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Deals and expansions stir amid slumbering spot uranium market
Mon, Jan 12, 2009
Featured Article, Uranium Articles

By Luke Brocki - Exclusive to Uranium Investing News and U3O8.biz

The spot uranium market is flat this week, though that’s not the same as saying there’s nothing going on in the nuclear sector. On the contrary, the latter is teeming with deals and expansions, as nuclear producers around the world vie for dominance in an ever-expanding market.

First, the numbers. Price publisher Ux Consulting left its spot price estimate flat at US$53 a pound U3O8, as did rival publisher Tradetech, at US$52 a pound U3O8. UxC says the market is quiet and could stay that way for a number of weeks, seeing as sellers are in no hurry to attract buyers. At least not in a big enough hurry to warrant lowering prices to boost demand. Uranium’s long-term price is also unchanged this week at US$70 a pound U3O8, a level at which it’s expected to stay through the end of January.

Gazing into the crystal ball behind futures pricing, we see long-term uranium prices are expected to continue on their gentle rise. March futures are trading at US$56, June futures are worth US$57, September futures US$58, December futures US$62, and March 2010 futures are trading at US$64 a pound U3O8.

According to a weekly uranium update from Toll Cross Securities, things are looking brighter in the junior uranium sector. The Toll Cross Junior Uranium Index is up nearly 17% to 171.74 from 142.90. And according to a selection of stocks watched by Toll Cross, junior explorers are responsible for much of those gains. Week-over-week, junior explorers gained 37%. In fact, it was a great week for the entire sector, with advanced explorers gaining 27%, production visibility companies jumping 35%, and producers gaining 12%.

Now to the aforementioned deals and agreements, the bulk of which were in Africa this week. French nuclear giant Areva made headlines this week, after being awarded a license to build and operate a uranium mine in Niger. BBC News reports the Imouraren mine is to become Africa’s biggest uranium mine and the second-biggest and mine in the world. According to Areva, mining could commence as early as 2012, with an initial production projection at 5,000 tons of uranium a year.

According to fin24.com, a South African online financial news provider, Namibia’s uranium production is poised to continue hitting record levels, as the country’s third uranium producer gears up to come online by 2010. Forsys Metals plans to add to its presence in the producer field through one of its subsidiaries, Valencia Uranium. The site in question lies some 45 kilometres from the Rossing Uranium mine near Swakopmund, which has been online for some 33 years.

Fin24.com says as of mid-December, Rossing Uranium was on track to produce more than 4,000 tons of yellowcake in 2008, a level unseen since 1990. In November, Paladin Energy announced its Langer Heinrich mine, also in Namibia, had produced more than 650 thousand pounds of U3O8 during the September quarter alone.

Finally, the Canadian Press reports Canadian uranium juniors Crosshair Exploration and Mining Corp. and Target Exploration and Mining Corp. have agreed to combine their businesses to form a single uranium producer and developer.

A joint news release from the two companies states that market sentiment toward coastal Labrador has been affected by the Nunatsiavut government’s moratorium on uranium mining. So rather than throwing money at an uncertain project in the region, it seems Crosshair would rather spend it on the development of a Target project in Wyoming. The deal is still subject to regulatory approval for both companies
http://www.uraniuminvestingnews.com/1249/deals-and-expansions-stir-amid-slumbering-spot-uranium-market.html