Posts on this website are general "tips" and nothing more than that and should never be used to make an investment or trading decision. All information should be carefully cross-checked against official sources for accuracy.

The Cheapest Australian Uranium Play with JORC resource

April 27th, 2009


The Kvanefjeld REE deposit in southern Greenland is growing rapidly to become one of the largest deposit of REEs in the world. It has the potential to meet the world’s rapidly growing demand for REEs, and in doing so, can become a major contributor to the Greenland economy for decades to come. At Greenland Minerals and Energy, we believe that Kvanefjeld will be truly world class mineral deposit that can be developed in a responsible, environmentally conscious manner, to become one of the world’s major sources of Rare Earth Elements – “Specialty Metals for a Greener World”.

GGG has almost as much uranium as EXT. Plus they have 2/3 more value in their Rare Earth Element… the looming battle ground for the move to the electron based economy. So for a very small market cap of around $35m you get 200m pounds of uranium and one of the world’s largest REE deposits.

Uranium Shortage Looming

April 25th, 2009

Globally there are 436 reactors in operation today, annually consuming some 168 million
lbs. of uranium to produce 16% of the world’s electricity. A further 151 new reactors
are either under construction or planned, plus 266 more units proposed. Adding only
those being built or planned would yield a dramatic 35% increase in the number
of plants worldwide. If we simplistically assume the average new reactor consumes
as much fuel as those currently operating, the industry must source an additional
59 million lbs. of uranium per year on an ongoing basis — and likely within the next
decade. This represents a staggering 55% increase in mine output from today’s levels.
Moreover, the startup of a new reactor causes a surge in demand as initial cores
typically require 2–3 times annual requirements during the ramp–up phase.

Read more

Where will all this uranium come from? Is it even possible?

Spot Uranium Prices Continue To Rise

April 24th, 2009

Spot Uranium Prices Continue To Rise

Deutsche Bank analysts have been among the most bullish on price prospects for uranium since the crash from the US$138/136/lb price peak in 2007. As such, their price projections have found widespread attention, both by media and investors. Alas for those investors who took too much guidance from earlier price projections, spot U3O8 prices went their own way, in the opposite direction, hitting US$40/lb earlier this month.

On Deutsche Bank’s earlier projections we should be at US$100/lb, if not US$125/lb by now.

No doubt, were we to ask Deutsche Bank analysts what exactly went wrong last year they would respond with “Lehman Brothers”. Ever since the US investment bank went into receivership last year, its administrators have tried to monetise on the inventory of yellow cake that came with all other assets, but the result has been that a relatively small uranium market was dogged by the impatient overhang of some 500,000 pounds of yellow cake, seeking a willing buyer.

As it turned out, buyers proved too eager to get their hands on the “stuff” at too large a price discount and the Lehman inventory has now been officially taken off the market, indefinitely. Long story short: overall activity in the U3O8 spot market has picked up considerably since March, and prices are now rising again as well.

Last week, industry consultant Ux Consulting was the first to make a small increase to its weekly spot price benchmark. The small price rise marked the first upward move since November last year. Fellow-consultant TradeTech has since followed up with its own price increase. UxC has now followed suit with another increase; spot up US$1.50 to US$42.00 a pound.

It would seem spot uranium prices are back moving upwards and US$40/lb may have been the bottom for the foreseeable future.

Deutsche Bank analysts currently forecast an average price of US$70/lb this calendar year, implying prices should rise a lot further from here (Lehman Bros ambitions notwithstanding). The average price forecast for 2010 currently stands at US$80/lb.

According to FNArena calculations, spot uranium has thus far averaged around US$45.50/lb so far this calendar year.

Deutsche Bank analysts recently attended the World Nuclear Association (WNA) conference (in Sydney this time) and drawn further long term confidence from the fact that governments in Korea and China remain ambitious in terms of increasing power generation from nuclear reactors. They continue to highlight that Australia’s Paladin Energy (PDN) remains the only high growth uncontracted uranium producer without ownership by a government or a utility (though Areva does own a minority stake).

However, the future does not hold bullish prospects only for the sector. The analysts mention in this week’s brief update on the uranium sector that technological developments are now allowing effiency improvements at US utilities (meaning they can generate more power with the same nuclear capacity) and in addition the US Department of Energy (DOE) is expected to push the overall market into oversupply again from 2011 onwards.

On this basis, current price projections are for an average spot price of US$70/lb in 2011 and for US$65/lb in 2012 and a return to US$50/lb from 2013 onwards.spoturanium

Big Day Out

April 23rd, 2009

It was a big day for many of the Australian uranium companies.

The underperformance of GGG seems to relate to their share issue at 20c….

“Greenland Minerals & Energy raises A$5 million for Kvanefjeld Project royalty repurchase

Greenland Minerals and Energy Ltd (ASX:GGG) has advised that they have received verbal acceptances to place 25,000,000 shares at 20 cents a share to raise $5,000,000. The funds will be used to increase general working capital and to facilitate a potential repurchase of the royalty outstanding on the Kvanefjeld project. Greenland’s flagship project is Kvanefjeld, a multi-element deposit located near the southwest tip of Greenland. Through focused exploration, Kvanefjeld is rapidly growing to become one to the world’s largest undeveloped deposits of rare earth elements, uranium and naturally occurring sodium fluoride, commodities with long term forecasts for strong demand increases. …”

Greenland Minerals & Energy

Spot Uranium On The Rise Again

April 21st, 2009

Spot Uranium On The Rise Again
Has the spot uranium market finally managed to break the spell from the Lehman Brothers inventory overhang?

Last week’s small price increase in the weekly spot price benchmark as set by industry consultant Ux Consulting -up US50c to US$40.50/lb- has been swiftly followed up by a bigger price increase by fellow-consultant TradeTech; up US$1 to US$41.50/lb. This would suggest yellow cake changing hands at US$40/lb earlier this month is likely to have been the bottom, at least for now.

Analysts at Canada-based Raymond James nevertheless warn investors should not get too excited just yet. The stockbroker’s uranium specialists describe their own position as “near-term cautious” on uranium and when it comes to buying equities they’d advise investors remain “selective”.

Raymond James’ top picks in the uranium sector include Paladin (PDN) which also has a stockmarket listing in Toronto, Nufcor, First Uranium and Hathor.

Lehman Brothers confirmed last week what would have been the worst kept secret in the industry: following some minor initial sales, it still had about 500,000 lbs in U3O8 equivalent stored somewhere and as buyers had proved only interested in heavy discounts it had decided to put off any further sales indefinitely. While this has not completely removed the market overhang, it has taken away the short term threat of more selling pressure in the uranium market.

According to some sources Chinese buyers have recently entered the market and purchased more than 1 million lbs of product on the spot market, possibly adding to the short term positive momentum. Analysts at the aforementioned Raymond James, however, predict little movement in the spot U3O8 price in the weeks ahead.

Meanwhile, TradeTech reports the past week saw four transactions being concluded totaling just over 1 million pounds U3O8 equivalent. Moreover, reports the consultant, each of these four transactions appear to have been concluded at progressively higher prices.

Overall market activity has now picked up remarkably with TradeTech calculating total volume in deals done for the first three weeks of April now stands at over 4.3 million pounds U3O8 equivalent as compared to 2.2 million pounds for the entire first quarter of 2009.

The last time spot uranium prices had moved higher was in the fourth week of November last year.

TradeTech’s longer term price indicator has remained unchanged at US$70/lb.

Govt. Minister Martin Ferguson calls for more Uranium exports

April 10th, 2009

Minister backs uranium mining
9th April 2009, 14:30 WST

Australia should be a bigger supplier of the fuel, Resources and Energy Minister Martin Ferguson said today.

“We are a major uranium supplier and we should be an even bigger supplier of uranium,” Mr Ferguson said today at a resources industry briefing in Melbourne.

“We need to guarantee that we mine uranium here in Australia with safe hands and export to countries who are prepared to use it with safe hands.”

Australia could add $17 billion to gross domestic product by 2030 by maximizing suppliers to meet rising global demand for nuclear energy, the Uranium Association said last month

WA last year scrapped a six- year ban on uranium mining, though Queensland last month ruled out lifting its ban.

I take the view that over time the position in Queensland will change, Mr Ferguson said.

Uranium mining is a fact of life and I am a big supporter of the industry.

Australia has three producing mines in South Australia and the Northern Territory.