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« Cameco Corporation Bought PUTs Today | Main | Cameco Corporation Looking Overbought »
Tuesday
May122009

Uranium Spot Price Up to $49/lb

Uranium spot price 12 May 09.JPG
Chart courtesy of TradeTech


As we can see from the above chart the spot price of uranium had a nice pop up to $49/lb this week which is encouraging as it is watched closely by many in the uranium space. The following comments by TradeTech accompanied their weekly update:

The uranium spot market price jumped significantly this week due to robust buying interest. TradeTech’s Spot Price Indicator is $49.00 per pound U3O8, an increase of $4.00 from last week’s value on the basis of the most recently concluded transactions. Eleven transactions are reported for the week. Utilities were buyers in half of the transactions.

Over at The Ux Consulting Company the spot remained at $46/lb.

Over at the NYMEX the futures market shows little change with contracts for June at $44/lb, October at $48/lb, December at $50/lb and March 2010 at $53/lb.

Never the less the trend upwards appears to taking shape and hopefully it will continue to do so.

Our core position remains in place with the only additions being Denison and Crosshair a few months back. We are watching Extract Resources and hoping to make a purchase on a dip in the near future.

Cameco Corporation is still in the frame for a possible PUT trade however we have not moved yet on this one.








Sleep tight.

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Reader Comments (7)

Regarding the general price of Uranium Stocks: a back-of-the-envelope calcualtion I did last year revealed that the entire sector was probably Capitalised at

May 12, 2009 | Unregistered CommenterNick Outram

...sorry, my last post appears truncated.

...probably Capitalised at

May 12, 2009 | Unregistered CommenterNick Outram

sorry again it must be my use of the 'less than' sign in my posts above...

I'll try once more:

...probably capitalised 'at less than' $50 Billion and given the IEA has indicated a spend of something like one Trillion dollars per year is needed to meet future energy requirements this Capitalisation seems way way too low...

The fact is that you can buy a whole energy commodity supply sector for peanuts -pennies in the pound at current prices and if I where a Chinese leader that is where I would be putting my money, not into $Dollars that will only go down in value...

Nick.

May 12, 2009 | Unregistered CommenterNick Outram

We think that the Chinese will move on the uranium sector as they did on gold recently with a softly, softly approach taking stakes in all the quality operators.

May 12, 2009 | Unregistered CommenterUranium Stocks

I recall Chinese interests taking positions in ASX uranium stocks from 2006-07 but they were fairly gentle then, not like this latest move into 51% of LYC (a REE developer)

May 12, 2009 | Unregistered CommenterWarwick Hughes

...Mmmm, that's interesting you should mention LYC as I own a small chunk of them and bought some more after the rise as their future is now assured and they have some amazing assets. Discalimer: I'm Long this stock but would urge a look if you want to buy into a company that looks set to be a major REE (Rare Earth Metals) supplier in the coming years. (Also note that the Chinese have TRIPLED their intended wind-power deployment by 2020 and that I have read -not verified- that each 1MW turbine uses 1 ton of REE: Neodymium...)

On the Chinese front they are obviously seeking prize assets (like LYC) -which Uranium stocks are looking for funding, have great assets and might 'pop' if a 'Chinese Bank' suddenly stumps up the cash?

Nick.

May 13, 2009 | Unregistered CommenterNick Outram

Some smaller ASX stocks.
MRU MC $244mill is UK dominated group with a 40 mill lb resource at a good grade at Mkuju River in Sthn Tanzania. I missed this earlier.
ACB MC $59mill has a 98 mill lb resource in Botswana suitable for ISL or low cost heap leaching and seems to be proceeding towards a mine in a stable country. Early in May ACB announced a large placement of 50 mill shares (at a cheap price of 20c) in two tranches to parties including Polo - initially 16 mill then in June after an ACB meeting the remaining 34 mill. Polo will end up with 20% of ACB after June. These deals do not make it easier for any Chinese group to buy into ACB with their attractive solid sized resource.
EMA MC $85mill, has a 55 mill lb resource at Mulga Rocks NE of Kalgoorlie. They aim for 2013 production, note they have ~36 mill shares quoted but there are 231 million all up with a large tranche held by a founder, so they are taken into account in my calc of market cap. Obviously there are opportunities here for a large buyer.
WME MC $48mill have the Marenica paleochannel project in Namibia where they have 34 mill lbs and are exploring for hard rock U in alaskites. They have issued 51 convertible notes to raise $2.5mill which will eventually incr their issued shares by 36 mill to 396 mill. Judging by their activity they will need more finance this yr I would guess.
WCU MC $65mill, trying to open up old u mines in SE Utah, hoping for an approval soon - not sure if potential large enough for Chinese.
PEN MC $39mill, has prospects of developing U mines both in Wyoming and South Africa. In Wyoming they are targeting a resource of ~60mill lbs U3O8 for an ISL mine to produce ~ 1.5 mill lbs PA by 2012 - . In SA Karoo sediments they target a resource of ~120 mill lbs for a possible production of 3 mill lbs PA by 2017. A look at their top 20 holders list shows none over about 4% - looks a pretty open register. Could this be the sort of company the Chinese should be running the ruler over.
PNN MC $34mill has Sinosteel as a long-standing partner in the small (15 mill lb) Crocker Well venture in their Curnamona Project - eastern Sth Aust. That project is already 60% Sinosteel and I wonder if it is worth their while unless they have expl success and enlarge the resource radically. PNN has other diverse projects which can be difficult for markets to value.
BLR MC $31 mill has a u project in Colorado with 55 mill lbs ISL resource adjoining a project of the large TSX Uranium One. The companies are in talks re a JV - I am not aware of any Sino interest but I may have missed something.
UNX MC $21 mill, has a modest 30 mill lbs evenly spread between Tanzania and WA - they have had a "strategic partnership" with CNNC of China for over 3 years now. I wonder if the Chinese are really very interested. UNX does have expl ground near the good grade resource of MRU at Mkuju River in Sthn Tanzania. Need a larger find to be of a size to attract Sino interest.
DMA MC $10 mill is a small co with interests in coal, iron ore and early stage uranium exploration. A Shanghai group Henan Rebecca has bought into DMA at a premium - for reasons that are not clear. I suppose all will be revealed one day.
URA MC $5 mill is a midget that has failed for some years to negotiate their way into u resources in the "Stans" and East Euroland. Recently they have picked up expl ground around old u mines in NW New Mexico which shows more promise for them IMHO. Not aware of any Sino holdings.
That's it for the smaller ASX stocks - there are many more but nothing stands out today.

May 17, 2009 | Unregistered CommenterWarwick Hughes

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