Four months have passed since the disaster at Japan’s Fukushimanuclear plant, and there is no question that the uranium sector isstarting to emerge from its slump.
David Talbot, an analyst at Dundee Capital Markets, wrote that thelast three weeks in particular have provided some positive indicatorsfor the market.
“Uranium prices have stabilized and the stocks are actually trendingupwards — up about 11% across the board,” he wrote in a note.
Among the positive news is a takeover proposal for Bannerman Resources Ltd.,announcements of new nuclear builds in the United Kingdom and SaudiArabia, and new words of support for nuclear power from Russia, Chinaand India. Mr. Talbot noted that there are 61 reactors underconstruction around the world right now, a “broad build” by any measure.
By 2020, he expects uranium demand to reach 240 to 280 million pounds, with only about 200 million pounds of production.
When it comes to the stocks, Mr. Talbot expects the juniordevelopment plays to outperform the producers in the short term as theyregain value. His picks include Hathor Exploration Ltd., Rockgate Capital Corp., UEX Corp., and Ur-Energy Inc.