Uranium is now poised for a strong rally according to the Royal Bank of Canada Capital Markets who have told their clients that:

“We think the sentiment of the uranium market has changed substantially in a very short period . . . our 2008 market balance estimate has shifted to a deficit (from a balanced market) and we think the spot market is set for a strong rally”.

Their rationale was predicated on things such as Uranium One reducing production, AngloGold Ashanti warning it may have to declare ‘force majeure’ and Uranium Participation entering the market and purchasing 900,000 pounds on the spot market. Their forecast for 2008 stands at $110/lb which should bring a smile back to the faces of those who have held on through the downturn. They also report that the long term expectation for both the Ux Consulting Company and TradeTech remains at $95/lb. All grist to the mill, to read the article in full just follow this link.

Moving across to LONDON, Reuters carry a report that the British government have made 18 more sites available for the next generation of nuclear power stations. Mr John Hutton, Secretary for business said that:

“Planning applications for new plants are likely to focus on areas in the vicinity of existing sites and so it’s welcome that the NDA is making its significant land and other assets available to the market,”

It looks like a sound move so far but it will be interesting to see how they handle nimbyism (not in my back yard) which will no doubt have a roll to play.

Mr John Hutton also said the government may sell its shares in British Energy, worth around 2.0 billion pounds, however he doesn’t say where he intends to spend this cash. Sadly we can see it being consumed somewhere in the public sector, a town hall extension here, a trip or two to an exotic location or the hiring of a few more enablers and creating other non-jobs. To read this article in full please click this link.

And finally to Denison Mines Corporation. When we reviewed this stock on the 12th February 2008, it was trading at $6.40 and we were hoping to pick it up at about $6.00, however it moved faster than we did and is now trading at $8.81. If you managed to bag a few then well done you must be sitting on a canny profit by now and in a short time too! Denison may come off a little from here but don’t worry about it, the upside potential looks a lot brighter to us than downside, which we think is limited to a small amount of profit taking.

Have a good one.

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