Australian (ASX) Stock Market Forum

Uranium price update thread

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AK ... thanks ... basically I blew up ... while I my hit loss ration is (was) better that 50% my MM and Risk plan was terrible.

Just in the process of rebuilding .... slowly!
 
Even better, check this:

http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSL1564323120080715

Spot uranium price climbs with Nufcor raising cash
LONDON, July 15 (Reuters) - The spot price of uranium, used to fuel the world's nuclear plants, rose $4 to $64 per pound this week, according to the web site of Ux Consulting, a leading publisher of uranium prices and forecasts.

Traders said the price UX-U3O8-SPT was supported by London-listed Nufcor Uranium Ltd (NU.L: Quote, Profile, Research, Stock Buzz) currently raising money to buy uranium by offering shares during a road show in Canada.

"The only true demand currently is Nufcor, they are on their road show so let's see what they come back with," a uranium trader said.

The North American road show would finish on Thursday, traders said.

The holding company owns around 2.3 million pounds of uranium stocks for investment purposes and at the end of June it said it would raise more cash to up its holding.

Traders said the firm was looking to raise around $75 million, buying some 1 to 1.4 million pounds of uranium.

"But they have to convince their shareholders to collect the money ... the amount is subject to fund raising," the trader said.

At least 90 percent of the net proceeds of the offering would be used to buy uranium, traders said, and an application had been made to list the shares on the Toronto Stock Exchange.

The market is still waiting for the exact amount and the offer price of the shares.

Nufcor Uranium was not immediately available for comment.

The two largest funds holding uranium are Canada's Uranium Participation Corp. (UPC) (U.TO: Quote, Profile, Research, Stock Buzz) and Nufcor -- which together own around 8 million pounds of uranium.

(Reporting by Anna Stablum; editing by Nigel Hunt)
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exgeo said:
Does any one of the more technical types have a way to construct a uranium index of Aussie companies? This guy does one for Canadian companies:

www.techuranium.blogspot.com/

I guess it would not be so hard if one had charting software? I'm not basically a tech guy, so I don't have the software myself. Here's a list of companies that ought to give some indication of what's going on in the sector:

ACB AEE AEX AGS ARU BLR BMN CTS CUY DYL EKM ENR ERA EVE EXT FSN HDG HDN MDX MEP MLI MRO MTN MXR PDM PDN PEN PNN SIM SLX TOE UEQ UKL UNO UNX URA UTO UXA WCU WHE WME

Any thoughts? Gotta be close to the bottom, post Opes and hedge-fund divestments etc. It'd be nice to know HOW close! My own subjective opinion is that they've hit bottom, tested it and started to creep up again.
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Regarding an Australian Uranium Index, Intierra posts their own index. It can be found by clicking here: www.intierra.com/aui_graph_current.html Although, they might have turned it into a subscriber service.

Also, Another good source for all kinds of uranium information can be found by clicking here: www.uraniumstrategies.com

Susan
 
I can publish it on this forum daily or whenever there is some interesting development. BTW it consists of only 5 stocks PDN, ERA, DYL, BLR and SMM. I will create today one with the shares from the list to see if there are any significant differences.

I usually use this other chart to gauge the Aussie uranium market breadth. It seems like we are close to the bottom.

http://img510.imageshack.us/img510/135/screenhunter443sa4.jpg

I run similar indexes for banks, oil and gold market in AUS.
 
bmgold said:
I can publish it on this forum daily or whenever there is some interesting development. BTW it consists of only 5 stocks PDN, ERA, DYL, BLR and SMM. I will create today one with the shares from the list to see if there are any significant differences.

I usually use this other chart to gauge the Aussie uranium market breadth. It seems like we are close to the bottom.

http://img510.imageshack.us/img510/135/screenhunter443sa4.jpg

I run similar indexes for banks, oil and gold market in AUS.
Click to expand...

A nice chart bmgold, I've only started following U stocks recently.

gg
 
bmgold said:
I can publish it on this forum daily or whenever there is some interesting development. BTW it consists of only 5 stocks PDN, ERA, DYL, BLR and SMM. I will create today one with the shares from the list to see if there are any significant differences.

I usually use this other chart to gauge the Aussie uranium market breadth. It seems like we are close to the bottom.

http://img510.imageshack.us/img510/135/screenhunter443sa4.jpg

I run similar indexes for banks, oil and gold market in AUS.
Click to expand...

Well... if your interested in posting towards perhaps a larger audience using a greater girth of companies within your Australian Index, I can send an email to the GM of uraniumstrategies.com and see if he can create a special page and login for you to upload there.

Let me know if your interested...

Susan
 
Does anybody know whether Ospraie, the collapsed commodities-focussed hedge fund was heavily into Canadian uranium stocks such as Mega, Cameco, Denison and so on? Most are heavily down in the last week or so (like 30%) but I haven't noticed any equivalent selloff in Aussie uraniums. At least not in the ones I hold anyway (AGS, EME, SMM, TOE).
 
Up $5 to $53 last week....

November 14, 2008–The uranium market was beset with negative news from the production sector again this week. A host of producers including Cameco, Denison, Uranium One, URI, and First Uranium indicated that they are either scaling back financial expenditures or production forecasts. These developments, along with a decrease in spot supplies in recent weeks, have contributed to further strengthening of the current spot price.

Significant demand continues to emerge with off-market buyers acquiring over one million pounds U3O8 equivalent in five transactions over the past week, with each transaction concluded at successively higher prices. The buyers were utilities, intermediaries, and producers. Buyers are willing to pay higher prices to secure material and sellers, sensing that the momentum has shifted back in their favor, are raising offer prices with each new inquiry from buyers. As a result, TradeTech’s Spot Price Indicator rose this week to $53.00 per pound U3O8, up $5.00 from last week’s indicator.
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http://www.uranium.info/index.cfm?go=c.page&id=103
 
The price per-pound of resource is about 2-3 times that for recent transactions such as Valhalla (VUL), Omega (OMC), Redport (whose main asset was Lake Maitland before the takeover by Mega Uranium) and the sale of Kintyre by RTZ. However, Lake Maitland is more advanced than these other projects.

This might have interesting consequences for the likes of Toro (TOE) who also have a similarly-sized calcrete uranium project in WA at a similar or slightly more advanced stage of development.

Mega Uranium To Sell 35% of Lake Maitland Resource for US$49 Million to Japan Australia Uranium Resources Development Co. Ltd. And ITOCHU Corporation

Toronto, Canada, February 27, 2009 – Mega Uranium Ltd. (MGA-TSX) (“Mega Uranium”) is pleased to announce a significant milestone for the company welcoming JAURD (the Japan Australia Uranium Resources Development Co. Ltd.) and ITOCHU Corporation (ITOCHU) as its proposed 35% joint venture partners to advance the development of its Lake Maitland Project. Lake Maitland, located in the Eastern Goldfields area of Western Australia, contains a national instrument 43-101 compliant Inferred Resource of 23.7 million pounds U3O8.

JAURD is a Japanese company mandated to acquire uranium resources in Australia on behalf of its shareholders, being three Japanese utilities -- The Kansai Electric Power Company, Incorporated (50%), Kyushu Electric Power Company, Incorporated (25%) and Shikoku Electric Power Company, Incorporation (15%) -- and ITOCHU Corporation (10%), the world’s second largest uranium trading house.

Stewart Taylor, President of Mega Uranium, commented, “After many months of negotiations, we have reached a favourable deal and are pleased to welcome our Japanese partners to help us advance the Lake Maitland Project to production. JAURD’s expertise in the uranium industry and their specific experience of the Australian uranium market make them an ideal partner for us in this project. Their shareholders, Kansai, Kyushu and Shikoku, will have access to uranium produced at Lake Maitland for their own use and ITOCHU will be able to participate in additional uranium off-take arrangements from the project”.

Farm-In and Joint Venture Agreement

Mega Uranium, JAURD and ITOCHU have entered into a non-binding memorandum of understanding in respect of the proposed farm-in and joint venture, which provides for aggregate payments of US$49 million by JAURD and ITOCHU to Mega Uranium in order to earn their aggregate 35% interest in the Lake Maitland Project.

Mega Uranium, JAURD and ITOCHU will enter into a definitive farm-in and joint venture agreement which initially provides that JAURD and ITOCHU will make payments to Mega Uranium for feasible studies at Lake Maitland Project in order to earn 35% interest in the Project, with further payments in the due course, subject to favorable results in feasible studies, including those for the alkaline leaching process.

Entering into a definitive agreement farm-in and joint venture agreement by the parties is subject to a number of conditions, including satisfactory completion by JAURD and ITOCHU of their due diligence, approvals of the transaction by the boards of directors of Mega Uranium, JAURD and ITOCHU, approvals required under the Foreign Acquisitions and Takeovers Act 1975 and related Australian regulatory approvals.

Chairman and CEO of Mega Uranium, Sheldon Inwentash, stated, “I am very pleased with the progress made by Peter McNally, our Vice President, Project Development, and his team at Lake Maitland in the past few years. We completed early prefeasibility studies and advanced metallurgical work ahead of the Western Australian government’s positive stance on uranium mining, which positioned Mega to be at the forefront of uranium activity in the State and allowed us to demonstrate the viability and robustness of this project to JAURD and ITOCHU.

Mega Uranium is well financed and, together with JAURD and ITOCHU, can meet the capital expenditure requirements for the Project as set out in the recently completed and announced Lake Maitland scoping study (see press release dated October 21, 2008).
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I have beome interested in watching uranium stocks (AGS looking likely) but having difficulty in finding a general uranium price web page similar to Kitco for gold. Any suggestions

cheers explod
 
Yeh, UXC seems to provide good info' especially where and when new reactors are to be built and which countries are becoming interested in U. I have kept an eye on this site for sometime but haven't seen too many comments or reports about Australia becoming interested in this commodity.
 
From Page 17 of Today's presentation by Toro TOE:

The Australian uranium market has fallen from EV/Resource values of around A$10-A$12/lb to around A$4/lb today
Recent corporate level transactions completed between A$8-A$10/lb (egKintyre, Honeymoon & Lake Maitland)
Click to expand...
 
Uranium price has slowly ticked lower under $50 recently surprising many analysts who continue to be bullish long term. Many here thought POU would remain bouyant for ever due to the percieved supply/demand scenario. Many were wrong. From what I had read $75 seemed a reasonable long term price with $95 the upside. I din't think we'd see sub $50 again, but maybe the GEC has been a factor also.

I'm only left with PDN as a long term position.

A recent article for consideration off Share Cafe:

Uranium: Short, Long and Stocks
BY ANDREW NELSON - 22/09/2009

Week by week the uranium spot price ticks a little lower, this week it's down a noteworthy US$2.00 to $42.50 reports uranium market consultant TradeTech. Yet while the spot price continues to slide, the longer term prospects for uranium continue to improve, at least in the eyes of some brokers.

In part, the brightening outlook of uranium is due to the lower levels of supply that the current tight times are causing. But as RBS points out, there is likely to be a sharp increase in demand in the years ahead as increasing nuclear consumption begins to kick in.

The single biggest problem facing the short-term market is the doubt being cast by the imminent release into the market of as much as 1,200 tonnes of UF6 by October 15 by the US Department of Energy. This doubt is seeing an increasing number of spot sellers deciding to take pre-emptive action and sell existing inventories before this new material finds its way into the market.

This move to lower prices has seen a number of buyers take advantage, with a total of five transactions, totalling approximately 900,000 pounds U3O8 equivalent, taking place last week. TradeTech reports that active demand is made op almost entirely of discretionary buyers, with many more still on the sidelines waiting for even lower prices.

This near term price weakness stands at stark contrast to the longer-term view held by RBS, with the broker remaining bullish on the outlook for uranium over the near and medium terms. The broker notes the growth in nuclear power capacity continues to increase each year, with high construction rates being driven by China and Russia, which it expects to continue.

Compounding the benefit that this increasing demand outlook will bring is the broker's view that current logistical, statutory and operating bottlenecks in key production regions such as Canada, Australia and Namibia, will place significant pressure on future supply plans. In fact, RBS expects the uranium market will move into a supply deficit as soon as 2014 .

So despite the last month's downward trend in the spot price, the broker sees the underlying fundamentals of increasing supply and tightening demand coming to bear soon. RBS is not only forecasting an upward trend for the term uranium price, but it also sees returning strength in spot uranium prices as well. The broker expects this trend will soon emerge and will carry on until at least 2011. At that point the broker expects the price will peak at US$95/lb as the market begins to seriously tighten ahead of the expiry of the US-Russian highly enriched uranium (HEU) programme in 2013.

Of the two big Aussie uranium plays (outside the diversifieds), RBS thinks Paladin Energy (PDN) offers the prospect of higher returns, but of course, also higher risk. Following a recent $429m private placement, the broker thinks the balance sheet is in good shape, with FY10 gearing at 16% and the company moving into a net cash position by the end of FY12. The broker also likes the company's longer-term uranium exposure given its production base is now diversified, with strong production growth and resource upgrades likely.

Paladin will still need to deliver on its production targets, though, and there is potential acquisition risk given the broker sees the company as likely to acquire assets in the next 12-18 months to lock in some kind of production growth after Langer Heinrich Stage 3 comes on-line. RBS's recommendation on the stock is Buy, with the FNArena sentiment indicator sitting at 0.3. There are just two Buys on the stock including the one from RBS, while there are also five Holds.

Yet while the broker sees Paladin as providing good leverage to the longer-term uranium picture, it also sees peer Energy Resources of Australia ((ERA)) as providing some good leverage to a soon to improve spot. The broker sees the stock as having much less risk on a short-term basis given its current high degree of earnings resilience and strong cash flow.

RBS expects to see expanding margins over the next few years as lower-priced legacy contracts roll off the books and the company is able to take advantage of higher spot and term prices. The broker is also counting on positive news flow over the near to medium-term, as more drill results and details on growth projects are released. That said, RBS has had to push through some downgrades to its near-term earnings forecasts on the back of higher AUD forecasts.

Still, the broker's Buy call is maintained and it is a call, much like Paladin, that is shared by only one other broker. Other than these two Buys, there are three Holds and three Sells on ERA, which make for a reading of minus 0.1 on the FNArena sentiment indicator.

TradeTech's mid-term price benchmark has remained unchanged at US$55/lb. Its longer term price benchmark remains at US$65/lb.
 

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