Uranium, a Raging Bull
- Thread starter Yippyio
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Well, Uranium Futures are currently sitting at US$148
Go you mighty nuclear powered bull...
Go you mighty nuclear powered bull...
Last night the close was $143.00. Still no real effect on the share prices? Obviously there are are other elements at play within each stock. But it's like it's almost a non event. Could it be that the market being at all time high's, has pushed the good Uranium prices underneath the radar. That's the only reason I can come up with.
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Dec 07 and Jan 08 delivery, immediate payment, finished at US$150.00 (U308 swap).
Kauri
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Todays West Australian...
The race is on for uranium companies such as Deep Yellow and Marathon Resources to develop their projects within the next three years to cash in on the booming uranium market, according to a Far East Capital report to be released today.
After comparing the potential profitability of emerging yellowcake producers based on standard industry economics, Far East Capital uranium analyst Warwick Grigor said there was fundamental value in emerging producers but companies needed to fast-track projects if they were to maximise the peak of the price cycle.
The spot price for the radioactive ore has climbed nearly 180 per cent in the past 12 months to a record closing price of $US120 a pound last week, while Nymex December uranium futures are trading at $US153.90/lb.
“Overwhelmingly the conclusion is that the economics are real and companies should be pushing ahead full steam to develop their projects,” Mr Grigor said.
“The biggest winners on our table and in the stockmarket are those lowgrade companies that we had been dismissive of two years ago. Since then the uranium price has quadrupled, catapulting these companies into enviable positions.”
He estimates that if all 19 Australian potential uranium producers were to reach production it would increase uranium supply by 17,000 tonnes a year, or up to 30 per cent over the next five years. If combined with increasing global supply, this could drag the uranium price back below $US100/lb.
“This means that the highly leveraged, low-grade companies will need to be up and running as early as possible to maximise the peak of the uranium price cycle, sometime between today and three years time,” he said.
One of the hurdles will be the high capital costs of up to $300 million to develop many of the low-grade projects.
The report suggests that this could be a significant issue for Acclaim, Bannerman, Deep Yellow, Toro and Uranex, while better-placed companies include Contact, Energy Metals, Monaro and Uranium King.
Mr Grigor warned many of the floats now hitting the market were opportunistic plays and that it would be difficult for even potential producers to negotiate their way through regulatory and compliance issues in the three-year time frame. “The ones in the USA are probably the most likely to go ahead because of the greater reliability of the data and the historical information ... but those mines are unlikely to big ones,” he said.
Mr Grigor said he was constantly being asked if the uranium sector was “another dotcom boom” and the unreserved answer was no because it was possible to run fundamental analysis.
“You can estimate rates of production, you have a market price for the product and you can reasonably estimate capital and operating costs,” he said. “This is a bull market based on hard factual economics, not fantasies and what-ifs. The conclusion is that at these uranium prices there are enormous cash flows that can be made.”
Mr Grigor said there were still a number of unknowns in trying to determine the numbers for some companies.
The main assumptions used in the absence of official numbers included capital expenditure per tonne of capacity of $85 and a spot price of $US113/lb.
TRACEY COOK
The race is on for uranium companies such as Deep Yellow and Marathon Resources to develop their projects within the next three years to cash in on the booming uranium market, according to a Far East Capital report to be released today.
After comparing the potential profitability of emerging yellowcake producers based on standard industry economics, Far East Capital uranium analyst Warwick Grigor said there was fundamental value in emerging producers but companies needed to fast-track projects if they were to maximise the peak of the price cycle.
The spot price for the radioactive ore has climbed nearly 180 per cent in the past 12 months to a record closing price of $US120 a pound last week, while Nymex December uranium futures are trading at $US153.90/lb.
“Overwhelmingly the conclusion is that the economics are real and companies should be pushing ahead full steam to develop their projects,” Mr Grigor said.
“The biggest winners on our table and in the stockmarket are those lowgrade companies that we had been dismissive of two years ago. Since then the uranium price has quadrupled, catapulting these companies into enviable positions.”
He estimates that if all 19 Australian potential uranium producers were to reach production it would increase uranium supply by 17,000 tonnes a year, or up to 30 per cent over the next five years. If combined with increasing global supply, this could drag the uranium price back below $US100/lb.
“This means that the highly leveraged, low-grade companies will need to be up and running as early as possible to maximise the peak of the uranium price cycle, sometime between today and three years time,” he said.
One of the hurdles will be the high capital costs of up to $300 million to develop many of the low-grade projects.
The report suggests that this could be a significant issue for Acclaim, Bannerman, Deep Yellow, Toro and Uranex, while better-placed companies include Contact, Energy Metals, Monaro and Uranium King.
Mr Grigor warned many of the floats now hitting the market were opportunistic plays and that it would be difficult for even potential producers to negotiate their way through regulatory and compliance issues in the three-year time frame. “The ones in the USA are probably the most likely to go ahead because of the greater reliability of the data and the historical information ... but those mines are unlikely to big ones,” he said.
Mr Grigor said he was constantly being asked if the uranium sector was “another dotcom boom” and the unreserved answer was no because it was possible to run fundamental analysis.
“You can estimate rates of production, you have a market price for the product and you can reasonably estimate capital and operating costs,” he said. “This is a bull market based on hard factual economics, not fantasies and what-ifs. The conclusion is that at these uranium prices there are enormous cash flows that can be made.”
Mr Grigor said there were still a number of unknowns in trying to determine the numbers for some companies.
The main assumptions used in the absence of official numbers included capital expenditure per tonne of capacity of $85 and a spot price of $US113/lb.
TRACEY COOK
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we would be seeing a flow on to capital goods providers like MAH if uranium plays are about to splurge on equipment to rush build their mines. what other listed companies would stand to benefit?
bigdog
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Uranium exports could earn $10bn a year, says Labor
Encourging report today with labor position on uranium mining!
http://www.theaustralian.news.com.au/story/0,20867,21742434-5005200,00.html
Uranium exports could earn $10bn a year, says Labor
Ashleigh Wilson
May 16, 2007
A LABOR frontbencher has defended the party's decision to support the expansion of uranium mining while standing firm against the development of nuclear power in Australia.
Addressing a uranium conference in Darwin today, Opposition transport spokesman Martin Ferguson said nuclear power did not “stack up economically” and was unrelated to the ALP's decision last month to drop its long-standing policy against new uranium mines.
Mr Ferguson, the Opposition Transport, Roads and Tourism spokesman, acknowledged that the “world has moved on” in the uranium debate, and said ensuring safeguards to guarantee its safe use should be the nation's most important priority.
Martin Ferguson today urged 300 delegates attending the Australia's Uranium Conference to "turn that huge challenge into a reality".
"With uranium prices at US$113 a pound and global uranium demand growing rapidly to meet power generation needs in a carbon constrained world we have the potential to export $10 billion a year within the next decade," Mr Ferguson said.
A long-term supporter of nuclear power, Mr Ferguson said stakeholders needed to espouse the virtues of the Australian Nuclear Science and Technology Organisation (ANSTO) to turn the tide of public support.
He added: “Each country will choose the energy source that suits its need."
“Australia is an energy-rich nation, the envy of the world. The energy sources that we develop and utilise are what suits out economic future.
“Contrary to what some suggest at the moment, just because we choose to sell uranium to the world doesn't mean we need to have nuclear power in Australia. The issue of nuclear power enrichment in Australia is a separate debate.”
Mr Ferguson, who first entered the uranium debate as a young union official in the Northern Territory three decades ago, said the nation's younger generation was more open-minded about uranium mining than their parents.
“Older people have a different attitude to younger people in the Australian community at the moment,” he said.
“People of my generation .... in the broader community, there is a hesitancy. But amongst our younger people, especially in the context of the greenhouse debate, there is a willingness to actually debate the issue of uranium mining. The world has moved on both internationally and domestically”
Encourging report today with labor position on uranium mining!
http://www.theaustralian.news.com.au/story/0,20867,21742434-5005200,00.html
Uranium exports could earn $10bn a year, says Labor
Ashleigh Wilson
May 16, 2007
A LABOR frontbencher has defended the party's decision to support the expansion of uranium mining while standing firm against the development of nuclear power in Australia.
Addressing a uranium conference in Darwin today, Opposition transport spokesman Martin Ferguson said nuclear power did not “stack up economically” and was unrelated to the ALP's decision last month to drop its long-standing policy against new uranium mines.
Mr Ferguson, the Opposition Transport, Roads and Tourism spokesman, acknowledged that the “world has moved on” in the uranium debate, and said ensuring safeguards to guarantee its safe use should be the nation's most important priority.
Martin Ferguson today urged 300 delegates attending the Australia's Uranium Conference to "turn that huge challenge into a reality".
"With uranium prices at US$113 a pound and global uranium demand growing rapidly to meet power generation needs in a carbon constrained world we have the potential to export $10 billion a year within the next decade," Mr Ferguson said.
A long-term supporter of nuclear power, Mr Ferguson said stakeholders needed to espouse the virtues of the Australian Nuclear Science and Technology Organisation (ANSTO) to turn the tide of public support.
He added: “Each country will choose the energy source that suits its need."
“Australia is an energy-rich nation, the envy of the world. The energy sources that we develop and utilise are what suits out economic future.
“Contrary to what some suggest at the moment, just because we choose to sell uranium to the world doesn't mean we need to have nuclear power in Australia. The issue of nuclear power enrichment in Australia is a separate debate.”
Mr Ferguson, who first entered the uranium debate as a young union official in the Northern Territory three decades ago, said the nation's younger generation was more open-minded about uranium mining than their parents.
“Older people have a different attitude to younger people in the Australian community at the moment,” he said.
“People of my generation .... in the broader community, there is a hesitancy. But amongst our younger people, especially in the context of the greenhouse debate, there is a willingness to actually debate the issue of uranium mining. The world has moved on both internationally and domestically”
Re: BMN - Bannerman Resources
The editor of Stockinterview.com wants to do an article next week on;
"ASX listed Uranium explorers in Namibia"...
I'm his sorta local 'Clark Kent',but the 'kryptonite' in my pocket is slowing me down ;
so please add to the list below;
let me know ASAP ( briefly via PM)...the companies you know of in Namibia.
how far advanced & estimated resouces in pounds!
bmn, is top o' the list ...ern,,dyl,wme,nel,ext,............
thanx, capt.yellowcake Arghhhh!!
The editor of Stockinterview.com wants to do an article next week on;
"ASX listed Uranium explorers in Namibia"...
I'm his sorta local 'Clark Kent',but the 'kryptonite' in my pocket is slowing me down ;
so please add to the list below;
let me know ASAP ( briefly via PM)...the companies you know of in Namibia.
how far advanced & estimated resouces in pounds!
bmn, is top o' the list ...ern,,dyl,wme,nel,ext,............
thanx, capt.yellowcake Arghhhh!!
Uranium now $133LB http://www.stockinterview.com/
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I never thought it would happen...
Minemakers are talking about mining the uranium deposits that have been known to exist in North-East Tasmania since the 1950's.
I'm not sure exactly what's going on with this. I'm genuinely wondering if it's a hoax to distract the greens and get the pulp mill approved. Either that or Minemakers wants an environmental battle that makes the Franklin and Wesley Vale look like a friendly gathering for a Sunday afternoon bushwalk.
I saw an old van with a full set of triangles from "Dams" to "Mill" the other day neatly lined up along the back window. Perhaps they'll need to add "Mines" to the collection...
Minemakers are talking about mining the uranium deposits that have been known to exist in North-East Tasmania since the 1950's.
I'm not sure exactly what's going on with this. I'm genuinely wondering if it's a hoax to distract the greens and get the pulp mill approved. Either that or Minemakers wants an environmental battle that makes the Franklin and Wesley Vale look like a friendly gathering for a Sunday afternoon bushwalk.
I saw an old van with a full set of triangles from "Dams" to "Mill" the other day neatly lined up along the back window. Perhaps they'll need to add "Mines" to the collection...
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I never thought it would happen...
Minemakers are talking about mining the uranium deposits that have been known to exist in North-East Tasmania since the 1950's.
I'm not sure exactly what's going on with this. I'm genuinely wondering if it's a hoax to distract the greens and get the pulp mill approved. Either that or Minemakers wants an environmental battle that makes the Franklin and Wesley Vale look like a friendly gathering for a Sunday afternoon bushwalk.
I saw an old van with a full set of triangles from "Dams" to "Mill" the other day neatly lined up along the back window. Perhaps they'll need to add "Mines" to the collection...
Bloody hippies, don't they know that smoking dope is contributing to the Greenhouse effect.
Anyway, does anyone know what the position of the Tasmanian Government is regarding the mining of Uranium?
What?
Down from $140?
http://www.futuresource.com/quotes/...,time,last,chgoldsettle,open,high,low,asx,bid
Or up from $125?
http://www.kitcometals.com/
I'm not sure which price is right?
Here's the actual article re the $133.00 price tag. Thanks Kromey. Sounds like there is a 3rd auction to go. But that's what is confusing. There are spot prices now, and auctions. Have a look at the future source link also.
June 2, 2007
By Julie Ickes and James Finch
Uranium Auctions Drive Spot Price 11.5 Percent Higher
Two Auctions Down; Another on June 12th
‘Could Reach Well Above US$140/Pound’ by Monday
According to NUEXCO/TradeTech Uranium Spot History chart, the past three years have witnessed the most dramatic rise in the spot price of U3O8 since this consulting service began keeping records in 1968. Courtesy of Nuclear Market Review, a TradeTech publication. Changes in the weekly spot price are posted on the company’s website: www.uranium.info
COPYRIGHT © 2007 by StockInterview.com, Inc. ALL RIGHTS RESERVED.
Another wild week in the spot uranium pricing market broke all historical records, no matter how it is calculated. On Thursday night, Nuclear Market Review’s (NMR) month-end report announced US$133/pound. (We posted this on the front page of StockInterview.com as ‘Breaking News’ Thursday night.) Ostensibly, this was the final price for U3O8 auctioned by Mestena Uranium LLC on Wednesday when the sealed envelopes were opened.
But on Friday night, Nuclear Market Review marked the weekly spot uranium price indicator higher – to US$138/pound. This represents an increase of more than 11.5 percent from the previous weekly spot price of US$122.
Losing bids at Mestena were given another chance at a second auction on Friday to win the material they failed to buy on Wednesday, according to Nuclear Market Review editor, Treva Klingbiel.
During a phone call Friday night, we caught TradeTech chief executive Gene Clark between flights (he was on his way to Athens, Greece to make his presentation at the World Nuclear Fuel Market conference). “We issued a conservative increase to US$138 because Friday’s bids have not yet been announced,” Clark told StockInterview.com. “Our sources provided us with guidance of $138, but we believe the final sale could reach well over US$140/pound.” Clark cautioned, “Each auction has taken the spot uranium price higher, and we anticipate this could again occur at the June 12th auction.”
What then happens after June 12th? That’s when yet another auction – the third in less than two weeks – plans to offer 125 thousand pounds of U3O8.
TradeTech increased the consulting service’s long-term U3O8 equivalent price indicator on Friday to US$95/pound. This has been the market’s only month-end long-term price indicator reported, which others tend to utilize or report as their own.
According to Treva Klingbiel, “Long-term demand remains strong with 14 utilities seeking offers totaling approximately 26 million pounds U3O8 equivalent for delivery in 2007 – 2018.”
We have also observed a stronger increase in the spot uranium trading volume, after a hesitant start in 2007. As a comparison, spot volume to date was at about the same level as 1997. Yet by the end of 1997, more spot uranium was sold than at any other time during the ten-year period 1996 to 2006.
Chart courtesy of www.theinvestar.com which tracks both Canadian and Australian stocks. In the Canadian chart, 43 uranium companies – each with more than C$40 million in market capitalization comprise this weekly index. The Australian Index tracks 25 companies, which own uranium assets.
Matthew Smith of TheInvestar.com reports uranium stocks are suffering from lower lows and lower highs. This is generally a bearish indicator, but Smith pointed out, “After each new low, we only dip down less than one percent.”
Smith reports that the market needs an uplifting trigger to turn stock prices around. He pointed to additional changes in the spot weekly uranium price and possible deal-making with Energy Metals (NYSE ARCA: EMU) for a possible acquisition of that company.
As we believe, more consolidation is expected in this junior uranium mining space. Any significant drop in the price of uranium mining stocks at this point – especially those expected to become producers before 2013 – could lead to announcements of acquisitions, business combinations or mergers.
Previous comments from the chief executives of Denison Mines (AMEX: DNN) and Uranium One (TSX: SXR) suggest they have been waiting for a better time to make acquisitions. As has been found with most investors, no one really enjoys over-paying for their purchases.
Emark don't forget that the Nymex u308 price is purely financial and is not linked to the physical commodity itself so the Nymex price is $140 (which is your futuresource.com link) and the physical commodity is up from $125 to $133 which is what you should focus on IMO.
Cheers!
Champ
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answering my own question from the NEL thread - seems they do have index but not montioring it every day - any others found an Aussie U index that gets updated daily?
http://www.theinvestar.com/theinvestarsaustralianuraniumaverage.html
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ChampEmark don't forget that the Nymex u308 price is purely financial and is not linked to the physical commodity itself so the Nymex price is $140 (which is your futuresource.com link) and the physical commodity is up from $125 to $133 which is what you should focus on IMO.
Cheers!
Champ
I don't trade futures, but understand the settlement is a financial transaction.
I assume the transaction must be "linked" to the physical somehow, as the market introduced this futures contract to give the market pricing transparancy.
If there is no link at all to the physical, then the pricing mechanism has no basis: They might as well be widget futures as uranium.
Hi Rederob,
I agree with you in that the Nymex futures transactions should be linked to the physical commodity as it is with other commodities however it isn't at the moment unfortunately and that means that there is a danger of the two prices diverging enormously in the future which would cause a little confusion regarding the true value of u308 IMO.
Cheers!
Champ
Emark don't forget that the Nymex u308 price is purely financial and is not linked to the physical commodity itself so the Nymex price is $140 (which is your futuresource.com link) and the physical commodity is up from $125 to $133 which is what you should focus on IMO.
Cheers!
Champ
Thanks for the reply. So does this increase from $125 to $133 bode well for the short term prospects? (i.e enough positive sentiment to lift some our Uranium stocks in the short term). Hard to answer I know. Obviously long term, as Redrob has said fundamentals are in place for companies like PDN.
Now $138lb refer to my top link
