RGT +DEV x U308($113 us/lb)=$$$$$$ April 09, 2007
Uranium spot price surges past US$100-level
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VANCOUVER, BC -- (MARKET WIRE) -- April 9, 2007 -- The uranium spot price surged to a new record of US$113 per pound as buyers aggressively bid for a lot of uranium at a recent bell-weather auction in Corpus Christi, Texas.
The modest-sized lot of 100,000 pounds was offered by Texas-based Mestena Uranium LLC, a small privately owned firm, while the aggressive bids came from both utilities and investors. The company's auctions are closely watched in the industry because they've resulted in strong price increases in the past, including a previous auction in late 2006.
According to a report by The Northern Miner, senior executives at Mestena were "surprised" at the range of bidders participating in recent auctions, which include hedge funds looking to buy in anticipation of future price increases, as well as various utilities.
At the time of the auction (the deadline for the sealed bids was April 3rd) spot prices had reached US$95 per pound, up from US$75 per pound in February. The record spot price set at the April auction is a mere US$2 shy of the all-time high in inflation-adjusted dollars. The long-term uranium price remains unchanged at about US$85 per pound.
Industry analysts had predicted that spot prices might surpass the US$100-level this year because of supply shortfalls and rising demand as government agencies and utility companies seek "green" long-term energy solutions. On the supply side, flooding at Cameco's Cigar Lake mine in Saskatchewan and the long lead-times to construct new mines also contribute to the bullish outlook for uranium.
U3O8 Media Inc.'s Website www.u3o8.biz delivers original market analysis, breaking news, and insightful editorial on the economic, political, and environmental issues fueling the reemerging uranium industry. U3O8.biz also provides valuable market and company research, as well as a listing of leading public mining and exploration companies at the forefront of the uranium business.
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