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« Cameco Corporation: No Production in 2011 for Cigar Lake! | Main | Government Bailouts: A Comical View! »
Sunday
Feb152009

Uranium Stocks February Update

Uranium Chart 16 feb 09
Chart courtesy of u308.biz.

As the above chart shows the current spot for uranium stands at $47/lb according to both the leading sources TradeTech and UxC, with the long term price indicator holding steady at $70/lb. Over at NYMEX the data remains spasmodic at best with the December 2009 contract trading at $56/lb and the December 2010 contract trading at $58/lb.

The battered uranium stocks sector has more or less been consolidating in a sideways motion following a recent hike in stock prices. It was good to see this increase however we need to see both the spot price and the long term price head north before this portfolio will look anything like respectable.

However there are a few bright spots such as this one reported by u3o8.biz

And just this week Uranium One [TSX: UUU] announced it has entered into a long-term agreement with a Japanese consortium, which includes Toshiba Corp., the Japan Bank for International Cooperation and the Tokyo Electric Power Company Inc., to purchase 117 million common shares of the uranium miner at $2.30 per share for a total of nearly $270 million.

Japan intends to build 13 nuclear reactors over the next ten years and is the world's 3rd largest nuclear power generator.


We will continue to look for bargains in this sector with the intention of picking up a few stocks here and there. 'Go gently' being the order of the day for us, however this sector looks extremely oversold and if there is a uranium stock that you have always wanted to add to your portfolio then starting now with a small purchase should work out well over the next two years.

Have a good one.

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Reader Comments (2)

what about the update on the cigar lake mine? I thought it was supposed to come out friday the 13th. Thanks John

February 16, 2009 | Unregistered Commenterjohn

Bob,

I appreciate and value your newsletter. It has been indispensable for keeping up with news on uranium.

I have a suggestion: You focus very much on technical analysis. However, there have been some major investments in the uranium sector recently - most notably by the Japanese - and these have not been discussed in detail, that I am aware of.

These strategic moves by Japan (and China to come) are what will drive future M&A activity in uranium. Investigating these further will put you ahead of the curve in a way that technical analysis never can.

why are the Japanese buying? how many plants do they have in process? what is the realistic timeline of those plants? (the japanese have built nuclear plants faster than anyone in the past - in as little as 5 years, vs. 10 typicall, according to my understanding). how much uranium are they securing in offtake agreements? how many nuclear plants will this fuel? can we learn anything about their future plans from the amt of uranium they are getting in offtakes?

All of these fundamental issues of the potential nuclear ramp up are ignored by Wall Street analysts, and you could truly carve out a niche by using your platform to explore these issues more fully.

Just my $0.02.

Thanks again.

February 16, 2009 | Unregistered CommenterJ

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