Uranium on a Tear:
The price of uranium is up again due to increased concerns regarding supply. The commodity price has increased dramatically over the past two years up from $20.00 a pound in December 2004 to $64.00 a pound today and continues to power higher.
The recent announcement by Cameco (CCO-T) regarding the flooding at their Cigar Lake Mine and the uncertainty about when that project will be able to get back on line has created a fear of a long term supply shortage. Cameco is the global leader in the production of uranium and had planned to have Cigar Lake up and producing in the very near future, it is rumored that the flooding at the mine halt production for up to 5 years.
Other producers will benefit from the price increase as will any companies that can bring on new production in the relatively near future. There is a high potential that the uranium price could reach $100.00 a pound in the next year or so.
The shortage in current production is being made up from surplus military supplies, those supplies are finite and will likely run out in the next 4-5 years.
According to the World Nuclear Association there are 442 reactors operating, 28 under construction, 62 planned and 161 proposed. If all of theses new plants are completed the number of reactors will increase by 56% from current levels.
There is a huge opportunity for investors in the uranium sector, the commodity does not trade in an open market and investors will have to look at individual companies.
Cameco in the largest producer in the World and even with the set back at Cigar Lake offers excellent exposure to the sector. Cameco supplies approximately 20% of the global demand and holds the largest reserves with 550 million pound of combined proven and probable reserves. Cameco has just increased he annual dividend by 25% per share to 20 cents from16 cents.
Denison Mines (DEN-T) is an emerging second tier producer that has been on the acquisition trail over the past few months in an effort to vault up in the production ranks. DEN recently completed a merger with International Uranium Corp and is in the process of the take over of Omegacorp Limited an Australian uranium miner.
SXR Uranium One (SXR-T) is currently developing to properties the Dominion mine in South Africa and Honeymoon mine in Australia. The company expects top have the South African mine in production in early 2007 with an initial capacity of 2 million pounds of uranium annually moving to 4 million pounds by 2011. The Australian mine in forecast to be in production by 2008 with a production capacity of 800,000 pounds annually.
The uranium market appears to have the potential for a sustained move higher as demand continues to increase while supply is slowly coming on stream.
For more information go to www.campbellreport.com
The recent announcement by Cameco (CCO-T) regarding the flooding at their Cigar Lake Mine and the uncertainty about when that project will be able to get back on line has created a fear of a long term supply shortage. Cameco is the global leader in the production of uranium and had planned to have Cigar Lake up and producing in the very near future, it is rumored that the flooding at the mine halt production for up to 5 years.
Other producers will benefit from the price increase as will any companies that can bring on new production in the relatively near future. There is a high potential that the uranium price could reach $100.00 a pound in the next year or so.
The shortage in current production is being made up from surplus military supplies, those supplies are finite and will likely run out in the next 4-5 years.
According to the World Nuclear Association there are 442 reactors operating, 28 under construction, 62 planned and 161 proposed. If all of theses new plants are completed the number of reactors will increase by 56% from current levels.
There is a huge opportunity for investors in the uranium sector, the commodity does not trade in an open market and investors will have to look at individual companies.
Cameco in the largest producer in the World and even with the set back at Cigar Lake offers excellent exposure to the sector. Cameco supplies approximately 20% of the global demand and holds the largest reserves with 550 million pound of combined proven and probable reserves. Cameco has just increased he annual dividend by 25% per share to 20 cents from16 cents.
Denison Mines (DEN-T) is an emerging second tier producer that has been on the acquisition trail over the past few months in an effort to vault up in the production ranks. DEN recently completed a merger with International Uranium Corp and is in the process of the take over of Omegacorp Limited an Australian uranium miner.
SXR Uranium One (SXR-T) is currently developing to properties the Dominion mine in South Africa and Honeymoon mine in Australia. The company expects top have the South African mine in production in early 2007 with an initial capacity of 2 million pounds of uranium annually moving to 4 million pounds by 2011. The Australian mine in forecast to be in production by 2008 with a production capacity of 800,000 pounds annually.
The uranium market appears to have the potential for a sustained move higher as demand continues to increase while supply is slowly coming on stream.
For more information go to www.campbellreport.com
posted by Grant | 2:10 PM
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