One of the worst hit sectors since July 2007 was uranium. As you all know, I believe that uranium has a big future as a clean energy. It is the cheapest and most efficient energy source in the world. Despite the price of uranium falling from $70 to $45 during the last six months, uranium stocks are showing significant returns and look to have bottomed.
Uranium stocks back in fashion
Global investor portfolio flows show an especial appetite for uranium names, from established producers like ERA, to stocks which had all but wiped out, like Xemplar. Tables included.
Barry Sergeant
03 November 2008 15:05
Listed uranium stocks may have surrendered some $31bn in market value since the price of uranium oxide - "yellow cake" peaked out in June 2007, but very recent investor portfolio flows indicate a resurgent interest in the sector. Not only have prices for uranium oxide fallen continuously from $136/lb in June 2007, to current levels around $45/lb, but like all listed stocks, and in particular mining stocks, uranium names have been singled out for special punishment.
Analysis of listed uranium names indicates that enthusiasm for the sector is back. Stock prices for uranium developers, or juniors, are now on average 51% above low points, and for listed producers of uranium oxide, 46% higher than recorded lows.
In value terms, the aggregate gains amount to $4bn in market value, driven by heavily capitalised stocks such as Cameco the world's leading producer, ERA the listed uranium producer inside the Rio Tinto stable, now 63% above its low stock price, and Uranium One, which has risen recently on news that it has placed its cash burning Dominion mine in South Africa on care-and-maintenance.
Investors appear unperturbed by further recent confirmation that BHP Billiton, owner and operator of Olympic Dam, by far the world's biggest uranium deposit, is to expand the Australian mine, which also ranks as the fourth largest copper deposit in the world, and the world's fourth largest gold deposit. Beyond Olympic Dam, the majority of the world's biggest uranium oxide deposits are either expanding or yet to come into production.
| World's biggest uranium deposits | | |
| Olympic Dam | BHP Billiton | Expanding |
| Elkonsky Gorsk | Rosnedra | Production 2010 |
| Imouraren | Areva | Production 2011 |
| McArthur River | Cameco | In production |
| Inkai | Cameco | Production 2010 |
| Viken | CPM | Developing |
| Cigar Lake | Cameco | In production |
| Streltsovskoye | TVEL | In production |
| Jabiluka | ERA | May produce |
| Mynkuduk | KazAtomProm | Expanding |
Investors have recently shown a stronger appetite for uranium developers, explorers and juniors, as seen in the cases of Alliance Resources, Bannerman, Forsys(set to produce), Extract Resources, UR-Energy, Hathor Exploration, Kalahari Minerals, and even stocks that had all but declined by 100% in market value, such as Xempler Energy.
| Selected uranium stocks | | | | ||
| Producers | Stock | From | From | Value | |
| | price | high* | low* | USD bn | |
| Cameco | CAD 19.73 | -57.6% | 37.7% | 5.667 | |
| ERA | AUD 15.25 | -38.9% | 63.1% | 1.975 | |
| Paladin | AUD 2.60 | -72.2% | 59.5% | 1.084 | |
| Uranium One | CAD 1.02 | -90.5% | 70.0% | 0.398 | |
| Denison | CAD 1.53 | -88.0% | 28.6% | 0.242 | |
| Producer averages/total | | -69.4% | 51.8% | 9.367 | |
| Weighted averages | | -64.9% | 45.7% | | |
| | | | | | |
| Developers & other | | | | | |
| First Uranium | CAD 1.40 | -88.3% | 37.3% | 0.153 | |
| UEX | CAD 0.80 | -91.4% | 50.9% | 0.122 | |
| Uranium Part. | CAD 6.21 | -54.2% | 38.0% | 0.374 | |
| Summit Resources | AUD 1.85 | -47.7% | 23.3% | 0.264 | |
| Mega Uranium | CAD 0.85 | -85.1% | 25.0% | 0.133 | |
| Alliance Resources | AUD 0.64 | -67.1% | 124.6% | 0.119 | |
| Bannerman | AUD 0.36 | -91.4% | 57.8% | 0.036 | |
| Forsys | CAD 5.26 | -15.0% | 163.0% | 0.338 | |
| Aurora Energy | CAD 1.30 | -92.3% | 56.6% | 0.079 | |
| Laramide | CAD 1.22 | -86.2% | 60.5% | 0.064 | |
| Mantra Resources | AUD 0.70 | -82.5% | 16.7% | 0.038 | |
| Energy Metals | AUD 0.38 | -75.5% | 0.0% | 0.030 | |
| Deep Yellow | AUD 0.15 | -69.8% | 38.1% | 0.110 | |
| Extract Resources | AUD 0.99 | -33.4% | 79.1% | 0.142 | |
| Strateco Resources | CAD 0.58 | -83.2% | 45.0% | 0.056 | |
| Strathmore Minerals | CAD 0.29 | -92.2% | 81.3% | 0.018 | |
| UR-Energy | CAD 0.64 | -85.2% | 88.2% | 0.050 | |
| Thor Mining | AUD 0.03 | -89.1% | 20.0% | 0.003 | |
| Uranium Resources | USD 0.94 | -93.7% | 36.2% | 0.052 | |
| Uranerz | CAD 0.75 | -83.0% | 0.0% | 0.035 | |
| Hathor Exploration | CAD 1.80 | -59.1% | 295.6% | 0.123 | |
| Mineral Securities | GBP 0.29 | -61.1% | 1.8% | 0.077 | |
| Marathon Resources | AUD 0.44 | -86.1% | 112.2% | 0.018 | |
| Nufcor Uranium | GBP 0.92 | -76.2% | 22.7% | 0.062 | |
| Kalahari Minerals | GBP 0.38 | -19.4% | 78.6% | 0.102 | |
| Pan African | GBP 0.03 | -71.8% | 0.0% | 0.049 | |
| Uranium Energy | USD 0.46 | -90.5% | 4.5% | 0.021 | |
| West Aust. Metals | AUD 0.08 | -81.8% | 56.9% | 0.018 | |
| Tournigan | CAD 0.19 | -92.8% | 31.0% | 0.019 | |
| Scimitar Resources | AUD 0.13 | -84.2% | 13.6% | 0.004 | |
| Vital Metals | AUD 0.09 | -91.1% | 13.3% | 0.006 | |
| Southern Uranium | AUD 0.04 | -86.8% | 19.4% | 0.003 | |
| Uranium Equities | AUD 0.08 | -75.0% | 7.1% | 0.010 | |
| Black Range Minerals | AUD 0.02 | -89.1% | 28.6% | 0.007 | |
| Berkeley Resources | GBP 0.10 | -86.8% | 5.3% | 0.017 | |
| Xemplar Energy | CAD 0.26 | -96.9% | 116.7% | 0.026 | |
| JNR Resources | CAD 0.34 | -90.3% | 119.4% | 0.023 | |
| Crosshair Exploration | CAD 0.13 | -95.5% | 30.0% | 0.010 | |
| A-CAP Resources | AUD 0.15 | -84.5% | 15.4% | 0.011 | |
| Fission Energy | CAD 0.15 | -90.9% | 76.5% | 0.005 | |
| Curnamona Energy | AUD 0.19 | -84.8% | 22.6% | 0.009 | |
| Coronation Minerals | CAD 0.04 | -90.9% | 33.3% | 0.003 | |
| Khan Resources | CAD 0.24 | -92.5% | 30.6% | 0.011 | |
| Bayswater Uranium | CAD 0.08 | -93.8% | 14.3% | 0.010 | |
| Energy Fuels | CAD 0.22 | -91.1% | 33.3% | 0.012 | |
| Azimut Exploration | CAD 0.44 | -91.5% | 17.6% | 0.006 | |
| Desert Energy | AUD 0.11 | -73.1% | 75.0% | 0.006 | |
| Pancontinental Uranium | CAD 0.12 | -89.9% | 50.0% | 0.005 | |
| Pepinnini Minerals | AUD 0.28 | -79.3% | 40.0% | 0.013 | |
| Nuinsco Resources | CAD 0.08 | -77.8% | 77.8% | 0.012 | |
| West Prospector | CAD 0.16 | -92.7% | 39.1% | 0.007 | |
| Pitchstone Exploration | CAD 0.20 | -93.9% | 39.3% | 0.005 | |
| Canalaska Uranium | CAD 0.08 | -86.7% | 33.3% | 0.009 | |
| Uranium Power | CAD 0.12 | -85.4% | 15.0% | 0.009 | |
| Bitterroot Resources | CAD 0.13 | -88.0% | 30.0% | 0.006 | |
| Encounter Resources | AUD 0.10 | -81.0% | 38.6% | 0.005 | |
| Calypso Uranium | CAD 0.06 | -92.2% | 71.4% | 0.003 | |
| Magnum Uranium | CAD 0.15 | -84.5% | 25.0% | 0.004 | |
| Atomic Resources | AUD 0.10 | -67.7% | 25.0% | 0.004 | |
| Titan Uranium | CAD 0.17 | -88.5% | 41.7% | 0.007 | |
| Uranex | AUD 0.14 | -90.1% | 27.3% | 0.008 | |
| Red Hill Energy | CAD 0.25 | -79.5% | 8.7% | 0.010 | |
| Pele Mountain | CAD 0.14 | -78.1% | 133.3% | 0.010 | |
| Crossland Uranium | AUD 0.08 | -71.4% | 23.1% | 0.006 | |
| Monaro Mining | AUD 0.13 | -87.9% | 30.0% | 0.008 | |
| Epsilon Energy | AUD 0.09 | -89.7% | 12.5% | 0.003 | |
| Eromanga Uranium | AUD 0.05 | -82.0% | 60.7% | 0.004 | |
| African Energy | AUD 0.02 | -95.9% | 0.0% | 0.002 | |
| Fusion Resources | AUD 0.30 | -77.3% | 42.9% | 0.010 | |
| NWT Uranium | CAD 0.03 | -96.4% | 50.0% | 0.003 | |
| Cash Minerals | CAD 0.04 | -95.1% | 16.7% | 0.003 | |
| Apollo Minerals | AUD 0.24 | -55.7% | 46.9% | 0.015 | |
| Forum Uranium | CAD 0.06 | -90.3% | 100.0% | 0.004 | |
| Wealth Minerals | CAD 0.29 | -91.3% | 72.7% | 0.006 | |
| Santoy Resources | CAD 0.09 | -89.2% | 70.0% | 0.007 | |
| Uracan Resources | CAD 0.20 | -79.6% | 48.1% | 0.011 | |
| Niger Uranium | GBP 0.08 | -80.5% | 0.0% | 0.014 | |
| Unor | CAD 0.05 | -84.6% | 100.0% | 0.006 | |
| Purepoint Uranium | CAD 0.05 | -91.9% | 25.0% | 0.003 | |
| Nortec Ventures | CAD 0.12 | -67.1% | 35.3% | 0.007 | |
| Int'l Enexco | CAD 0.23 | -92.8% | 15.0% | 0.004 | |
| U3O8 Corp. | CAD 0.30 | -84.2% | 76.5% | 0.006 | |
| Silver Spruce | CAD 0.11 | -90.1% | 37.5% | 0.004 | |
| Triex Minerals | CAD 0.28 | -92.8% | 66.7% | 0.005 | |
| Rum Jungle Uranium | AUD 0.08 | -72.4% | 4.1% | 0.006 | |
| Solex Resources | CAD 0.09 | -85.1% | 70.0% | 0.004 | |
| Uravan Minerals | CAD 0.24 | -73.3% | 118.2% | 0.005 | |
| Universal Uranium | CAD 0.05 | -92.9% | 42.9% | 0.002 | |
| Oklo Uranium | AUD 0.04 | -83.7% | 0.0% | 0.002 | |
| Hawk Uranium | CAD 0.04 | -92.2% | 40.0% | 0.002 | |
| Macusani Yellowcake | CAD 0.20 | -82.9% | 100.0% | 0.004 | |
| Great Australian | AUD 0.04 | -90.3% | 0.0% | 0.003 | |
| Contact Uranium | AUD 0.05 | -91.7% | 25.0% | 0.004 | |
| Blue Sky Uranium | CAD 0.05 | -92.1% | 42.9% | 0.001 | |
| Aura Energy | AUD 0.25 | -51.9% | 127.3% | 0.007 | |
| Empire Resources | AUD 0.05 | -80.8% | 25.0% | 0.002 | |
| Northern Continental | CAD 0.12 | -72.1% | 71.4% | 0.005 | |
| Int'l Montoro | CAD 0.08 | -81.3% | 114.3% | 0.001 | |
| North Atlantic Resources | CAD 0.09 | -85.8% | 6.3% | 0.002 | |
| Uranium City | CAD 0.02 | -95.5% | 0.0% | 0.001 | |
| Developer averages/total | | -82.0% | 47.3% | 3.184 | |
| Weighted averages | | -81.1% | 50.8% | | |
| Overall averages/total | | -80.6% | 47.1% | 12.551 | |
| Overall weighted averages | | -71.2% | 46.9% | | |
| | | | | | |
| Diversifieds with uranium | | | | ||
| Areva | EUR 399.99 | -51.2% | 19.9% | 18.153 | |
| Rio Tinto | GBP 28.70 | -60.0% | 46.6% | 67.444 | |
| BHP Billiton | GBP 10.56 | -52.1% | 39.6% | 106.110 | |
| AngloGold Ashanti | USD 18.25 | -62.8% | 31.1% | 6.400 | |
| Equinox | CAD 1.07 | -84.7% | 40.8% | 0.529 | |
| * 12-month | | | | | |
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