total energy needs from nuclear plants. This is scheduled to increase to 4% by 2020. If this goal would be achieved, the press agency reports, it would make China the world's fastest developer of atomic energy.

The latest update on the U3O4 spot price by Ux Consulting has left the price at US$75 per pound, unchanged from the previous week.
 
Uranium - How Much Tighter Can The Market Become?
21/02/2007 By: Rudi Filapek-Vandyck

Investors as well as producers and power utilities in the US will be closely watching the first open auction of uranium this week with one seller offering 100,000 pounds of U3O8 (uranium oxide) at so-called 'market-related pricing terms'. In the current context this means buyer and seller will agree on a bottom price with the final, higher price to be settled at the time of delivery, probably a few months later.


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The U3O8 spot price hasn't fallen once in nearly four years and chances of it happening in the coming weeks are widely considered nil, especially with the uncertainty of Cameco's flooded Cigar Lake project hanging over the market.

This week's auction will break the deadlock between buyers and sellers in the uranium market that has kept the spot price thus far unchanged for most of calendar 2007. How far will the price go up? Industry insiders believe a jump to US$80/lb from a current spot price of US$75 is a real possibility.

In the shadow of the first big auction of the year, analysts, market experts and representatives of the top companies in the sector will be attending a two day conference on uranium organised by Sprott Securities in New York and Toronto on Tuesday and Wednesday. No doubt the overall sentiment at the event will be very upbeat as far as the price prospects for the commodity are concerned.

FNArena has been fortunate to lay its hand on a copy of the 120 page industry report published by Sprott Securities ahead of the annual conference which this year takes place for the fourth time. The report provides us a rare insight into the latest observations and analysis by one of the highly regarded industry experts in North America.

Conclusion number one, according to the report, is that everybody, including Sprott, has continuously underestimated how tight the uranium market would become over the past few years. As far as Sprott is concerned, this is likely to be still the case.

An example: The World Nuclear Association (WNA), whose projections are relied upon by securities analysts worldwide, currently forecasts that combined primary and secondary sources of uranium supply will just meet global demand through 2012, at which time a "significant supply shortfall" will be in place.

However, current forecasts were made before the flooding of Cameco's Cigar Lake project which was projected to produce up to 12% of annual supply from 2008 onwards. Of equal importance is that the WNA forecasts are based upon the premise that existing production will not experience any disruptions, that scheduled production will be available on time (no delays) and at the anticipated scale, and that prospective production will ramp up relatively quickly.

Every experienced miner knows: chances of all of this happening on schedule are rather slim. In addition, the report points out the existing WNA model does not consider any impact from demand from investors/speculators or the fact that utilities themselves are attempting to amass internal stockpiles in anticipation of a fuel shortage within the next 7-10 years.

Some market participants have continuously downplayed the importance of speculators and investors in the uranium market, but Sprott displays no hesitance in the report, stating:

"Investment fund activity and continued accumulation from public entities such as Uranium Participation Corp and Nufcor Uranium have added a new layer of complexity to the uranium and UF6 markets. Though clarity lacks in the number and volume of transactions that this group of buyers have completed we estimate that between 12-15MMlbs of U3O8 equivalent has been taken from the market in the last 24 months. This accounts for between 5-7% of global uranium production. Though primarily sourced from inventories these actions add further tightness to the market and acts to set new base level pricing for the commodity. We anticipate that the current trend will continue as the uranium price continues to appreciate and supply scarcity persists."

In addition, Sprott estimates the top ten producers missed their production targets from existing operations by circa 8.5% in calendar 2006.

Sprott's skepticism regarding WNA forecasts seems to be in sync with the views of the world's largest producer, Canada's Cameco. At the recent World Nuclear Association conference, Cameco presented a paper suggesting uranium suppliers, including itself, were not ready for the impact that new reactor builds will have on the uranium market.

The paper assumed ten new reactors will be coming on-line each year, starting in 2010 for at least a 10-year period. Sprott believes current WNA forecasts do not take into account that these start-up reactors have to commence stocking uranium up to three years in advance - that is how long it takes to purchase the product and make it ready for usage in the reactor.

This means that some of the reactors scheduled for 2010 may already be in the market today trying to secure their first supplies. Sprott believes that as a result of this, critically low inventories at US utilities are likely to drop to even lower levels.

Other assumptions made in the report are: BHP Billiton's (BHP) Olympic Dam expansion will not be finalised before 2012 (two year delay) and remediation of the flooded Cigar Lake project will probably take three to four years (versus the one year Cameco management has conceded so far). The latter will involve re-engineering the mine and the mining method.

The report also states that close to 85% of global production is currently already contracted through 2012.

As far as production is concerned it would seem that Kazachstan remains the industry's main hope in the near term. Sprott believes state owned Kazatomprom and its partners should be able to quadruple production by 2010.

So where does all this leave the sector in the short term? Beyond this week's widely anticipated price jump, Sprott has penciled in an average uranium spot price of US$85/lb in 2007, with a further rise to US$95/lb in 2008, though this is considered to be likely too conservative.

"If the [uranium spot price] appreciation already witnessed this year is any indication", the report notes, "the uranium price could easily break US$100/lbs." In fact, one of the chapter titles in the report spells it out loud and clear: "Uranium Fundamentals – US$100 On The Doorstep..."

However, the main theme for the sector throughout 2007 will be consolidation, the report suggests. Last week SXR Uranium One and UrAsia Energy announced merger plans to become the number two in the sector. Sprott believes "the acquisition parade has just begun and will become a common theme in 2007".

Another major change is that the problems at the Cigar Lake project have cost the juggernaut in the sector, Canada's Cameco, its bellwether status. Sprott believes Australia's Paladin Resources (PDN), one of the few new major producers since many years, has now become the global bellwether for the industry.

Paladin is rated Buy. Until recently the stock carried the tag Top Pick but strong share price appreciation has caused a recommendation downgrade.

Sprott Securities anticipates a "robust" uranium market for the next few years, with plenty of opportunities for investors in the sector. However, gains are likely to be more modest from here on making stock picking necessary.

Sprott advocates investors should focus on three types of uranium stocks; producers, imminent producers and "development stories with fundamentally solid assets aggressively moving towards production".

Rudi Filapek-Vandyck is managing editor of FN Arena.
His ambition is to build the financial news service of the future. Continuous progress towards achieving this goal can be seen at www.fnarena.com (no costs, no obligations).
 
An interview with James Dines of the Dines Letter (US based tip-sheet). He discusses the reasons for the boom in price, why he thinks it is not a bubble and why a Uranium price correction is unlikely. Downloading to your PC and listening via media player is probably better than listening via the website (no easy way to fast-forward on the website. Free registration required). Go to this section:
Part 1 with James Dines, Laramide and Vane Minerals - Download MP3 (right click and select "Save Target As")
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http://www.minesite.com/webcasts/commodity_watch_radio.html#c412

The Dines letter:
http://www.dinesletter.com/
 
I think it`s too early to call that yet Halba
Let`s wait till after the ALP conference in April.
If/when Australia gets the green light to mine it could go full steam ahead.
It`s simply worth too much $$$$ to all concerned and the spot price could be $90+lb by then, however I do agree it is a lot easier in other countries but Australia has a very large piece of the pie.
cheers
 
Halba said:
nup aussies too slow at u mining forget aussie
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halba - i think PDN would agree with u - do you know where i can find a list of ASX listed stocks that hold interests in african uranium leases?
 
56gsa said:
halba - i think PDN would agree with u - do you know where i can find a list of ASX listed stocks that hold interests in african uranium leases?
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here's a few from the top of my head

PDN
EVE
BMN
OMC
MLS (finalising)
AEX
WMT
 
56gsa said:
halba - i think PDN would agree with u - do you know where i can find a list of ASX listed stocks that hold interests in african uranium leases?
Click to expand...


All the ones I have listed are in Namibia.

NEL/BMN/ERN/EXT/WMT/PDN/DYL/MLS
 
Originally Posted by exgeo
http://www.minesite.com/webcasts/co...radio.html#c412
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I liked even more if Australia will be the Saudia Arabia of Uranium, "Canada is well, maybe an Iran"!

NEL also have an early-stage project in Africa in addition to their advanced WA project. The African thing looks pretty high grade, but there is little historical info about from the earlier drilling. Most of the work will have to be repeated.
 
exgeo said:
I liked even more if Australia will be the Saudia Arabia of Uranium, "Canada is well, maybe an Iran"!

NEL also have an early-stage project in Africa in addition to their advanced WA project. The African thing looks pretty high grade, but there is little historical info about from the earlier drilling. Most of the work will have to be repeated.
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A large portion of NEL's rise IMO has been off the back of their Namibian tenements. Look when the announcement was released for the granting of their EPL's in Namibia and then watch a large jump in their SP.

The advanced WA project is great if they could do something with it. Forget WA. Maybe you can wait for WA long term.

WA= WAIT AWHILE.
 
nel's u tenements don't have any u ...it doesn't have any big radiometrics or anything lets see, paying $200m for nel is overvalued imho. ERN has 4 u tenements in nambia and its $35m. NEL's WA deposit will never be mined IMHO so its useless

not every tenement will have a commercial u deposit! u gotta be careful.


Forget aussies man just coz aus labour federal say its okay doesn't mean the states will approve..not to mention it has to go through the same rigorous approval/delays
 
kennas said:
Uranium up $10, but U stocks generally not flying. Must have been factored in. :confused:
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Institution might think $85/lb is as good as you can get for the rest of this year, they are selling on strong news.

A big price hike usually followed by many weeks of no movement of uranium price.

I guess the set back is temporary. The fundamental is still good.

Fear will subdue, and greedy will be back soon..
 

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