FACTS ‘N’ FIGURES
The spot price for uranium will reach US$54 per lb. in 2006 and US$58 per lb. by June 2007, according to a report by Sydney, Australia-based Resource Capital Research (RCR).
The current spot price for uranium hovers around US$40 per lb. — an increase of 13% from the beginning of 2006. If the spot price were to rise to US$58 per lb., that would represent an increase of 45%.
The uranium price levels are up from the firm’s December predictions, which forecasted prices of US$40 per lb. in 2006 and US$50 per lb. by June 2007. Long-term forecasts are generally in the range of US$30 per lb.
The report says a number of juniors are advancing projects. Australia’s Equinox Resources will produce byproduct uranium from its copper project in Zambia by 2008. Berkeley Resources recently signed an agreement with Paris-based heavyweight Areva to advance the junior’s uranium interests in Spain. OmegaCorp is advancing its Kariba project in Zambia; and Nova Energy its Lake Way/Centipede project in Western Australia. Colorado-based Ur-Energy, meanwhile, announced upgrades to target mineralization at its prospective in situ-leaching properties in Wyoming.
PepinNini Minerals completed a scoping study at Crocker Well in South Australia, and Summit Resources is expected to further expand resources this year at its Mount Isa project in northwestern Queensland, Australia.
For their part, Canadian companies continue to expand in Australia. Mega Uranium acquired Hindmarsh Resources, and Laramide Resources is taking a significant ownership stake in Bullion Minerals.
In a related note, an agreement that clears the way for uranium sales to China has been signed this month by representatives from Australia and China. Security of uranium supply is vital to China’s expanding nuclear power industry and the RCR report says the Chinese government will likely invest in several juniors now that the agreement with Australia is final. Companies with Joint Ore Reserves Committee/National Instrument 43-101 resources will be of particular interest to Chinese power utilities.
RCR was founded in 2004 and provides investors with research on investment opportunities in the mining sector.
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