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Bayswater, Crosshair, Ur-Energy, Laramide jump as much as 25% Today

May 27, 2011 11:06 PM ET
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By Bob Kirtley

28 May 2011

Uraniun Stocks Table 28 May 2011.JPG

Uranium stocks have been taking it on the chin since the disaster in Japan hit the Fukushima nuclear plant and sent the world into a spin. However, today we were given some light relief when the uranium stocks took off and headed for higher ground. Among the standouts were:

Bayswater Uranium Corporation (BYU) Up 25.64%
Crosshair Exploration and Mining Corporation (CXX) Up 18.18%
Ur-Energy Incorporated (URE) Up 19.05%
Laramide Resources Limited (LAM) Up 12.10%.

Its difficult to find a reason for today’s jump in prices other the price of uranium appears to have stabilized and could now be in recovery mode having been battered over the last two months. However, scanning the air waves we found this snipet on Industrial Fuels and Power:

In the week ended 20 May, seven transactions were concluded as the uranium price retreated after an increase noted in the week on the back of persistent rumours that Fluor-B&W reached an agreement with a buyer for the purchase of up to 450tU as UF6 per quarter for the next 10 quarters. But the sale was not confirmed later in the week and interest waned as prices rose. By the end of the week, the spot price was reported at US$56.00/lb, according to TradeTech reports. After the weekend, The Ux Consulting Company reported a WoW fall of US$0.25 in its uranium price indicator to US$57.50/lb.

Uranium Chart 28 May 2011.JPG

While the Fukushima disaster has had no doubt a negative effect on the uranium prices, experts indicate that the market will recover. Many key nuclear power capacity nations, such as China, Russia and India, are still continuing to build new reactors, which will push up the demand for the fuel. The Commerzbank estimates that uranium will climb to US$69/lb this year and continue its upward trend to US$80 the following year. Deutsche Bank puts the price at US$65/lb t his year with US$5/lb annual rises over the next few years.

It looks to us as though the Commerzbank has influenced investors thinking at this point.

Over on the miningweekly.com The uranium spot price could reach $80/lb by the end of the year, beating levels before the Japanese nuclear disaster, NYSE-listed Uranium Energy Corp (UEC) CEO Amir Adnani told Mining Weekly Online on Friday.

You may see $80/lb late this year or early next year, I think it’s within the next year at the most,” he said.

A few smiles would return to the bedraggled faces of this sectors investors if uranium did indeed return to $80/lb.

Our opinion, for what it is worth, is that there is still no alternative to nuclear energy and once the politicians stop pontificating and posturing the nuclear programmes will be implemented unabated. With that in mind it well be a good time to buy this dip in the full knowledge that it will be a white knuckle ride.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.


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