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 May 23, 2013
Uranium Prices Slip, Market Optimism Holds Steady
    Publisher: U3O8.biz
    Author: Vivian Diniz

 

Uranium spot prices were down slightly last week, dropping $0.20, to $40.50 per pound U3O8, with only three trades recorded. The uranium price could potentially be stuck between $40 and $41 per pound for the next few weeks as buyers seem to be quite few and far between for the number of sellers, according to uranium price publisher UxC. The firm also reported that the uranium market "can be characterized as rather quiet with a forward price curve that is about as flat as a pancake."

Though prices have been depressed since the 2011 Fukushima disaster, they aren't expected to remain down in the long term. TradeTech noted that while spot market activity is on the lighter side, the uranium market is far from quiet.

The price publisher commented that optimism is evident in the market, with producers and sellers reluctant to offer lower prices despite the summer season, which usually spells a slowdown for spot market activity.

Japan nuclear reactors raises concerns

Concerns about the safety of one of Japan's nuclear reactors were brought to light on Wednesday. The country's nuclear regulator accepted an expert panel's report that a fault line runs directly under one of the idled reactors in Western Japan, making the decision to bring the plant online more complicated.

The fault under the Tsuruga No. 2 reactor could possibly trigger an earthquake, leading to another accident, according to the Associated Press. Since announcing its return to nuclear energy, Japan's nuclear regulations have become tighter, and this is "first time Japanese regulators had officially recognized an active fault underneath an existing reactor, virtually acknowledging that the risk at Tsuruga had been overlooked for decades by both the operator and regulators despite warnings by some experts."

Following April's announcement from the Liberal Democratic Party, the intention is for some of Japan's nuclear reactors to come online as early as the fall. However, the final decision will be made by regulatory bodies.

Company news

Tigris Uranium (TSXV:WFP) has completed a reverse takeover and will change its name to Wolfpack Gold. The transaction, through which Tigris acquired all of the issued and outstanding shares of Wolfpack via a three-cornered amalgamation, gives the combined company a well-rounded portfolio of gold properties located in Nevada. Wolfpack will continue to advance the Crownpoint and Hosta Butte uranium assets in New Mexico.

Alpha Minerals (TSXV:AMW) and joint venture partner Fission Uranium (TSXV:FCU) will be spending $6.95 million on a summer and fall drill program of at the Patterson Lake South Property in the Athabasca Basin.

The summer program will be focused on delineating the three uranium zones discovered at Patterson Lake South. The company will also look at sampling for the purpose of metallurgical testing as well as working on establishing an environmental baseline study for reporting purposes.

NexGen Energy (TSXV:NXE) is currently working on ground logistics preparations for a 4,400-meter diamond drill program at the Radio deposit, located in the Athabasca Basin directly adjacent to Rio Tinto's (NYSE:RIO,ASX:RIO,LSE:RIO) Roughrider deposit.

The company has also completed a ground gravity survey over the iced lakes section of the Rook 1 claim, which is located nearby the Patterson Lake South project owned by Fission Uranium and Alpha Minerals.

Strateco Resources (TSX:RSC) was forced to recognize an $87-million impairment charge from Yves-François Blanchet, Quebec's Minister of Sustainable Development, Environment, Wildlife and Parks, not to issue the certificate of authorization for the Matoush uranium project until the uncertainty surrounding Quebec's uranium industry is cleared.

Cameco (TSX:CCO) started production at the North Butte in-situ uranium mine in Wyoming on May 13. The project is a satellite facility to Cameco's Smith Ranch-Highland in Converse County, Wyoming. The mine is expected to add 300,000 pounds of uranium in 2013 with the potential to climb to 700,000 pounds per year by 2015

Production from North Butte would add about US$2 million in annual taxes paid to the state and local governments.

Commenting on the start up was Cameco President Paul Goranson, who sees the project as "a significant milestone for our continued growth of US operations." Goranson went on to show his appreciation for his team in getting the project up and running.

"We thank our employees, suppliers, contractors and others for the excellent job they've done with exploration, development, construction and final testing of process equipment to get us here."

 

Securities Disclosure: I, Vivien Diniz, hold no investment interest in any of the companies mentioned.

Related reading:

Fission Uranium: High-grade Uranium in the Athabasca Basin

 
 

You can view the Previous Market Commentary item: Sun May 26, 2013, Energy Fuels Acquires Strathmore Minerals for C$29.1 Million

You can view the Next Market Commentary item: Tue May 21, 2013, Fission Uranium: High Grade Uranium in Athabasca Basin

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