Home » Uranium Spot Price Up to $49/lb

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1. 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

   Comment by Nick Outram — May 12, 2009 @ 12:14 pm

2. …sorry, my last post appears truncated.

   …probably Capitalised at

   Comment by Nick Outram — May 12, 2009 @ 12:18 pm

3. 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.

   Comment by Nick Outram — May 12, 2009 @ 12:23 pm

4. 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.

   Comment by Uranium Stocks — May 12, 2009 @ 8:25 pm

5. 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)

   Comment by Warwick Hughes — May 13, 2009 @ 2:24 am

6. …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.

   Comment by Nick Outram — May 13, 2009 @ 8:36 am

7. For over 2 yrs now Nick I have made weekly checks on a watchlist of 4 dozen or so ASX uranium stocks. Your questions are indeed pertinent and I can only assume there are Chinese groups picking up this and that uranium stock on the ASX now. Just quickly running down my list by decreasing Market Cap - ignoring the v large ERA and PDN - SMM gone to PDN. To check these stocks, the ASX has alphabetical pages where you can access all ASX reports, there is also usyally a link to a company website.
   http://www.asx.com.au/asx/research/listedCompanies.do?coName=U
   To chart the share price history on various timescales, a quick free way is the Yahoo Finance page, just enter the asx code followed by ax as in PDN.AX You can choose various timescales.
   EXT MC +$Bill -+100 mill lb resource in Namibia near Rossing, already has 3 large stakeholders, RIO, Kalahari (AIM) and latest Polo (AIM) not sure if there is a significant Sino stake.
   DYL MC$330Mill, just moved sharply higher on surprising high grade Namibian drilling, can not see top 20 list but PDN had 20% in 08, has a sizeable Qld presence which is of course still a “no-uranium-mining” State.
   AGS MC $215Mill, could be producer in 2010 from Four Mile ISL mine, AGS has 25% of JV with huge US group Gen Atomics. No major Sino interest on AGS top 20 list.
   BMN MC $190Mill. Battered by legal issues in 08, +100Mill lb resource near Rossing, not as high grade as EXT, good expl potential in string of prospects nearby, I hear a raising is close, insiders hold 30%, not sure if any serious Sino interests on register, I hold some. BMN Dirs hold a stake in the Namibian tenements so any big buyer would want to buyout their stake first then plan to buy what they want of BMN. On the ASX you have to declare as a Substantial Holding at 5% then you can not pass 15% without making a T/O bid, as I understand it.
   BKY MC $137mill (allows for incr shares from Polo placement + current raising), specialised building resource position in Spain, Polo is onboard with 10 mill shs - there is also an issue on now, can not see any obvious Sino interests in top 20, I have a few.
   TOE MC $114mill, spinoff from the old Oxiana after buying out Nova, main resource shallow ISL projects at Lake Way south of Wiluna WA which could produce soon, resource only ~30mill lbs total, OZL have just over 50% so a Sino group could put in a bid to them. Has not been a great success since floating - better buys elsewhere.
   ARU MC $106mill U + REE near Alice Springs, Sino group already heavily bought in.
   EME MC $67mill A spinoff ex Resolute, majors hold ~65% (incl Denison 8%) so a tight register + PDN is a major JV partner in NT. Resource not huge at ~24mill lbs but also has 44mill lbs V2O5.
   MTN MC $60mill, is focussed on the 80mill lb Mt Gee underground orebody in Sth Aust - 5th largest undevel orebody in Aust. Ran into problems with the Govt in 08 over disposal of drill samples (a beat up)and contractors damaging a mineral site in a park, local enviros are hostile. Signs are that relations with Mines Dept are on the mend, certainly the recent chart suggests so. The Sino group CITIC have 16.6%, Qld res group Talbot have 19.8, so register not exactly open but MTN v undervalued in my view if you assume Govt will let them proceed normally through to mining.
   Will work further down the list Saturday and can add another comment on weekend . So far the main candidates for serious Chinese buyins - are I would guess BMN, MTN and I suppose DYL. IMHO, the AIM group Polo has brilliantly trumped anbody else by their raids on the ASX these last few months.
   Interesting uranium news today, Australian Foreign Sec Stephen Smith blunders by tabling sensitive docs in parliament.
   Smith blunder: Uranium export plans tabled
   http://www.abc.net.au/news/stories/2009/05/14/2570046.htm
   Included is info that Govt is talking to Chinese about “..boosting exports of uranium from BHP Billiton’s Olympic Dam mine in South Australia.” This has the Greens and the left enraged.
   I recall another surprising news item re Australian uranium from Sept 2007 when Vlad Putin was in Sydney for the APEC meetings and signed a deal was Aust Govt to buy our uranium, not sure what quantities or the timescale. At the time only Sth Aust and the NT allowed U mining, Qld and WA still had bans, since then the WA ban has been lifted but I suppose could be reinstated if Labor regains Govt in 2012. Qld has just returned a Labor Govt and still has the ban.
   Considering that reprocessing of uranium from old Russian weapons is all that is propping up supply for the next few years, I was intrigued that Putin saw the need to sign a deal with distant little Australia. Here is a press article.
   Howard, Putin sign uranium export pact
   http://www.theaustralian.news.com.au/story/0,25197,22378006-601,00.html
   I thought at the time, “..and exactly where Prime Minister Howard, is this uranium for sale to Russia going to come from ?”
   Back to the present - anybody hoping to buy U3O8 production from the huge expansion of BHP’s Olympic Dam, would not want yellowcake before 2020 in my opinion. Better look to small companies if they want product sooner than that.
   This URL points out the huge scale of the proposal,
   Olympic Dam EIS: Impact of the world’s biggest mine
   http://www.independentweekly.com.au/news/local/news/general/olympic-dam-eis-impact-of-the-worlds-biggest-mine/1501992.aspx
   the EIS has just been lodged with SA Govt, I am sure green protest groups will have a field day opposing this and that, new endangered species will be discovered. It would IMHO be a miracle if the EIS was approved by end 2010. Not to mention the global turmoil and BHP have just blown ~$4Bill on their recent Ravensthorpe laterite nickel disaster.

   All for now, WSH

   Comment by Warwick Hughes — May 14, 2009 @ 6:35 pm

8. 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.

   Comment by Warwick Hughes — May 17, 2009 @ 5:00 am

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