Wish I had less CXX and more URE
Uranium Market
How low can yellow cake go?
The price of spot uranium fell US$0.50 this week to US$42.00/lb U3O8, while the long-term
price remained at US$62.00/lb U3O8. According to Ux Consulting, the market remains soft, but demand is expected to begin to
pick up in H2/10 as it did during the same period the year before, also considering that at US$42.00/lb the uranium price is at an
important support level. Aside from this, the sector appears poised to go nuclear with M&A activity. A number of senior
uranium producers have significant cash balances and have expressed their desire to make acquisitions. Casting about for
industry-leading companies that could easily be takeout candidates, Canaccord Adams came up with four names:
Deep Yellow
(DYL : ASX)
– with a cornucopia of uranium deposits of different styles south of Extract Resources’ (EXT)
Rössing South
and west of
Paladin Energy's (PDN
) Langer Heinrich; Extract – now that the company’s share price has backed off
dramatically;
Mantra Resources (MRL) – continuing to grow its excellent Mkuju River project in Tanzania; and
Ur-Energy
(URE)
– getting closer and closer to successful permitting of its Lost Creek in situ uranium mine in Wyoming. Given the future
