Spot price volatility expectedUranium One in the news:
Spot price volatility expected
November 14, 2007
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Uranium's spot price continues to climb, while buyers and sellers
squabble over prices. Industry indicator Ux Consulting raised its
price by US$2 to US$92. Rival indicator TradeTech held its price
steady at US$93 a pound U3O8. Both companies project the metal's
long-term price to remain at US$95 a pound.
Analysts foresee continued volatility in the market, as both buyers
and sellers look to maximize profits of their respective transactions. At this stage, sellers are refusing to let the metal go at current prices, anticipating more supply crunches and thus higher prices in the near future.
But the latest Ux Weekly newsletter had the indicator flip-flopping on the future of the uranium market: just one week after a bullish
outlook, the indicator warned of a potential period of falling prices, as more and more uranium projects come online in upcoming years.
The National Post newspaper reported that speculators currently hold
16 to 18 million pounds of uranium and that they may flee the sector
if the aforementioned new projects meet demand for the fuel. Indeed,
recent supply crunches at some of the world's biggest producers were
largely responsible for the metal's price gaining strength.
The most recent crunch came in Kazakhstan, where a shortfall of
sulphuric acid---the main chemical used during in-situ leaching of
uranium from ore---led Canadian producer Uranium One to drastically cut its production forecasts.
But on Tuesday, Uranium One's Kazakh partner Kazatomprom, the world's
third-largest uranium producer, said it plans to build a sulphuric
acid plant by 2010 to meet the shortfall. The plant is expected to
produce 500,000 tonnes of the acid per year to meet the needs of
Kazatomprom and its joint-venture partners.
The Resource World composite uranium stock index rose 34.06 points
Tuesday, or 2.36 per cent, to 1,475.35. The index is based on the
performance of nearly 100 uranium companies, but is clearly heavily
influenced by the recent Rio Tinto jump that happened after that
company rejected a takeover bid from rival BHP Billiton. At present,
the index cruising at heights unseen as uranium prices return to form
after last summer's crash.
On the TSX, Vancouver-based explorer Tribune Uranium Corp. was up 12
cents, or 16.9 per cent Tuesday, to 83 cents, after announcing
preliminary work on the company's exploration and drill program in the Reed Lake mining district of Manitoba.
Halifax-based explorer Ucore Uranium jumped nine cents, or 11.3 per
cent, to 89 cents, after finding radiometric anomalies at its Bokan
Mountain project in south-eastern Alaska during an airborne survey.
Magnum Uranium Corp. gained 8.5 cents, or 19.5 per cent, to close at
52 cents on very high trading volumes, after announcing a non-brokered private placement of up to one million units at 45 cents apiece.
A slew of other winners emerged at closing Tuesday, many of them
without reportable news from their pressrooms: ESO Uranium Corp.
gained four cents, or 10.5 per cent, to 42 cents; Fjordland
Exploration Inc. jumped 5.5 cents, or 20.8 per cent, to 32 cents,
International Enexco Ltd. enjoyed a 35-cent gain, climbing 13.3 per
cent to $2.98; Mountain Boy Minerals Ltd. gained seven cents, or 17.5
per cent to 47 cents; and Northern Canadian Uranium Inc. gained six
cents, or 10.9 per cent, to 61 cents.
Diamonds North Resources Ltd. lost eight cents, or 9.5 per cent, to 76 cents, after announcing it is rethinking its 2008 drilling program. The company failed to get a drill turning this year on its Banks Island property in the Northwest Territories. Eloro Resources Ltd. was down eight cents, or 14.3 per cent, to 48 cents, after announcing a private placement worth $1 million.
Finally, on the news front, investigative weblog The Raw Story
reported Tuesday that the United Nations nuclear watchdog is ready to
go public with its report on Iran's alleged nuclear weapons program.
According to The Raw Story, the International Atomic Energy Agency
will submit the report to the UN on Wednesday and release a restricted version to the public.
The West is desperate to have Iran stop enriching uranium. It fears
Iran's plans to develop nuclear reactors are a cover for the secret
production of nuclear weapons. But Iran insists it just wants
electricity and has so far ignored UN Security Council demands to halt uranium enrichment, insisting it is legal under the Nuclear
Non-Proliferation Treaty.
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