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As the uranium spot price skyrocketed from $95/lb to $113/lb this week amidst increasing demand in the face of new supply concerns, even analysts who have been bullish on the metal have seen their target prices surpassed, and by a wide margin. For example, Patricia Mohr, who oversees Canadian bank CIBC’s Commodity Price Index, has had to revise her estimate upwards already this year; her most recent prediction of Yellowcake that “appears headed to $100 at the end of 2007” is already $13 lower and 8 months later. No, the era of uranium is far from over, it seems.

Indeed, signs of increased investor attention to uranium has filtered into the United States. Coinciding with the upward price movement in uranium was a new 52-week high for uranium supplier USEC Inc. (USU). USEC operates the only uranium enrichment facility in the United States; it also is in charge of recycling uranium taken from old Russian nuclear warheads and converting it into useable fuel. As one can see from the chart, USU has had a nice run, rewarding investors with nearly a double over the last six months and appreciating to a $1.6billion US market cap.

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As impressive as USU’s return has been, there are comparable uranium stocks with a primary listing in Canada on the Toronto Stock Exchange [TSX] that also trade on the Pink Sheets. Emerging uranium producers Paladin Resources (OTCPK:PALAF) ($4.9 billion Cdn), Denison Mines (OTC:DMLCF) ($2.9 billion Cdn), and soon-to-be-merged sxr Uranium One (SXRFF.PK) ($2.5 billion Cdn) and Urasia Energy ($3.8 billion Cdn) all have 1-year returns that exceeds that of USEC: Denison itself has returned ~250% during this span:

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As unhedged uranium producers who have had relatively short corporate histories and were not forced to sign long-term contracts when the uranium market was depressed, they are able to fully leverage the increasing uranium spot price. Increased costs of production certainly remain a concern, something all mining outfits would agree upon, but investors are betting that these emerging uranium powerhouses have managed to find the perfect confluence of emerging production profiles in the background of an ever-increasing prices.

Disclosure: none

Source: Unhedged Uranium Producers Take Advantage of Increasing Prices