TORONTO (miningweekly.com) - The 30% rise in uranium prices since June to the highest level in two years has sparked interest in the sector once more, and TSX-V-listed junior Xemplar Energy said on Monday its phone lines had suddenly become a lot busier.
"There's just interest coming from everywhere. Our phones ring a lot more than they used to," COO Mike Magrum said in an interview.
Xemplar has been basking in sharply higher uranium prices - which consultancy Tradetech reported as $59,25/lb on November 12 - with the value of its own stock having doubled since mid-September (sitting at just under C
,20 on Tuesday morning).
Other uranium firms have enjoyed similar rises. TSX-listed Mega Uranium shot up by nearly 50% since September to trade at C
,77 a share on Tuesday morning.
Vancouver-based Uranium One has surged from around C$3,20 a share in mid-September to $4,61 a share.
The uranium price increase has caused Xemplar to dust off its Namibian properties, after saying in May the depressed market for the nuclear fuel had caused it to "actively pursue" opportunities outside uranium.
The company had said it was actively seeking partners for its Warmbad property, but Magrum said the company's focus had now shifted to the Cape Cross prospect.
Warmbad was a lower-grade deposit in the south Namibia, while Cape Cross was situated in the so-called Uranium Corridor, which hosts Rio Tinto's Rossing mine, as well as Areva's Trekkopje.
"What we are finding at Cape Cross justifies moving forward aggressively," said Magrum.
The project is adjacent to ASX-listed minnow Metals Australia's Mile 72 prospect.
Magrum said it was still too early a stage to say when Xemplar would complete a scoping study or prefeasibility at Cape Cross.
URANIUM PRICES
He went on to say he expected further increases in the uranium price.
US consultancy TradeTech reported last week that the recent high prices were attracting increasing interest from investors and speculators, with hedge funds venturing back into the market.
"While the level of spot market demand is primarily discretionary, it is exceptionally high, with buyers including utilities, traders, and producers," said TradeTech president Treva Klingbiel.
Magrum pointed to the recent long-term supply contract the world's largest nuclear fuel miner, Areva, concluded with Chinese utilities. The price worked out to $79/lb.
"I think that's where the spot price will move up to, I just can't tell you exactly when," he said.
On Monday, Vancouver-based Uranium One CEO Jean Nortier said Chinese demand would continue to drive prices higher.
Australia-based Paladin, which owns the Langer Heinrich mine in Namibia, expressed similar sentiments, with CEO John Borshoff saying China was "nowhere near their target of acquiring in the vicinity of 45-million to 50-million pounds per annum by 2020".
Investors had largely lost interest in the uranium sector after the price collapsed from its $137/lb 2007 highs, but Magrum said things had improved significantly.
"Uranium is one of the hotter commodities right now, maybe even better than gold."